1Q’17 Global Electronic Supply Chain Growth update

1Q’17 company financial reports are still being released and this will continue through early June. Results to date are:

  • 1Q’17 sales of electronic equipment rose an estimated 3.4% compared to 1Q’16 (Chart 1).
  • Sales growth by sector of the global electronic supply chain is given in Chart 2.

 

These estimates are based on a combination of actual and estimated 1Q’17 results. Some very large OEMs that closed their financial quarter in late April have not yet reported. These firms with their release dates include:

  • Cisco Systems   5/17
  • Applied Materials   5/18
  • HP Enterprise   5/23
  • HP Inc   5/24
  • Medtronic   5/25
  • Lenovo    5/25
  • Dell Technologies   6/08

 

Source: Company financial results with Custer Consulting Group analysis

Taiwan/China Update

April monthly sales of Taiwan listed companies were just released. Many of these companies manufacture in China.

  • Electronic equipment (OEM) sales in April 2017 were up 3.8% compared to April 2016 but down sequentially 11.3% compared to March 2017 (Chart 3).
  • ODM April 2017 revenues were up 8.3% versus April 2016 but down 8.5% sequentially from March 2016 (Chart 4).
  • Foundry sales plunged reportedly due to high customer inventory levels (Chart 5). This suggests that monthly global semiconductor shipments will soon decline.
  • Package and Test revenues also declined – but much less than foundry sales (Chart 6).
  • Memory sales held steady from March (Chart 7).
  • Display sales declined (Chart 8).
  • Passive component revenues dipped slightly (Chart 9).
  • Both printed circuit and CCL laminate sales dropped sharply (Chart 10). The PMI leading indicator suggests slower PCB growth is ahead (Chart 11).

 

Source: Company financial results with Custer Consulting Group analysis

Europe Update

Eurostat just released its European production results for March

  • Chart 12 summarizes the production growth of European electronic supply chain in 1Q’17 versus 1Q’16.
  • March Eurozone-28 industrial production rose but results varied by country (Chart 13).
  • European electronic equipment production declined in March (Chart 14) but it is growing on a 3/12 basis versus 1Q’ 16 (Chart 15).
  • Motor vehicle (Chart 16) and aerospace (Chart 17) production increased.
  • Instruments and appliances for measuring, testing and navigation (Chart 18) and irradiation, electromedical and electrotherapeutic (Chart 19) equipment revenues are increasing.
  • Semiconductor shipments to Europe are outgrowing local electronic equipment production on a 3/12 growth basis suggesting that a downward semiconductor shipment adjustment is likely (Chart 20).
  • Electronic board assembly has been declining since December (Chart 21).
  • Printed circuit board production declined in early 2017 but rebounded in March (Chart 23). The European PMI leading indicator points to accelerating PCB growth ahead (Chart 24).

 

Source: Eurostat

North American Robotics 1Q’17 orders increased 32% y/y to a record total of 9,773 robots valued at $516 million (Chart 24).

 

  • Shipments grew 24% y/y to 8,824 robots valued at $494 million
  • Strongest first quarter on record with $516 million in orders

 

North American robotics companies posted the strongest ever first quarter results, according to the Robotic Industries Association (RIA), the industry's trade group. Both robot orders and shipments achieved record levels

An all-time high total of 9,773 robots valued at approximately $516 million were ordered from North American robotics companies during the first quarter of 2017. This represents growth of 32% in units over the same period in 2016, which held the previous record. Order revenue grew 28% over the first quarter of last year. Robot shipments also reached new heights, with 8,824 robots valued at $494 million shipped to North American customers in the opening quarter of the year. This represents growth of 24% in units and five percent in dollars over the same period in 2016.

"The automation industry continues to grow robustly as companies invest to increase productivity and boost competitiveness while also providing opportunities for workers," said Jeff Burnstein, President of RIA. "We are excited to hear about the new jobs being created and how companies such as Amazon, GM, and others are training and retraining their workforce to enable them to embrace these higher skilled jobs."

Growth in Automotive Soars

Growth in automotive related industries soared in the first quarter of 2017. Robots ordered by automotive component suppliers were up 53% while orders by automotive OEMs increased 32%. Another good sign for the future of robotics was the continued growth in non-automotive industries like metals (54%), semiconductors/electronics (22%), and food and consumer goods (15%).

The biggest increases were in arc welding (102%), coating and dispensing (64%), and spot welding (36%) applications. RIA estimates that 250,000 robots are now in use in the United States, third highest in the world behind Japan and China.

Market Growth Reflected in Automate Attendance

RIA and its parent group, the Association for Advancing Automation (A3), see the impact of the growth in demand for robotics and related automation at industry events such as Automate 2017, recently held in Chicago from April 3-6, 2017. This year's show featured more than 400 exhibitors displaying their latest technologies and services, including global suppliers of robotics, motion control, motors, vision systems, metrology, software and system integration services for enterprises large and small. Over 20,000 people attended Automate 2017, including over 1,000 participants in the 120+Automate conference sessions held at the event.

"All of our statistics increased significantly from the last Automate show in 2015," added Burnstein. "Total number of show attendees jumped 37% and conference participation grew by over 90% compared to 2015. This growth demonstrates that there is an increasing need for an event like Automate that provides practical, real-world solutions for companies currently automating or considering automation."

Collaborative Robots and Advanced Vision Conference Set

RIA and its sister group, AIA - Advancing Vision + Imaging, are teaming up to bring more content on leading-edge robot and machine vision trends in 2017. The Collaborative Robots and Advanced Vision Conference will take place November 15-16 in San Jose, CA, and will feature presentations from market leaders in robotics, vision, and imaging. More information will be available in the coming weeks on the RIA (www.robotics.org) and AIA (www.visiononline.org) websites.

Source: www.robotics.org

Global Wearables Shipments rose 21% y/y to 22 million units in 1Q’17

Apple is top wearables vendor in 1Q’17.

Global wearables shipments reached 22 million units in the first quarter of 2017, rising 21% on year from 18.2 million shipped a year earlier period, according to Strategy Analytics.

Stronger demand for new smartwatch models in North America, Western Europe and Asia drove the uptick, said the market research firm.

Apple shipped 3.5 million wearables worldwide in the first quarter, rising 59% on year. Apple also captured 15.9% global market share and overtook Fitbit to become the world's largest wearables vendor in the quarter.

Xiaomi Technology shipped 3.4 million wearables for a 15.5% share in the first quarter. However, demand for its popular Mi Band fitness range was flat across its core markets of Asia, Strategy Analytics indicated.

Fitbit saw its wearables shipments fell 36% on year to 2.9 million units, or a 13.2% share, in the first quarter due to slowing demand for its fitness bands and a late entry to the emerging smartwatch market.

Source: www.strategyanalytics.com

Source: www.digitimes.com

 

Walt D. Custer


Walt Custer

Walt Custer is an industry analyst focused on the global electronics industry. Prior to forming Custer Consulting Group he was Vice President of Marketing and Sales for Morton Electronic Materials, a global supplier of specialty chemicals and process equipment for the PCB industry.

Custer has been a member of the IPC trade organization since 1975 where he received both the President's and the Raymond E. Pritchard Hall of Fame Awards. He is currently a member of the IPC Executive Market & Technology Steering Committee. Custer is also a Director of the EIPC European PCB trade organization.

He authors regular “Market Outlook” columns for Global SMT & Packaging magazine, the Journal of the HKPCA and the TTI MarketEYE website.

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