Europe Update: Post-Brexit Impact
(Charts 1-13)
After Brexit, the euro (chart 1) and UK pound (chart 2) have weakened versus the U.S. dollar.
Eurostat has updated its European production series to show the EU27 versus the EU28 group of countries:
- Chart 3 shows the annualized (12/12) and 3-month (3/12) growth of the European electronic supply chain and chart 4 compares is 4Q’19 vs. 4Q’18 growth
- Monthly industrial production increased in January (chart 5)
- Total January electronic equipment production declined (chart 6)
- Instruments and appliances for measuring, testing and navigation (chart 7) and irradiation, electromedical and electrotherapeutic equipment (chart 8) output increased in January
- Communication equipment production rose slightly (chart 9)
- Automotive (chart 10) and aerospace equipment production declined (chart 11)
- Loaded board output held near its high (chart 12) and wiring device (PCB) production increased (chart 13)
Source: Eurostat data analyzed by Custer Consulting Group
PCB Market Conditions: Report from Dr. Nakahara
Dr. Hayao Nakahara writes:
Almost all my clients in Asia (China, Taiwan, Southeast Asia and Japan) are 90 percent recovered, but some of their customers are still loaded at 50 percent or below of their peak time production. If the PCB makers are capable of making sufficient production, the products will have to be warehoused.
The Japanese PCB market in “calendar year” 2019 was a disaster. Since their “Fiscal Year” Q4 is Q1 2020, there will be more trouble. They have too much dependence on Apple, although IS substrates are doing fine.
There are about 224 makers in North America (195 in the US and 29 in Canada); the total production was about $3.2 billion in North America, but I estimate that $350-$400 million were imported by PCB makers as subcontracts. Therefore, about $2,800 to $2,850 million was made in North America in 2019. This is my estimate.
Source: Personal communication from Dr. Hayao Nakahara
Semiconductor Supply Chain Turning Conservative
The coronavirus pandemic is sweeping across the U.S. and Europe, casting a shadow over the consumer electronics market. Digitimes reports that the semiconductor supply chain fears that the end-market demand may not pick up until 2021.
In China, where the epidemic seems to be easing, supply chains reportedly are quickly returning to normal operations. But makers are still worried that the impacts of the virus in other parts of the world may chill demand. For motherboard and graphics cards makers, shipments in first-half 2020 are expected to drop to record-low levels.
Chipmakers turn pessimistic about end-market demand in 2020: Some chipmakers, as well as others engaged in the semiconductor industry, have turned pessimistic about end-market demand this year, judging from a more severe than expected impact from the quickly spreading coronavirus.
Supply chains are fast returning to normal in China: Electronics supply chain makers with operations in China are accelerating production resumption as the coronavirus epidemic there eases, and upstream components suppliers are fulfilling shipments as fast as possible to avoid any undesirable changes to their orders in hands, according to industry sources.
Mobo and graphics card shipments set to hit record low: Global motherboard and graphics card shipments are set to drop to record-low levels in the first half of 2020, thanks to the quickly spreading coronavirus pandemic sweeping over 130 countries, according to sources from motherboard companies.
Source: www.digitimes.com
Gartner: World Server Market Revenue Up 5.1%, Shipments Grew 11.7% in 4Q’19
(Charts 14 & 15)
The worldwide server market continued to grow in the fourth quarter of 2019, as revenue increased 5.1 percent and shipments grew 11.7 percent year-over-year, according to Gartner, Inc.
In all of 2019, worldwide server shipments declined 3.1 percent and server revenue declined 2.5 percent compared with full-year 2018.
“The market returned to growth with a very strong fourth quarter result, largely driven by a return of demand from hyperscalers,” said Adrian O’Connell, senior research director at Gartner. “However, the outlook for the worldwide server market in 2020 is subject to great uncertainty.”
“The impact of the coronavirus (COVID-19) outbreak is expected to temper forecast growth. Although demand from the hyperscale segment is expected to continue through the first half of the year, other buying organizations’ reactions will vary,” O’Connell said.
Source: www.gartner.com
North America-Based Semi Equipment Manufacturers Posted $2.37 Billion in Billings Worldwide in February
(Chart 16)
North America-based manufacturers of semiconductor equipment posted $2.37 billion in billings worldwide in February 2020 (3-month average basis), according to SEMI.
The billings figure is 1.2 percent higher than the final January 2020 level of $2.34 billion, and is 26.2 percent higher than the February 2019 billings level of $1.88 billion.
“February billings of North American equipment suppliers extended a robust uptrend that began in December 2019,” said Ajit Manocha, SEMI president and CEO. “Despite continuing industry disruptions from the global spread of COVID-19, monthly billings for the year still remain above 2019 levels.”
Source: www.semi.org
Worldwide Converged Systems Market Revenue Up 1.1% YoY to $4.2 Billion in 4Q’19
(Charts 17 & 18)
According to the International Data Corporation (IDC), worldwide converged systems market revenue increased 1.1 percent year-over-year to $4.2 billion during the fourth quarter of 2019 (4Q’19).
“Hyperconverged system sales remained robust during the fourth quarter and carried overall converged systems market growth despite annual declines of other product types,” said Greg Macatee, research analyst, Infrastructure Platforms and Technologies at IDC.
“The hyperconverged system growth picture was largely consistent across the globe with growth in every region in the low to mid double-digit range as these types of systems continue to provide value to a wide variety of businesses in both hybrid and multicloud environments given their easy-to-deploy and automated software-defined nature.”
Converged Systems Segments
IDC’s converged systems market view offers three segments: certified reference systems and integrated infrastructure, integrated platforms, and hyperconverged systems. The certified reference systems and integrated infrastructure market generated nearly $1.3 billion in revenue during the fourth quarter, which represents a contraction of 18.5 percent year-over-year and 30.7 percent of all converged systems revenue.
The integrated platforms segment grew 0.1 percent year-over-year in 4Q’19, generating $620 million worth of revenue. This amounted to 14.8 percent of the total converged systems market revenue. Revenue from hyperconverged systems grew 17.2 percent year-over-year during the fourth quarter and totaled $2.3 billion. This amounted to 54.5 percent of the total converged systems market revenue.
Source: www.idc.com
U.S. Industrial Production Rose 0.6% in February After Falling 0.5% in January
(Chart 19)
Industrial production in the U.S. rebounded by more than anticipated in the month of February, according to the Federal Reserve.
The stronger than expected growth was partly due to a substantial rebound in utilities output, while spikes by 7.1 percent in February after plunging by 4.9 percent in January as temperatures returned to more typical levels.
Source: www.federalreserve.gov
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