2018 Starting Off Right
CUSTER AND CUSTER – WALT CUSTER AND JONATHAN CUSTER
There is a lot to like about the current industry data. The third quarter finished strong, most sectors continued their expansion through year end and 2018 has started in a growth mode.
Almost all sectors of the global electronic supply chain had positive growth in 3Q’17 vs. 3Q’16 with semiconductors and PCB and SEMI capital equipment leading the charge (Chart 1).
The global Purchasing Managers Index (a leading indicator of electronic manufacturing activity) is at its highest level since early 2011 (Chart 2) indicating that 2018 is off to a good start.
Thanks to broad end market demand (amplified by the Apple iPhone X introduction) fall monthly world electronic equipment shipments reached a record high in November (Chart 3). China and S. Korea were big drivers but the U.S. awakened with increased electronic equipment order and shipment growth (Chart 4) and Europe is doing well. Keep in mind that much of the consumer driven, Asia/Pacific-centric production is highly seasonal and will plunge this winter but the organic, annualized growth was excellent.
Semiconductor (Chart 5) and semiconductor capital equipment (Chart 6) set sales records in 2017 thanks to both strong electronic equipment sales and much higher prices and demand for memory chips.
Printed circuit boards also had a relatively decent year (Chart 7) but did not experience the price and volume inflation that drove semiconductors.
We appear to be off to a good start in 2018. Keep in mind that normal seasonality will limit winter sales but in general demand seems to be strong and broad based – both by product type and geography.
If there is a fear, it is potential geopolitical unrest. Since 74% of the world’s memory chips are made in S. Korea an outbreak on the Korean peninsula would be devastating –both to the people affected and also our global industry.
• Smartphones sales to end users increased 3% y/y to 383 million units in 3Q17. –Gartner
• Smartphone production will expand 6.3% y/y to 425 million units in 4Q17. –TrendForce
COMPUTERS & PERIPHERALS
• Personal computing devices (desktop, notebooks and workstations) and tablets (slate, detachable) shipments will decline 2.7% y/y from 423 million in 2017 to 393 million in 2021. –IDC
• Enterprise storage systems factory revenue rose 14% y/y to $11.8 billion in 3Q17. –IDC
• Gaming notebook shipments will grow from 4.5 million units in 2016 to 5.5 million in 2017. –Digitimes
• Notebook shipments will drop at 3.2% CAGR to 140 million units by 2022. –Digitimes Research
• Tablet shipments will decline 10% y/y to 128 million units in 2018. –Digitimes Research
• India’s tablet market shipments grew 3% y/y to 1.1 million units in 3Q17. –IDC
• India’s traditional PC shipments expanded 20.5% y/y to 3 million units in 3Q17. –IDC
• IT spending will increase 9.2% y/y to $87 billion in 2018. –Gartner
• Server market vendor revenue increased 19.9% y/y to $17 billion in 3Q17 as shipments increased 11.1% y/y to 2.67 million units. –IDC
• Enterprise WLAN market grew 2.8% y/y to $1.49 billion in 3Q17. –IDC
• Ethernet switch market (Layer 2/3) revenue increased 7.4% y/y to $6.75 billion in 3Q17. –IDC
• Managed cloud services market will grow at nearly 18% CAGR to $63 billion in 2021. –IDC
ARTIFICIAL INTELLIGENCE & AUGMENTED AND VIRTUAL REALITY
• Augmented Reality market will grow at 85% CAGR from around USD 3.3 billion in 2015 to USD 134 billion in 2021. –Zion Market Research
• Virtual reality market value will increase at 54% CAGR from approximately USD 2 billion in 2016 to $27 billion by 2022. –Zion Market Research
• China’s artificial intelligence production value will increase to CNY360 billion (US$55 billion) in 2017 from CNY300 billion in 2016. –China’s Ministry of Industry and Information Technology
• Human machine interface market value will grow at 9% CAGR to USD 5.9 billion by 2022. –Reportlinker
• Automotive power electronics market will expand at 19% CAGR to US$22.7 billion by 2025. –Transparency Market Research
• Car accessories market share value will grow at 6.4% CAGR from USD 361 billion in 2016 to USD 520 billion by 2022. –Zion Market Research
INTERNET OF THINGS
• Internet of Things spending will increase of 14.6% y/y from $674 billion in 2017 to $772 billion in 2018 and sustain a 14.4% CAGR surpassing $1 trillion mark in 2020 and reaching $1.1 trillion in 2021. –IDC
• Medical electronics market will increase at 5.4% CAGR from USD 3 billion in 2015 to USD $4.5 billion by 2022. –MarketInsightsReports
• Robotics (including drones) and related services spending will grow at 23% CAGR from more than $82.5 billion in 2016 to $231 billion in 2021. –IDC
• Collaborative robots market will expand at 57% CAGR to USD 4.4 billion by 2023. –Energias Market Research
• Consumer and professional drone market will expand from $6 billion in 2016 to $11 billion in 2017. –Gartner
• Enterprise robot shipments will grow at 57% CAGR from approximately 83,000 units in 2016 to 1.2 million units annually by 2022. –Tractica
• Swarm intelligence market value will grow at 40% CAGR to USD 447 million by 2030. –Research and Markets
• Japanese robot suppliers production capacity reached 153,000 units, valued at approximately $2.7 billion in 2016; accounting for 52% of global industrial robot supply. –International Federation of Robotics
• TV shipments declined 5% y/y to 55 million units in 3Q17, while revenues increased by 1% and average selling prices were up 6% due to growth in average size and 4K mix improvement. –IHS Markit
• Wearables market grew 7% y/y to 26 million units in 3Q17. –IDC
• 3D printing market revenue will grow at 18% CAGR from US$7.3 billion in 2016 to US$32.3 billion by 2025. –Transparency Market Research
EMS, ODM & RELATED ASSEMBLY ACTIVITY
Benchmark Electronics started construction on Tempe, Arizona, HQ.
Celestica expanded its operation in Oradea, Romania by 9,000 SM.
Digicom Electronics is celebrating 35th year as an EMS company in the California Bay Area.
Dynamic EMS secured ISO 13485 certification for medical device industry.
East/West Manufacturing Enterprises achieved ISO standard 9001:2015 certification.
EG Industries is expanding its Sungai Petani plant from 215,307 SF to about 260,000 SF.
Foxconn/ Hon Hai
• officially committed to constructing a 32-million-SF flat screen and display panel manufacturing complex in Racine County, Wisconsin.
• spent NT$46 billion (equivalent to 1.5% of its total sales) on R&D during the nine months of 2017.
GPV installed a complete Yamaha SMT-manufacturing line for its new plant in Guadalajara, Mexico.
IEC Electronics’ Analysis and Testing laboratory in Albuquerque, NM achieved ISO/IEC 17025:2005 accreditation renewal from ANSI-ASQ National Accreditation Board.
Jabil opened a 3,500 M2 Blue Sky Innovation Center at its manufacturing plant in Marcianise, Italy.
Leoni opened a 25,000 M² wiring systems plant in Merida, Mexico.
• elevated Robert Brandt to IEEE Senior Member.
• installed a Viscom X8011-II PCB X-ray inspection system and a second Omron VT-S730 3D post reflow AOI system at its Dallas, Texas facility.
NEO Tech opened a second Agave manufacturing site in Ciudad Juarez, Mexico.
Neways Electronics increased its proChart
duction area from 3,750 M2 to 8,250 M2 (88,802 SF) at its Decín, Czech Republic plant to accommodate higher demand for automotive electronics.
Optimal Electronics hired Texas Wai Sze as Sales Manager for its new office in Shenzhen, China.
• expanded its Oradea Design Center in Romania.
• Riverside facility in Penang, Malaysia achieved UTC aerospace systems Supplier Gold status.
Quanta Computer is expanding its assembly lines for data center servers in both the U.S. and Europe.
RH Technologies added Nordson SELECT Integra™ 508.5 in-line selective soldering system for their third selective soldering line in Nazareth, Israel.
Samsung Electronics retained its title as the largest smartphone assembler in the world, ahead of Hon Hai (2nd) and Oppo (3rd) in 3Q17. –IDC
Versa Electronics completed ISO 9001:2015 transition and achieved ISO 13485:2003 registration.
FPCB market will increase at 10.7% CAGR from USD 13.5 billion in 2016 to USD 27.6 billion in 2023. –Energias Market Research
Aspocomp named Mika Sillgren, Global Account Manager/ Large Accounts.
Career added a total of 11 Nuvogo and Orbotech Diamond 8 DI solutions in Taipei, Taiwan and Kunshan, China.
Esse Ti Elettronica installed a Cemco’s Digital Drive + Quicksilver hot air leveler.
FTG Circuits added an Orbotech Nuvogo 1000 DI solution and Fusion 20 AOI solutions in Toronto, Ontario.
IPC released G Revisions of IPC-A-610 and IPC J-STD-001 standards.
Protecno add an Orbotech Nuvogo DI solution in France.
Sanmina is closing its Owego, New York plant.
TTM Technologies acquired Anaren.
Unitech Printed Circuit Board expects growth in 2018 to come from rigid-flex PCBs and automotive-use PCBs (each expected to contribute 25-30% to revenues) and any-layer HDI PCBs with 15-20% contribution.
Materials & Process Equipment
Automated test equipment market will reach USD 4.6 billion by 2025. –Research and Markets
• coatings market will expand at 6.8% CAGR from $15.1 billion in 2016 to $24.4 billion by 2023. –Allied Market Research
• inks market will grow at 4.8% CAGR from $3.1 billion in 2016 to $4.3 billion by 2023. –Wiseguyreports.com
Electronic circuit board level underfill material market value will reach more than US$ 445 million by 2027. –Future Market Insights
Glass fiber market will grow at 4.8% CAGR to $9.4 billion by 2022. –Lucintel
Laser processing machine market will expand at 7.5% CAGR to $23 billion by 2023. –Reportbuyer
Polyimide films market will reach $3.6 billion by 2023. –P&S Market Research
Test and measurement equipment market value will grow at 3.6% CAGR from USD 23.5 billion by 2017 to USD 29 billion by 2023. –MarketsandMarkets
Thermoset molding compound market will grow at 7% CAGR from $8.4 billion in 2016 to $13.6 billion by 2023. –Absolute Reports
Air Products started operation of new ultra-high purity gas plant in Nanjing, China.
BASF Korea began the operation of its new electronics materials plant in Yeosu, South Jeolla.
Camtek received ISO 9001:2015 certification.
Cadence Design Systems appointed Anirudh Devgan, President.
established a local subsidiary in Nanjing, China, with total investments exceeding CNY100 million (US$15.1 million).
Conveyor Technologies merged with Alotech.
CVD Equipment purchased an additional 180,000 SF facility in Central Islip, New York.
DDM Novastar was sold to Robert Voigt, who became President and CEO and moved company to bigger and more modern facilities in Warminster PA.
Dymax appointed Jason Maupin, Chief Marketing and R&D Officer.
ESI appointed Allen Muhich, CFO.
Gelest named Ken Gayer, CEO.
Henkel invested in advanced materials start-up Copprint Technologies.
Indium promoted Greg Evans to CEO, Ross Berntson to President and COO and Anita Brown to Associate Director, Marketing Communications.
• named Mark Pierpoint, Acting President, Ixia Solutions Group.
• leased 104,000 SF temporary space in Rohnert Park’s SOMO Village to resume operations following the Santa Rosa, California fires.
Mitsui Metal Smelting expanded its manufacturing capacity of “Micro Thin” (1.5 ~5 micron thick) copper foil with carrier sheet to 3.9 million SM/month.
Nano Dimension and XponentialWorks opened a Customer Experience Center in Ventura, California.
RBP Chemical Technology completed transition to ISO 9001:2015.
Scienscope promoted Don Jeka to National Sales & Marketing Manager for Its X-ray Division.
Taiyo America appointed Tadahiro Miyoshi, Product Development Manager.
Ventec International Group received IPC-4101 qualified products listing certification.
• is celebrating 26th year in business.
• added Charlie Stromwall as a Sales Engineer for Northern California as well as the Northwest States and Greg McKay as Business Development Manager for medical products.
Yelo opened a 25,000 SF facility at Trooperslane Industrial Estate in Carrickfergus.
• Semiconductor equipment quarterly billings increased 30% y/y to record US$14.3 billion in 3Q17. –SEMI
• Semiconductor foundry revenue will grow 7.1% y/y to USD 57.3 billion in 2017. –TrendForce
• Semiconductor packaging materials market will grow at 5.3% CAGR through 2021 from $15 billion in 2016. –Technavio
• semiconductor industry revenue will exceed RMB 620 billion in 2018. –TrendForce
• IC design industry revenue will grow 22% y/y to $30 billion in 2017 and another 20% y/y to $36 billion in 2018. –TrendForce
• domestic IC production will increase 19.39% y/y to $78 billion in 2017. –TrendForce
N America-based semiconductor equipment world billings increased 23.7 y/y (3-month average basis) to $2.02 billion in October 2017. –SEMI
Taiwan IC revenue (for design, manufacturing, packaging and testing) dropped 2.5% y/y to NT$643 billion (US$21.2B) in 3Q17. –TSIA
Automotive systems’ IC sales will grow from $23 billion in 2016 to $43 billion in 2021, while IoT IC sales are forecast to grow from $18.4 billion in 2016 to $34 billion in 2021; 70% faster than total IC revenues sales growth during same period of time. –IC Insights
Internet of things chip market will grow by 21% y/y to $410 billion in 2017. –World Semiconductor Trade Statistics
FPGA market will grow at 9% CAGR from USD 7.1 billion in 2016 to USD 13 billion in 2023. –Energias Market Research
System in Package market will grow at 9.4% CAGR from USD 5.8 billion in 2017 to USD 9.1 billion by 2023. –MarketsandMarkets
• German component distribution market soared by 17.6% to 937 million euros in 3Q17, while incoming orders grew 24.5% to 993 million euros, yielding a book/bill of 1.06 –FBDi e.V.
• Radiation-hardened electronic components market value is expanding at 4.9% CAGR from 978 million in 2016 to 1500 million by 2025. –Research N Reports
• Thermoelectric modules market will grow at 9.1% CAGR from USD 528 Million in 2017 to USD 890 Million by 2023. –MarketsandMarkets
• Encapsulants market value will expand at 5.5% CAGR from USD 1.26 billion in 2017 to USD 1.64 billion by 2022. –Reportbuyer
• Connector industry sales increased 8.4% y/y to $15,650 million in 3Q17. –Bishop & Associates
• Medical connectors market value will grow at 6.3% CAGR to $2.8 billion by 2023. –P&S Market Research
• Automotive pressure sensors market value will grow at 9.7% CAGR from USD 4.2 billion in 2017 to USD 8.8 billion by 2025. –MarketsandMarkets
• Biometric sensors market will grow at 10.6% CAGR from USD 864 million in 2016 to USD 1,750 million by 2023. –Energias Market Research
• Magnetic sensor market will expand at 7% CAGR from 1.6 billion in 2016 to $2.5 billion in 2022. –Yole Developpement
• Optical sensing market is growing at 16% CAGR from $1.2 billion in 2016 to $3.5 billion by 2023. –Research and Markets
DISPLAYS, PANELS, MONITORS
• Flat panel demand will grow 7.2% y/y to 210 million SM in 2018. –IHS Markit
• Microdisplay market will grow at 22% CAGR from $1.12 billion in 2016 to reach $4.6 billion by 2023. –Stratistics
• OLED market value will grow at 15% CAGR to 49 billion USD by 2023. –MarketsandMarkets
• Smartphone panels shipments increased 1% y/y to 530 million units in 3Q17. –Sigmaintell
• Ultra-thin glass market will grow at 11.8% CAGR from USD 9.7 billion in 2017 to USD 17 billion by 2022. –Research and Markets
• China LED lighting market will exceed $24 billion by end 2024. –Renub Research
MEMORY AND STORAGE
• DRAM revenues climbed 16.2% q/q to a record US$19 billion in 3Q17. –DRAMeXchange
• NAND flash industry revenues increased 14.3% q/q to US$15 billion in 3Q17. –DRAMeXchange
• Next-generation memory market will grow at 26.5% CAGR from USD 2.35 billion by 2017 to USD 9.7 billion by 2023. –Research and Markets
• Stretchable electronics market will grow at 85% CAGR from US$28 million in 2017 to US$606 million by 2022. –Research and Markets