China/Taiwan Update

July sales were just reported for Taiwan-listed electronics companies, many of which manufacture in China.

  • OEM sales in July 2018 were up 13.2% compared to July 2017 but had no change sequentially compared to June 2018 (Chart 1). The late summer/autumn “busy season” is under way.
  • Chart 2 compares monthly sales of a group of Taiwan-listed wafer foundries to Taiwan Semiconductor Manufacturing Company.  It would appear that the well-publicized virus that recently infected some of TSMC’s equipment had little effect on its July sales.
  • Taiwan foundry composite and global PMI still predict a slowdown in world semiconductor shipments, excluding seasonal effects (Chart 3).
  • Package and test revenues are nearing a record high (Chart 4).
  • Taiwan memory company sales have plateaued near a 7-year high (Chart 5).
  • Passive component shipments continue to “skyrocket” (Chart 6).
  • Solar/Photovoltaic revenues are recently flat (Chart 7).
  • ODM shipments are growing seasonally towards their normal late year peak (Chart 8).
  • Printed circuit sales have risen above their trend line (Chart 9).
  • CCL (PCB laminate) sales remain strong and “in sync” with PCB shipments (Chart 10).

Source: Company monthly sales as reported to Taiwan Stock Exchange and analyzed by Custer Consulting Group

 

2Q’18 Growth Update

  • Chart 11 is our updated estimated US$ denominated global growth of electronic supply chain for 2Q’18 vs 2Q’17.  This is based on a combination of company financial reports and our estimates for companies that have not yet reported their second quarter result.
  •  Separately we have estimated monthly world electronic shipments based on a consolidation of regional data (Chart 12). Shipments were up over 16% in July 2018 vs. July 2017.
  • Chart 13 compares the results of the company (Chart 11) and regional (Chart 12) roll ups for global electronic equipment shipments.
  • Based on the Chart 11 methodology global electronic equipment sales consolidated in US$ were up 9.4% in 2Q’18 vs. 2Q’17 (Chart 14).
  • Based on the preliminary data used to create Chart 11 global electronic equipment sales have peaked on a 3/12 growth basis (Chart 15).
  • A number of large OEMs have yet to report their calendar second quarter results including Dell, HP, Applied Materials, Cisco and Medtronic.  In addition 2Q’18 PC, server and mobile phone estimates are still being compiled. Therefore Chart 11 is still very much an estimate for certain sectors.

Some sectors are already well reported.

  • Automotive was up 11% (Chart 16) with 3/12 growth peaking in 2Q’18 (Chart 17).
  • Instrument and control equipment revenues grew 10% in 2Q’18 (Chart 18) with 3/12 growth also peaking (Chart 19).
  • Medical equipment sales grew almost 9% (Chart 20) with 3/12 growth continuing to rise (Chart 21).
  • Semiconductor fab, test and measurement sales rose 21% in the second quarter (Chart 22) with growth plateaued (Chart 23).

Source: Company financial reports and regional data analyzed by Custer Consulting Group

 

300 Million Electric Cars on Road by 2040

Electric vehicles are set to fully transform the automotive industry over the next five years

According to GlobalData, a data and analytics company, electric vehicles are set to bring a significant transformation to the automotive industry.

The electric vehicle is one of four items that are disrupting the legacy automotive industry – joining the connected car, autonomous driving technology, and transport-as-a-service. This doesn’t come as a surprise, as EV adoption rates are climbing throughout the world. Additionally, all three other items are set to revolutionize several fields, most notably the safety aspect brought on by the autonomous driving technology.

The latest report by GlobalData titled Electric vehicles – Thematic Research, envisions that globally, while there are only 3 million electric vehicles running wild, this could rise to a staggering 300 million by 2040.

Over the next five years, we expect stress, strain, margin evaporation, and shake out across much of the legacy automotive industry and its Tier-1 parts suppliers as a slow growth industry incurs the expense of conversion to electric vehicle and autonomous driving technology. – Cyrus Mewawalla, Head of Thematic Research at GlobalData.

Furthermore, GlobalData predicts that the percentage of new electric vehicle registrations will go from just 1% of global passenger vehicles in 2017, all the way up to more than 15% by 2030. However, they predict that large-scale commercial production of EVs among the largest car makers will unlikely take off before the year 2025, providing ample room for newcomers in the industry to create a foothold in the market. In turn, the legacy car industry will be in for a period of higher capital expenditure.

This is needed due to tougher regulations hitting their current diesel and petrol models, increased M&A activity (Merger and acquisition), increased R&D expenditure, smaller margins, and unprecedented technological disruption. Moreover, GlobalData comes with an ominous prediction that many current car makers will not be able to survive this ever changing tech disruption world, and will go away to become a footnote in the history books.

We are at the very beginning of the cycle, but over the next decade the automotive value chain will be transformed by the electric vehicle theme. – Cyrus Mewawalla

Source: Green Car Congress

https://insideevs.com/globaldata-300-million-electric-cars-by-2040/


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.

View other posts from Walt D. Custer. View other posts from Walt D. Custer.

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