U.S. Electronic Supply Chain – Preliminary October Results
The U.S. Durable Goods report for October has just been released.
- The electronic equipment book/bill has risen sharply (Chart 1) as both order and shipment growth has accelerated (Chart 2).
- On a dollar basis domestic electronic equipment orders are at their highest level since 2012 (Chart 3).
- Relative to orders, electronic equipment inventories are at their lowest level since 2011 (Chart 4).
- Defense capital goods orders have declined over the last few months (Chart 5) as their book/bill have dropped to 1.0 (Chart 6).
- Communication equipment orders have strengthened (Chart 7).
- Aircraft shipments have softened (Chart 8) and orders are not rising (Chart 9).
Source: www.census.gov/indicator/www/m3
November “Flash” PMI Leading Indicators
IHS Markit has released November flash PMI indicators for select countries (Chart 10).
- U.S. PMIs (both ISM and Markit), although at high levels, have dipped slightly recently (Chart 11).
- Eurozone’s PMI is at its highest level since 2000 (Chart 12) as both Germany (Chart 13) and France (Chart 14) are at record levels.
- Japan’s PMI rebounded to its highest level since 2014 (Chart 15).
Source: www.markiteconomics.com
3Q’17 Sector Growth – Solar/Photovoltaic Suppliers and Component Distributors
Based on third quarter consolidated financial results:
- A group of 90 publicly traded, global companies serving the solar/photovoltaic supply chain reported a 5.3% increase of 3Q’17/3Q’16 revenues (Chart 16).
- Nine electronic component distributors had a 13.7% sales increase in the third quarter (Chart 17).
Source: Company financial reports
North America-based SEMI Equipment Manufacturers World Billings up 23.7% y/y in October 2017 (Charts 18 & 19)
SEMI reports that the 3-month average of worldwide billings of North American equipment manufacturers in October 2017 was $2.02 billion, 1.8% lower than September 2017 and 23.7% higher than October 2016.
“Equipment billings dipped in October, the fourth consecutive monthly decline during this record spending year," said Ajit Manocha, President and CEO of SEMI. “In spite of this seasonal weakness, we expect equipment spending to increase by 30% or more this year and are positive about growth in 2018."
The SEMI Billings report uses 3-month moving averages of worldwide billings for North American-based semiconductor equipment manufacturers.
Source: www.semi.org
Global Mobile DRAM Average Prices to rise 10-15% sequentially in 4Q’17 (Charts 20-22)
Average prices for mobile DRAM chips are expected to rise 10-15% sequentially in the fourth quarter of 2017, when the industry will enjoy a higher sequential increase in output value than that in the previous quarter, according to DRAMeXchange.
Average mobile DRAM prices rose up to 5% in the third quarter of 2017, when the industry output value grew 4.3% sequentially to US$6.48 billion, said DRAMeXchange.
SK Hynix with a remarkable 30.7% revenue growth outperformed its other mobile DRAM peers in the third quarter, DRAMeXchange indicated. SK Hynix' mobile DRAM revenues surged to US$1.76 billion from US$1.35 billion in the second quarter, while its market share climbed 5.5pp on quarter to 27.2%.
Samsung Electronics remained the world's largest mobile DRAM supplier in the third quarter, but the company saw its mobile DRAM revenues slip 1% on quarter to US$3.78 billion, DRAMeXchange said. Samsung grabbed a 58.3% share of the market during the quarter, down from 61.5% in the second quarter.
Micron Technology saw its mobile DRAM revenues decline 13% sequentially to US$805 million in the third quarter, due mainly to the impact of a temporary shutdown of Fab-2 (N2) owned by subsidiary Micron Technology Taiwan, DRAMeXchange noted. Micron's share of the global mobile DRAM market fell to 12.4% in the quarter from 14.9% in the second quarter.
Taiwan-based Nanya Technology and Winbond Electronics rounded out the global top-5 mobile DRAM suppliers in the third quarter of 2017, with revenues of US$86 million and US$43 million, respectively, according to DRAMeXchange.
Source: www.dramexchange.com
Jin Hua Integrated Circuit Moving Equipment into DRAM Fab; Operation Expected to Begin 3Q’18
China-based Fujian Jin Hua Integrated Circuit, which broke ground for a new DRAM fab in July 2017, has started equipment move-in for the facility, according to a report from Taiwan's TechNews.
Jin Hua is among the chipmakers being supported financially by the China government under the country's 13th Five-Year Plan, and will be engaged in the manufacture of DRAM products using production technology developed by Taiwan's United Microelectronics (UMC).
Jin Hua will receive the first phase of investment totaling US$5.3 billion for the construction of its DRAM fab which will occupy a floor area of 274,000 square meters, according to the report. Jin Hua expects to start operating the fab in the third quarter of 2018.
Jin Hua has UMC's help in developing production technologies, with the first-generation 32nm node to be ready for volume production in the third quarter of 2018, the report said. Monthly production capacity at Jin Hua's DRAM fab is estimated at 60,000 12-inch wafers initially.
UMC disclosed previously it was still engaged in the development of 3Xnm DRAM production technology for Jin Hua under a technology cooperation agreement reached between the two companies in May 2016. According to the agreement, Jin Hua will provide UMC with production equipment for developing DRAM manufacturing technology, as well as service fees to cover R&D expenses, while UMC will be developing DRAM related technologies which will be jointly owned by both Jin Hua and UMC.
UMC indicated the first-generation 3Xnm DRAM production technology will be ready when Jin Hua starts operating its new 12-inch fab by the end of 2018.
The foundry will then move forward developing the second-generation 2Xnm DRAM production technology.
Source: www.digitimes.com
MLCC Supply Tight, especially NPO Models
MLCC (multi-layer ceramic capacitors) supply has been tight, especially NPO models due to increasing demand from the handset-use fast charging and wireless charging segments, which has prompted Taiwan maker Yageo to rise NPO MLCC prices by 20-30%, according to industry sources.
Source: www.digitimes.com
Top 10 Semiconductor Suppliers for 2017 (Charts 23-27)
- Samsung Forecast to top Intel as #1 Semiconductor Supplier in 2017
- Nvidia expected to make its first appearance in the top 10 ranking this year.
IC Insights will release its November Update to the 2017 McClean Report later this month. This Update includes a 2017-2021 semiconductor market update, a forecast for the major capital spenders for 2017 and 2018, an analysis of the DRAM market, and a look at the top 25 semiconductor suppliers expected for 2017. The top 10 2017 semiconductor suppliers are covered in this research bulletin.
For the first time since 1993, the semiconductor industry is expected to witness a new number one supplier. Samsung first charged into the top spot in 2Q’17 and displaced Intel, which had held the number one ranking since 1993. In 1Q’16, Intel’s sales were 40% greater than Samsung’s, but in just over a year’s time, that lead has been erased. Intel is now expected to trail Samsung in the full-year 2017 semiconductor sales ranking by $4.6 billion. Samsung’s big increase in sales this year has been primarily driven by an amazing rise in DRAM and NAND flash average selling prices.
In 1993, Intel was the number one ranked supplier with a 9.2% share of the worldwide semiconductor market. In 2006, Intel still held the number one ranking with an 11.8% share. In 2017, Intel's sales are expected to represent 13.9% of the total semiconductor market, down from 15.6% in 2016. In contrast,
Samsung's global semiconductor market share was 3.8% in 1993, 7.3% in 2006, 12.1% in 2016, and forecast to be 15.0% in 2017. Thus, it appears that Samsung’s accession to the number 1 position in the semiconductor sales ranking this year has had more to do with Samsung gaining market share than Intel losing market share.
For 2017, the top 10 sales leaders are forecast to hold a 58.5% share of the worldwide semiconductor market. If this occurs, this would be the largest share of the market the top 10 companies held since 1993.
Memory giants SK Hynix and Micron are expected to make the biggest moves in the top 10 ranking in 2017 as compared to the 2016 ranking. Spurred by the surge in the DRAM and NAND flash markets, each company is forecast to move up two spots in the top-10 ranking with SK Hynix occupying the third position and Micron moving up to fourth.
Excluding foundries, there is expected to be one new entrant into the top-10 ranking in 2017—U.S.-headquartered Nvidia, which is forecast to register a 44% increase in sales this year. Nvidia is expected to replace fabless supplier MediaTek, whose 2017/2016 sales are expected to be down by 11% to $7.9 billion.
Six of the top 10 companies are expected to have sales of at least $17.0 billion in 2017. As shown, it is forecast to take $9.2 billion in sales just to make it into this year’s top 10 semiconductor supplier list. It should be noted that if Qualcomm and NXP’s expected sales for this year were combined, as if Qualcomm’s pending acquisition had already occurred, the companies’ 2017 sales would be $26.3 billion, enough to place the combined entity into third place in the top 10 ranking. Moreover, Broadcom’s current attempt to acquire Qualcomm, while Qualcomm itself is in the process of attempting to acquire NXP, adds additional uncertainty with regard to the future top 10 ranking.
As would be expected, given the possible acquisitions and mergers that could/will occur over the next couple of years (e.g., Qualcomm/NXP, Broadcom/Qualcomm/NXP, etc.), as well as any new ones that may develop, the top 10 semiconductor ranking is likely to undergo some significant changes over the next few years as the semiconductor industry continues along its path to maturity.
Source: www.ICInsights.com
Global NAND Flash Revenue from Branded Manufacturers Increased 14.3% Sequentially in 3Q’17 due to Growing Demand for Smartphones and Servers (Charts 28 & 29)
DRAMeXchange, a division of TrendForce, reports a growing demand for NAND Flash under the influence of traditional peak season and increasing demand for smartphones and SSD from servers and data centers. The gap between supply and demand is larger compared with the previous quarter. However, the contract price of all product lines increased no more than 0-6% in this third quarter after a long period of continuous price increase, and the current price is approaching the highest level that OEM factories can afford.
As for Q4, the market demand is expected to increase slower except for smartphones’ surging demand. In addition, the price is expected to remain the same or have only slight rise since 64/72-layer 3D-NAND devices have been put into mass production and applied to SSD product lines, gradually driving the market towards a balance between supply and demand. NAND flash manufacturers are expected to maintain their high revenue in the fourth quarter as the prices are still high. But the market is expected to turn to oversupply in 2018, as the 64/72-layer 3D-NAND development matures and brings an off-season in the first half of the year.
Source: www.dramexchange.com
Worldwide Tablet Shipments expected to decline 10% y/y to 128 million units in 2018
Seeing all-screen smartphones continue eroding tablet demand, tablet vendors, to differentiate the two product lines, are turning aggressively to promote 10-inch and above models with consumer-friendly prices, hoping to trigger a replacement trend. Digitimes Research expects worldwide tablet shipments to reach 128 million units in 2018 with on-year decline shrinking to around 10%.
Digitimes Research expects all-screen smartphone's impact on tablet demand to weaken after 2019 and worldwide tablet shipments will remain at above 120 million units each year with a CAGR of negative 1.4% from 2018-2022.
Apple, Samsung Electronics and Amazon will be the top-3 tablet vendors worldwide in 2017, while Huawei will move to fourth place, surpassing Lenovo thanks to a strategy to push product differentiation. The gap between Huawei and Lenovo gap is expected to further extend in 2018.
With some vendors already adopting over 6-inch displays for their all-screen smartphones, shipments of 7.x- to 8.x-inch tablets will see increasing competition. To minimize the impact, Digitimes Research believes, tablet brands will turn to focus on promoting their 9-inch and above models, causing worldwide shipments of 9-inch and above tablets to account for over 60% of worldwide volumes in 2018.
Although China-based makers together have seen increased share of worldwide 8-inch tablet shipments, their rapidly dropping 7-inch orders will benefit Taiwan's share of worldwide shipments, boosting the percentage to above 50% in 2018 as most large-size tablets will be delivered by Taiwan makers.
Source: www.digitimes.com
Global Gaming Notebook Shipments expected to grow from 4.5 million units in 2016 to 5.5 million in 2017
- Asustek and Micro-Star International (MSI) standing firmly as the top-2 vendors
- Competition heating up in Asia Pacific gaming notebook market
Based on global shipments of Nvidia GeForce GTX series, about 5.5 million gaming notebooks will be shipped globally in 2017, up from 4.5 million units in 2016, with Asustek and Micro-Star International (MSI) standing firmly as the top-2 vendors. But they are facing increasingly fierce competition from other players, particularly in the Asia Pacific market, according to industry sources.
The sources said the Singapore-based Razer, a supplier of gaming peripherals such as mice, earphones and keyboards, is emerging as a new star in the gaming market and is likely to become the largest competitor for Asustek and MSI, as it is aggressively foraying into the market for gaming notebooks and gaming handsets after obtaining investment from Hong Kong business tycoon Li Ka-shing and listing on the HK bourse.
As gamers in Europe and the US show high regard for the design, quality and performance of gaming notebooks, Asustek and MSI can meet their requirements in these aspects with medium to high-end models, making their leading positions in the two markets become unshakable. This has prompted rival brands such as HP and Dell to tap the Asia-Pacific market with entry-level gaming models, the sources continued.
In addition, Lenovo, now the leading brand in the China gaming notebook market, and Acer are also actively promoting entry-level gaming notebooks in Taiwan, China, South Korea and Southeast Asian countries such as Thailand, Indonesia and Malaysia, seeking to cash in on the booming season in the fourth quarter of the year.
Supply chain sources said the Southeast Asia market demand for gaming notebooks is estimated at over one million units in 2017, and is showing higher growth momentum than other areas due to the rapid increase in gaming population. As the top-2 brands in the Southeast Asian market, Asustek and MSI are forced to adjust their pricing strategies and enhance marketing campaigns to counter fierce price-cutting practices by rival players.
Source: www.digitimes.com
Global Smartphone Shipments will grow 5% y/y in 2017 and another 4.8% in 2018
Global smartphone shipments are expected to grow 5% on year to reach 1.43 billion units in 2017 and expand another 4.8% to over 1.5 billion units in 2018, according to Digitimes Research.
Replacement demand for smartphones from feature phone users in emerging markets in Southeast Asia, South America and Africa will be the main source of sales growth for smartphones from 2018-2022 with shipments to grow at a rate of 60-70 million units a year during the projected period.
With the exception of Apple and HMD Global (Nokia), the rest of the world's top-20 handset brands in 2017 will come from Asia, including 11 from China and two each from Korea, India and Taiwan. China-based Huawei, Oppo and Vivo will take the third, fourth and fifth positions in the global vendors ranking in 2017.
Source: www.digitimes.com
