Good News but Keep Watching!
C U ST E R A N D C U ST E R
Good News but Keep Watching!
WALT CUSTER AND JONATHAN CUSTER
The first quarter of this year was very strong globally. The entire electronic supply chain grew. Although Chart 1 is based on preliminary data every electronic sector expanded –with many in double digits. It should be noted that the growth estimates in Chart 1 are U.S. dollar denominated and have effectively been amplified by exchange rates, as stronger non-dollar currencies were consolidated to weaker U.S. dollars. This “exchange rate related” growth amplification is in the order of +5% but the first quarter global rates are still very impressive.
U.S. growth was also good (Chart 2) with total electronic equipment shipments up 7.2% in 1Q’18 vs. 1Q’17. Since all the Chart 2 values are based on domestic (US$) sales there is no growth amplification due to exchange rates.
Global semiconductor shipments remained very robust in the first quarter driven by higher memory prices. Global sales were up 20% in the first quarter with shipments to North America up over 35% (Chart 3). Domestic chip growth rates are well in excess of end market demand suggesting that a downward correction will soon occur.
Passive component availability and pricing are currently major issues. Per Chart 4 revenues increased almost 25% in 1Q’18 vs. 1Q’17. Inadequate component supplies are hampering many board assemblers with no short term relief in sight.
EMS companies also had a good first quarter (Chart 5) with an 11% first quarter sales increase. ODM sales were quite volatile with record year-end monthly revenues followed by a strong seasonal downward correction in early 2018 (Chart 6).
Looking forward the global purchasing managers index (Chart 7), although more subdued, is still well into growth territory. The business outlook remains positive but requires continuous watching!
Smartphone market shipments declined 2.9% y/y to 334 million units in 1Q18. –IDC
China’s smartphone shipments fell 16% y/y to 87.5 million units in 1Q18. –IDC
Europe, Middle East, and Africa smartphone volumes dropped to 361 million units in 2017 vs. 374 million in 2016 while feature phone shipments rose by 8.7% to 206 million. –IDC
COMPUTERS & PERIPHERALS
Tablet shipments fell 14.9% y/y to a new quarterly low of 31 million units in 1Q18. –Digitimes Research
Asia Pacific (excluding Japan and China) commercial shipments of PCs (desktops, notebooks, excluding workstation) and tablets (slates and detachables) increased 7% y/y to 19.2 million units in 2017. –IDC
Europe, Middle East, and Africa traditional PC market (desktops, notebooks, and workstations) grew 0.6% y/y to 17.5 million units in 1Q18. –IDC
Global electric vehicle sales are expected to reach more than 1.6 million EVs in 2018. –Research and Markets
Plug-in electric vehicle charging equipment sales and installation market is forecast to grow from $6.5 billion in 2018 to over $36 billion in 2027. –Navigant Research
Automotive electronics control unit market is estimated to grow at 6.7% CAGR from USD 35 billion in 2016 to USD 54 billion by 2024. –Hexa Research
Electric traction motor market value will grow at 18% CAGR from an estimated USD 12.4 billion in 2018 to 28.5 billion USD by 2023. –MarketsandMarkets
• Lane Keep Assist System & Adaptive Cruise Control market value is expected to expand at 14% CAGR to US$ 29 billion by 2025. –Transparency Market Research
• Automotive wiring harness market is estimated to grow at 5.6% CAGR to US$ 98 billion by 2023. –Market Research Future
• Automotive connectors’ market size will expand at 7.6% CAGR from USD 5 billion in 2018 to USD 7.4 billion in 2023. –HNY Research
• Automotive LED lighting market revenue is expected to grow at a 10.5% CAGR from cumulative revenue of US$ 22 billion between 2017-2021 to US$ 37 billion between 2022-2026. –MarketResearch.biz
• Global geospatial imagery analytics market value is projected to expand at 7% CAGR from US$ 4,567 million in 2016 to US$ 8,950 million by 2026. –Transparency Market Research
INTERNET OF THINGS
Industrial Internet of Things (IIoT) market is expected to grow 8% CAGR from approximately USD 146 billion in 2017 to USD 232 billion by 2023. –Zion Market Research
Robotics-as-a-Service installed base will grow from 4,440 units in 2016 to 1.3 million in 2026. –ABI Research
Smart home devices shipments reached 433 million in 2017. –IDC
Smart Toy revenues are forecast to grow by almost 200% from estimated $6 billion in 2018 to $18 billion by 2023. –Juniper Research
Smart Robotics in manufacturing market will grow 16% CAGR from $910 million in 2017 to $1.9 billion by 2022. –BCC Research
Global motherboard shipments are estimated to decline at least 10% y/y in 2018 after posting an annual fall of 15% in 2017, due partly to abrupt shrinkage in demand for mining motherboards. –Digitimes
China’s large-scale electronic information manufacturing industry revenue was more than 13 trillion yuan in 2017. –Ministry of Industry and Information Technology
EMS, ODM & Related Assembly Activity
Celestica bought Atrenne Integrated Solutions.
Compass Group Equity Partners acquired Logic PD.
Contract Production invested in an AM100 Panasonic pick & place line.
Cyclops Group acquired DJ Assembly.
Ekuinas purchased a controlling stake in Flexi Versa Group.
Electronic Systems Inc. purchased three new Fuji AIMEX III surface mount placement machines.
Elemaster acquired GDM Electronics.
Firstronic Juarez, Mexico facility achieved IATF 16949:2016 and ISO- 9001:2015 certifications.
Foxconn/ Hon Hai
acquired 7.32% stake in Epileds Technologies from Catcher Technology.
cut the company’s capitalization by NT$35 billion (US$1.2 billion) for the first time since it was listed on the local bourse in 1991.
has begun construction on US$10 billion LCD manufacturing factory in Mount Pleasant, Wisconsin.
FuG Elektronik invested in a SMD assembly system with the pick & place mounter and dispenser Paraquda from Essemtec to develop components for nuclear fusion.
increased 3D printing leadership & manufacturing agility with Jabil Additive Manufacturing Network.
promoted Michael Dastoor to succeed CFO.
Libra Industries expanded its factory-wide Cogiscan Track, Trace & Control software to cover its AOI operation on multiple lines.
acquired 432,000 SF manufacturing facility in Penang, Malaysia.
plans to construct a second manufacturing facility in Guadalajara, Mexico.
PRIMEPULSE acquired EMS service provider Katek.
Qisda adopted smart factory solutions at its factory in Taoyaun, Taiwan.
Season Group added Unicomp AX-8200HR X-Ray and Aleader ALD625Pro AOI machines to its site in Havant, Hampshire, UK.
SlingShot Assembly acquired BEI Electronics.
SMTC appointed Phil Wehrli, Sr. VP Global Planning and Supply Chain.
Syrma Technology set up its fifth PCBA unit in the Delhi-Mumbai corridor.
TT Electronics completed its acquisition of Stadium Group.
UK Electronics installed a Samsung Hanwha SM481 Plus flexible pick and place machine and a Samsung SP450V fully automated screen printer in Royton, UK.
Zollner Elektronik completed the construction on its 12.500 m² HQ near the village of Zandt in the Netherlands.
Global flexible printed circuit market is forecast to grow at 12.7% CAGR from US$15 billion in 2017 to $31 billion by 2023. –Research and Markets
ACT VINA invested US$7 million to establish a plant in Vietnam’s province of Vinh Phuc.
AT&S (China) received High and New Tech Enterprise certificate, which was jointly issued by Shanghai Taxation Bureau, Shanghai Finance Bureau and Shanghai Science and Technology Commission.
Chin-Poon expects the fire at its plant in Taoyuan, Taiwan to affect 15% (US$10 million) of revenues.
Christian Enzmann changed its name to KCE Printed Circuit Boards.
Cirexx International installed a Dynachem CSL1700 cut sheet laminator.
Dongshan Precision is building a PCB manufacturing plant, which will have a flexible circuit board capacity of 80,000 SM/month, in China’s Yandu District.
Fineline VAR acquired Prestwick Circuits.
Guangdong Kexiang Electronic Technology invested 3 billion yuan to build a 75,000 SM PCB manufacturing plant in China’s Chengxi Port Area, Jiujiang Economic and Technological Development Zone.
Guangzhou Hong Hi-Tech invested 10,100 million yuan to expand its high-precision multilayer circuit board annual output by 600,000 SM and build a mobile equipment production line in China’s Jiujiang Economic Development Zone.
KCE Electronics’ Board appointed Pitharn Ongkosit as 1St Vice Chairman and Paja Senadisai as 2nd Vice Chairman.
Longchuan Yaoyu Technology invested 600 million yuan to build a flexible circuit board production line
with an initial annual output of 90,000 SM in China’s Chengxigang District, Jiujiang Economic Development Zone.
Merlin Circuit Technology added a Fischer XDAL 237 SDD XRF machine.
MMAB Group established a subsidiary in Finland.
Sanmina closed its Owego, New York facility –one of its three remaining printed circuit board operations.
Shenzhen Huaqiang Jufeng Electronic Technology invested 1.7 billion yuan to establish more than 10 full-process multilayer precision circuit board production lines and 15 SMT patch lines in Jiujiang Huaxiang Science and Technology.
Shogini Technoarts’ PCB manufacturing plant in Ambegaon Budru, India was damaged by a fire.
Spirit Circuits hired Simon Rowe as Business Development Manager VAR Sales.
TTM Technologies completed its acquisition of Anaren.
Zhuhai Wangwang plans to expand annual output by 3 million m2 of high-density printed circuit boards and 2 million m2 of flexible circuit boards with new construction project in Guangdong Huanrong.
Materials & Process Equipment
Advanced Copper Foil introduced arsenic-free copper foils.
AIM Solder appointed Eric Moen to Business Development Manager.
Alpha Assembly Solutions began producing solder products made from 100% recycled tin.
BASF appointed Martin Brudermüller to succeed Kurt Bock as CEO.
Coherent acquired OR Laser.
DJ MicroLaminates raised $1.3M to scale up its manufacturing capacity with new employees, equipment and materials.
Hentec Industries/RPS hired Tom Baro as North America Sales Manager.
Hitachi Chemical Electronic Materials (Taiwan) is investing 7.5 billion yen ($70 million) to construct a new laminate materials factory with capacity of approximately 120,000 SM meters (copper-clad laminates) per month.
Huazheng New Materials is expanding capacity of copper clad laminates to promote the growth of honeycomb panels and aluminum plastic film.
MacDermid Performance Solutions completed its acquisition of HiTech Korea.
Nan Ya Plastics is investing US$42 million at Huizhou, China to expand construction copper-foil substrate and glass-fiber cloth factory.
Taiwan Tohcello Functional Sheetbreaks is constructing an ICROS tape plant in the Southern Taiwan Science Park.
Techcon Systems hired David Reyes as Territory Sales Manager for Midwest and Mexico.
Techsil appointed Sam White, Technical Sales Manager.
Teradyne acquired Mobile Industrial Robots.
Versum Materials opened a new $8 million R&D facility in Rush Township, Schuylkill County, Pennsylvania.
ZESTRON inaugurated its eighth facility in Hsinchu, Taiwan.
Worldwide semiconductor revenue grew 21.6% y/y to $346 billion in 2017. –Gartner
Worldwide semiconductors sales increased 20% y/y to $111.1 billion in 1Q18 and sales for March 2018 expanded 20% y/y to $37.0 billion. –SIA/WSTS
Top 10 IC suppliers in the $54.5 billion analog market in 2017 accounted for 59% or $32.3 billion, of the category’s worldwide sales. –IC Insights
Semiconductor materials sales increased 10% y/y to $46.9 billion in 2017. –SEMI
Semiconductor packaging materials
market is forecast to grow from $16.7 billion in 2017 to $17.8 billion in 2021. –SEMI and TechSearch International
IC industry market value has grown from 251 billion yuan (around $40 billion) in 2013 to 541 billion yuan ($86 billion) in 2017. –Ministry of Industry and Information Technology
IC production increased 15% y/y to 40 billion in 2017 while production of electronic components increased 22.7% y/y to 1.130 trillion. –MIIT
European semiconductor distribution market expanded 6.9% y/y to record 2.28 billion Euros in Q1/CY18. –DMASS
North America-based semiconductor equipment manufacturers’ worldwide billings increased 16.7% y/y (on a 3-month average basis) to $2.42 billion in March 2018. –SEMI
Taiwan’s IC sector output dropped 10.7% y/y to NT$603 billion (US$20.3 billion) in 1Q18. –TSIA
CMOS image sensor sales will grow 10% y/y to $13.7 billion in 2018, following a 19% surge in 2017. –IC Insights
IGBT power module market for automotive applications will reach US$ 2.3 billion by 2023. –Yole Développement
Integrated passive device market value will grow at 10.7% CAGR to US $1,650 million by 2025. –Transparency Market Research
RF power semiconductor market reached almost $1.5 billion for 2017, driven by GaN. –ABI Research
SiC and GaN power semiconductor market is expected to reach nearly $1 billion in 2020, energized by demand from hybrid and electric vehicles, power supplies and photovoltaic inverters. –IHS Markit
Automotive sensors market value is expected to expand at 7.6% CAGR from over US$ 17 billion in 2017 to US$ 39 billion by the end of 2028. –Future Market Insights
LED lighting market size is expected to grow at CAGR 14.4% to USD 110 billion by 2025. –Grand View Research
AMOLED panel shipment area is forecast to more than quadruple from 5 million SM in 2017 to 22 million SM by 2024. –IHS Markit
Flexible AMOLED panel shipments for smartphones are expected to increase 34% y/y to 167 million units in 2018. –IHS Markit
PRINTED, FLEXIBLE AND ORGANIC ELECTRONICS
Printed Electronics market is expected to grow at 26% CAGR from $3.3 million in 2016 to $16 million by 2023. –Stratistics MRC .