Still Solid Growth but at a Slowing Pace

WALT CUSTER AND JONATHAN CUSTER

CUSTER AND CUSTER

The global electronic supply chain enjoyed double-digit growth in 2Q’18 for many of its sectors (Chart 1). However the rate of this growth is slowing. World electronic equipment growth appears to have peaked (Chart 2) although it finished the second quarter at near a +10% expansion rate versus the same quarter in 2017. Domestically it is still expanding (Chart 3) but on a world basis growth is moderating.


The EMS/ODM industries are mirroring electronic equipment with sales also up 10% worldwide in the second quarter (Chart 4).


Semiconductor sales continue to climb (Chart 5). Based on the SIA/WSTS recent forecast chip shipments will be up 21.6% this year followed by 15.7% next year and 5.2% in 2020. Semiconductor capital equipment demand remains strong (Chart 6) but its sales growth is also slowing.


In the PCB industry the growth of process equipment, materials and laminate have all peaked (Chart 7).
We have enjoyed an excellent industry expansion but we should be a cautious as we move into 2019.

Electronic Equipment End Markets

WORLD
•  Global electronic systems market will grow 5% y/y to $1,622 billion in 2018 while average semiconductor content in an electronic system reaches 31.4%. –IC Insights

MOBILE COMMUNICATIONS

Smartphone shipments declined 1.8% y/y to 342 million units in 2Q’18. –IDC
•  China smartphone shipments fell 5.9% y/y to 105 million units in 2Q’18 while average selling prices grew by 15%. –IDC

COMPUTERS & PERIPHERALS
•  India’s traditional PC market shipments increased 28% y/y to 2.25 million units in 2Q’18. –IDC India
•  Notebook shipments held steady at 38 million units in 2Q’18. –Digitimes Research
•  Tablets shipments dropped 13.5% to 33 million units in 2Q’18. –IDC
•  Western Europe tablet shipments declined 10% y/y to 6.3 million units in 2Q’18. –IDC
•  Server shipments –based on the number of motherboards delivered –rose 9.6% to 3.84 million units in 2Q’18. –Digitimes Research

ROBOTS/AUTOMATION
•  Factory automation market value is forecast to grow at 8.8 USD CAGR from $191 billion in 2017 to $368 billion by 2025. –Allied Market Research

OTHER
•  Micro SD cards market is expected to grow at 1.5% CAGR from $5.1 billion in 2017 to $5.6 billion in 2023. –MarketResearchReports RFID printers’ market value is expected to expand at 8.2% CAGR to over US$ 2.5 billion by the end of 2028. –FutureMarketInsights

Automotive

AUTOMOTIVE ELECTRONIC COMPONENTS/ SEMICONDUCTORS
•  Global automotive IC market value is growing at 9.3% CAGR from $43 billion in 2017 to $89 billion by 2025. –Allied Market Research
•  Automotive accounted for about 9% of worldwide semiconductor revenue in 2017. –Lam Research
•  Automotive optoelectronics market value is growing at 14% CAGR from an estimated USD 3.9 billion in 2018 to USD 9.8 billion by 2025. –MarketsandMarkets
•  Vehicle power distribution market is projected to grow at a 4.2% CAGR from USD 6.5 billion in 2018 to USD 8.6 billion by 2025. –MarketsandMarkets

MARKETS
•  China’s total vehicle sales, including trucks and buses, fell 4% y/y to 1.9 million in July. –China Association of Automobile Manufacturers
•  Southeast Asia new car sales were up 4% y/y to 1.7 million units in 1H’18. –Nikkei
•  Turkey’s automotive exports increased 14% to $2.7 billion in July. –Uludağ Automotive Industry Exporters’ Association
ARTIFICIAL INTELLIGENCE & SELF DRIVING
•  Automotive AI hardware, software, and services will reach $27 billion by 2025, up from $1.2 billion in 2017. – Tractica
•  Automated guided vehicle market value is forecast to expand at 8% CAGR from USD 1.9 billion in 2018 to USD 2.77 billion by 2023.
–MarketsandMarkets
•  LiDAR Technology market value is forecast to grow at 17% CAGR from $680 million in 2017 to $1.8 billion by 2023. –Research N Reports

ELECTRIC VEHICLES
•  Europe’s plug-in electric vehicle sales expanded 37% y/y to around 185,000 units in 1H’18. –InsideEVs
•  UK new plug-in electric vehicle sales grew 26% y/y in July to 4,550 vehicles. –InsideEVs
•  U.S. plug-in electric vehicle sales reached 29 thousand units in July. –InsideEVs

BATTERIES
•  Global battery technology market is expected to grow at 7.8% CAGR from US$52 billion in 2017 to US$ 96 billion by the end of 2025.
–MarketResearchReports
•  Lithium-ion battery manufacturing equipment market is expected to grow at 5.3% CAGR from USD 1.3 billion in 2017 to USD 1.9 billion by 2025. –Converged Markets

EV CHARGING/INVERTERS/CHARGING
•  Global charging points installations to reach up to 40 million installed by 2030. –GTM Research
•  Electric vehicle range extender market is projected to grow at 12% CAGR from estimated 218,000 units in 2018 to 479,000 units by 2025.
–MarketsandMarkets

EMS, ODM & Related Assembly Activity

Worldwide EMS and ODM services revenue increased 11% y/y to $470 billion in 2017. –New Venture Research
Asia’s EMS market value is anticipated to grow at 4% CAGR from US $33 billion in 2017 to $46 billion by 2025.
–Market Research Hub

Global medical device contract manufacturing market value will grow at 9.5% CAGR from $70 billion in 2017 to $115 billion in 2022. –Visiongain

Axiom Manufacturing Services strengthened its core surface mount technology (SMT) line with the integration of the industry leading Fuji AIMEX III equipment.

Benchmark Electronics
• appointed Stephen Beaver VP and General Counsel.
• Minnesota facilities received MedAccred PCBA accreditation.

Circuit Solutions transitioned to ISO9001:2015 accreditation.

Circuitronics invested in Vitronic

Soltec’s Delta Wave soldering system that accommodates large-format PCBAs up to 24”.

Compal Electronics sold its entire holdings in Lienpal (Hefei), a notebook manufacturing JV to Lenovo for
US$257 million.

Custom Interconnect’s production facility in Andover added a Nordson SELECT Novo 460 PD selective soldering system.

Groupe Syselec installed a Europlacer atom platform range placement machine.

Hindley Circuits achieved ISO 9001:2015 certification.

Hisense set up an assembly plant in Karachi, Pakistan.

Incap Kuressaare’s Estonia factory received ISO 13485:2016 certification for manufacturing electronics for medical devices.

Kimball Electronics appointed: Desiree Castillejos, Chief Strategy Officer and VP, Corporate Development & Mergers and Acquisitions, Chris Thyen, VP, New Platforms, Kathy Thomson, VP, Global Business Development and Design Services.

Kitron is establishing an 8,000 SM production facility in Poland.

MC Assembly
• added new KEYENCE laser marking equipment to its facility in Zacatecas, Mexico.
•  installed KEYENCE includes 2000X 3D digital scopes, Coordinate Measuring Machines (CMM) and laser marking machines at the company’s three North America manufacturing facilities in Florida, Mexico and Boston.

Season Group obtained AS9100 revision D in Markham, Ontario.

Unitron installed a Europlacer iineo+ placement machine in Poperinge, Belgium.

Vexos facilities in Markham, Canada; LaGrange, USA; and Shenzhen, China achieved ISO 13485:2016 certification.

PCB Fabrication

Worldwide PCB & MCM EDA revenue grew 13.8% y/y to $193 million 1Q’18.
–ESD Alliance

Global multilayer printed circuit board market value is forecast to grow at 1.9% CAGR from 23 billion US$ in 2017 to 26.7 billion US$ by the end of 2025.
–MarketResearchReports

Worldwide HDI market is expected to grow at 12.5% CAGR from US$ 9.5 billion in 2017 to US$19 billion in 2023. –Global Info Research

Chongda Technology is building a new 6.4 million SM circuit board project in Zhuhai, China.

Coast to Coast Circuits added a COBRA-II Hybrid Laser System from Excellon.

Compass Technology relocated its HQ to Xiamen, China and turned its original base in Hong Kong into an R&D center.

Dynalyst filed for bankruptcy protection.

Eurotech factory in Exmouth Devon, UK had a fire on July 29, 2018.

Full Home Energy Group opened a circuit board plant in Kenitra, Morocco.

Greensource Fabrication added a Luther & Maelzer A8a tester.

Ichia Technologies restored its Suzhou plant to full operations after part of its etching and copper plating production lines at the plant were suspended due to environmental issues.

Jiangxi Zhongdatai Technology began construction on 20,000 SM of production facilities in Ji’an City, China.

Schweizer Electronic began building 90,000 SM production site in China’s Jintan/Jiangsu Province.

Trackwise Designs began trading on the AIM market of the London Stock Exchange with a market capitalization of GBP15.5 million.

Materials & Process Equipment

Asia-Pacific AI in manufacturing market will grow at 55% CAGR from $513 million in 2017 to $15 billion by 2025. –Allied Market Research

Articulated robot market is expected to grow at over 14% CAGR from US$ 6 billion in 2016 to USD 23 billion by 2026. –Transparency Market Research

Circuit Materials industry to grow at 3.8% CAGR from $30 billion in 2017 to $37 billion by 2023. –QYResearch

Cleaning solvents market value is forecast to increase at 6% CAGR to $1.6 billion 2027. –Future Market Insights

Conformal coatings market value will expand at 4.6% CAGR from USD 9 billion in 2014 to approximately USD 14 billion by 2023.
–Crystal Market Research

Elastomers market revenue is expected to grow at 5% CAGR to $90 billion by 2023. –IndustryARC

Electrodeposited copper foils market value is estimated to expand at 12% CAGR from US$ 6.7 billion in 2017 to US$ 16 billion by 2025.
–Persistence Market Research

Film adhesives market value is growing at 5.5% CAGR from $1 billion in 2017 to projected $1.6 billion by 2023.
–Reports Monitor

Global rigid CCL output value increased 19% y/y to US$12 billion in 2017. –CPCA
Photomask market is forecast to increase at 4.6% CAGR from US$3.7 billion in 2017 to 4.8 billion US$
in 2023.
–Orian Research Consultants

SMT market value is expected to grow at 9% CAGR at $5.4 Billion by 2022.
–MarketsandMarkets

Solder paste inspection system market revenue will register a 2.6% CAGR from US$ 240 million in 2017 to US$ 270 million by 2023. –Research Beam

Substrates market is projected to grow at 14% CAGR from $400 million in 2018 to $775 million by 2023.
–Reportlinker

A-Gas Electronic Materials acquired all the assets of Elga Europe of Daventry in Northamptonshire.

Anhui Tongguan Copper Foil completed expansion for an annual output of 15,000 tons of high-precision electronic copper foil.

BASF invested US$25 million in Materialise.

Cabot Microelectronics acquired KMG Chemicals for $1.6 billion.

Fuller China began operation of Asia’s largest copper-clad ceramic substrate production line in Dongtai, China.

GOEPEL electronic appointed Alice Göpel, Managing Director.

Jinan Guoji resumed construction of CCL production lines with annual production capacity of 2.4 million.

Keysight Technologies acquired Thales Calibration Services.

KIC appointed Miles Moreau to Global Manager –Products & Technologies.

Kurtz Ersa began construction to extend production and office areas in Wertheim, Germany.

Mek appointed Jeroen Nagtzaam, Operations & Logistics Manager.

Park Electrochemical
•  appointed Steve Lach, President of Neltec, Business Unit.
•  sold its electronics business to AGC.

Platform Specialty Products changed its name to Element Solutions.

Premier Farnell appointed Rob Rospedzihowski, VP for Sales, EMEA.

Ultra Clean Holdings acquired Quantum Global Technologies.

Ventec International Group
•  named Jason Chung, CEO.
•  passed its ISO 9001:2015 quality management standard audit in Kirchheimbolanden, Germany.

Components

SEMICONDUCTORS
•  Worldwide semiconductors sales increased 20.4% y/y to $118 billion in 2Q’18. –SIA
•  Worldwide semiconductor market is expected to increase 15.7% in 2018 to US$477 billion after 21.6% growth in 2017. –WSTS
•  Semiconductor assembly and testing services market is forecast to expand at 4.7% CAGR through 2027 from US$ 27.7 billion in 2016. –Future Market Insights
•  Semiconductor IP market value is forecast to grow at 7.3% CAGR from $3.4 billion in 2017 to $5.7 billion by 2024 –Allied Market Research
•  Wafer front-end equipment billings are forecast to grow 10% y/y to US$62 billion in 2018.–Information Network
•  Worldwide 200mm fabs are gearing up to grow at 11% rate from more than 600,000 wafers/ month in 2017 to 6 million wafers/ month by the end of 2022 as the number of 200mm wafer fabs increases from 194 in 2017 to 203 by 2022. –SEMI
•  Worldwide silicon wafer area shipments rose 6.1% y/y to 3,160 million square inches in 2Q’18. –SEMI
•  North American semiconductor equipment industry billings increased 8.1% y/y (on 3-month average basis) to $2.5 billion in June 2018.

–SEMI
•  Electronic components market will grow at a 3.3% CAGR from USD 331 billion in 2017 to USD 403 billion by 2023. –MarketResearchReports
•  Radio frequency IC market is expected to reach US$73 billion by 2028 driven by telecom & automotive advancements.–Future Market Insights

SENSORS
•  Medical sensors market value is forecast to expand at 7% CAGR from US$10 billion in 2014 to US$19 billion by 2023. –TMR
•  In-display fingerprint sensor shipments are expected to top 42 million units in 2018. –Sigmaintell

DISPLAYS, PANELS, MONITORS
•  Flat-panel TV shipments rose 7.3% y/y to 107 million units in 1H’18, propelled by decreased panel prices and a lower shipment base.–Sigmaintell Consulting
•  TV shipments are expected to increase 2.3% y/y to 216 million units in 2018. –TrendForce
•  Taiwan small, medium LCD panel shipments increased at 5.2% q/q to 313 million units in 2Q’18.–Digitimes Research
•  Flexible AMOLED panel shipments are expected to grow at of 50% CAGR from 46.5 million units in 2015 to 158 million units in 2018 and 336 million units by 2020. –IHS
•  Micro-LED market will grow from $2.7 billion in revenues in 2019 to $10.7 billion in 2022. –n-tech Research

Memory and Storage

DRAM
•  memory industry grew 11.3% q/q to record high of US$25.6 billion in 2Q’18. –DRAMeXchange
•  market will grow by more than 30% in 2018 to over $100 billion. –IC Insights and International

Business Strategies
•  modules sales revenue grew 69% y/y to USD 11.7 billion in 2017.–TrendForce
•  NAND Flash revenue rose by 3.5% q/q to $16.3 billion in 2Q’18.–DRAMeXchange

OTHER
• Graphene electronics market is projected to witness 37.6% CAGR from US$304 million in 2017 to US$2,060 million by 2023 –ResearchandMarkets

 

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