Strong Global Growth Thanks to Both Robust Demand & Exchange Rate Effects
CUSTER AND CUSTER
WALT CUSTER AND JONATHAN CUSTER
2017 finished on a positive note – both domestically and globally. Based upon both actual and mid-February estimated 4Q’17 revenues of 213 large global manufacturers, electronic equipment sales rose in excess of 7% in 4Q’17 vs. 4Q’16 (Chart 1). This was the highest global electronic equipment sales growth rate since the third quarter of 2011.
Both robust demand and a weakening dollar contributed to this 7% dollar-denominated 4Q’17 growth increase. When stronger non-dollar sales are converted to weaker U.S. dollars at fluctuating exchange, the dollar denominated growth is amplified by currency exchange effects. If these same sales were instead denominated in euros, there was actual a 1.7% 4Q/17 decline!
We anticipate that dollar based growth will continue to increase in the first quarter of 2018 but perhaps 50% of this global increase will be due to exchange rate effects (weaker dollar, stronger foreign currencies)
Chart 2 shows 4Q’17/4Q’16 growth of the domestic electronic supply chain. U.S. electronic equipment shipments were up 9.1%. Only computer equipment and non-defense aircraft sales declined in the fourth quarter. Because these sales are in dollars there is no exchange rate amplification
Chart 3 gives estimated fourth quarter growth for the world electronic supply chain. Only “business & office equipment” revenues declined in 4Q’17 vs. 4Q’16. The automotive sector was a major driver (Chart 4). Currency exchange amplified these dollar-denominated global growth rates
The global manufacturing PMI leading indicator continued to climb in January (Chart 5). It is solidly in expansion territory (PMI>50) but there are signs that this PMI growth may be slowing following a robust expansion in 2017. However as long as the PMI remains above 50, it will indicate an expanding manufacturing sector.
2017 was a strong year and 2018 is off to a good start! The 2017 lofty growth rates will temper but this current expansion will likely continue. Watch the monthly numbers!
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World IT spending is projected to increase 4.5% y/y to $3.7 trillion in 2018. –Gartner
Global Consumer electronics industry will grow 4% y/y to USD 1 trillion in 2018. –GFU
China’s Chongqing Municipality produced 61 million laptops, 258 million mobile phones and 91 million LCD monitors in 2017. –Government statistics
South Korean electronics industry production volume grew 10.3% y/y to $122 billion in 2017. –Korea Electronics Association
Taiwan’s information and communications technology manufacturing output is expected to grow 4% y/y to NT$6.7 trillion in 2018 as semiconductor companies expand 7% y/y and LCD manufacturing ring drops 1.8%. –IEK
Smartphone market shipments declined less than 1% to 1.472 billion units in 2017 as shipments dropped 6.3% to 404 million units in 4Q’17. –IDC
China’s smartphone shipments fell 4.9% to 444 million units in 2017. –IDC
COMPUTERS & PERIPHERALS
Device shipments (PCs, tablets and mobile phones) will increase 2.1% y/y to 2.32 billion units in 2018. –Gartner
Notebook shipments dropped to 41 million units in 4Q’17. –Digitimes Research
Tablet shipments totaled around 46 million units in 4Q’17. –Digitimes Research
Detachable tablet market grew 10.3% y/y to 6.5 million units in 4Q’17. –IDC
Europe, Middle East, and Africa traditional PC market (desktops, notebooks, and workstations) grew 1.2% y/y to 20.9 million units in 4Q’17. –IDC
ODM TV shipments by the top-15 suppliers increased 18% y/y to 85 million units in 2017. –Sigmaintell
China gaming monitor shipments are forecast to rise from 450,000 units in 2017 to over 1 million units in 2018. –Digitimes
Enterprise spending on cloud infrastructure services grew by 46% to more than $13 billion in 4Q’17. –Synergy Research Group
Public cloud services and infrastructure sending is forecast to increase 23% y/y to $160 billion in 2018. –IDC
Server shipments are forecast to grow 8.5% y/y to 13.7 million units in 2018, driven by 5G, IoT and AI. –Digitimes Research
Server shipments reached 3.7 million units (based on motherboards shipped) in 4Q’17. –Digitimes Research
Automotive video cameras, millimeter wave radars and LiDARs combined global production value is estimated to grow at 35% CAGR to US$22 billion in 2022. –Digitimes Research
INTERNET OF THINGS
Connected IoT devices will reach 31 billion in 2018. –IHS Markit
Internet of Things market is expected to grow at 26.9% CAGR from USD 171 billion in 2017 to USD 56 billion by 2022. –Reportlinker
Internet of Things hardware market will grow from $314 million in 2017 to $1.0 billion by 2022. –Reportlinker
AI enterprise applications’ annual revenue will increase from $3.7 billion in 2017 to $81 billion in 2025. –Reportlinker
Robot density rose reached an average of 74 robot units per 10,000 employees globally in 2017. –Robotic Industries Association
Robotics and drones spending is forecast to increase 22% y/y to $103 billion in 2018. –IDC
Smart manufacturing and smart factory technologies market is expected to reach US$250 billion in 2018, driven by AI, IoT, machine learning and big data. –SEMI
Smart voice assistant devices demand is estimated to soar from 50
EMS, ODM & Related Assembly Activity
Electronic Design Automation industry revenue increased 8% y/y to $2262 million in 3Q’17 as PCB & MCM design tools revenue rose 13.4% y/y to $184 million for 3Q’17. –Electronic System Design Alliance
Celestica acquired Atrenne Integrated Solutions.
Contract Production Ltd installed an AM100 Panasonic Pick and Place line.
Creation Technologies closed its Milpitas, California plant.
Escatec purchased a new factory building in Penang, Malaysia.
Foxconn/ Hon Hai
bought an office building located in downtown Milwaukee.
is planning to invest NT$10 billion (US$342 million) in artificial intelligence (AI) and industrial internet over the next five years.
HansaMatrix opened a sales office in Stockholm, Sweden.
IMI received the AS 9100D/ISO-9001:2015 registration for its Haverhill, Massachusetts facility.
Inventec is setting up an artificial intelligence R&D center in Taiwan, an “industry 4.0” R&D center and a 5G connectivity R&D center in China in 2018.
expanded and relocated its Global Business Center in Penang, Malaysia.
is looking to Automotive, Energy and industrial, Base stations, 5G and smart factories to drive future growth.
is rebuilding its worldwide HQ in St. Petersburg, Florida.
Kinpo Electronics acquired 896 million shares of Cal-Comp Technology (Philippines) for $100 million.
promoted Daniel McMaster to Manager of Program Management at Dallas facility.
Dallas completed its recertification for the AS9100 Rev D SAE International Aerospace Standard.
achieved NIST SP 800-171 compliance.
Mentor facility passed recertification audits for its ISO 9001:2008 and ISO 13485:2012 certifications.
New Kinpo Group is establishing lights-out factories in Thailand and the Philippines.
Norcott Technologies purchased a MV-3 OMNI 3D AOI system from MIRTEC.
allocated more than US$400 million in capital expenditure to expand its production capacity in 2018.
bought a manufacturing facility in New Taipei City, Taiwan from ARRIS.
Plexus purchased a 432,000 SF facility in Penang, Malaysia.
appointed William DeLaney to its Board Of Directors.
closed its PCB plant in Owego, New York and consolidated two of its plants in China.
Velankani Electronics installed Test Research, Inc.’s full SMT inspection solutions and YMS 4.0.
PCB Market value is projected to grow at 5.3% CAGR from USD 8.2 billion in 2017 to 12 billion USD by 2025. –MarketsandMarkets
PCB purchases were about $6 billion in 2017, of which, $1 billion was purchased by Continental AG. –Dr. Hayao Nakahara
Worldwide FPCB market value is expected to rise at 11% CAGR from US$13.5 billion in 2016 to US$33 billion by the end of 2025. –Transparency Market Research
Advantech, Industrial Technology Research Institute, Institute for Information Industry, Digiwin Software, Unimicron Technology, Chin Poon Industrial, Unitech, and Symtek Automation Asia formed a PCB smart manufacturing alliance.
APCT Holdings acquired Cartel Electronics and its affiliate company, Cirtech.
Aspocomp Group received EUR 1.3 million in development support from the European Regional Development Fund for high-tech and capability development.
Cosmotronic discontinued operations.
Fujitsu Electronics Europe entered PCB cooperation with Suntak and Hitek, which enables it to access a total production capacity of 380,000 SM/ month.
ITL CIRCUITS named Charlie Cobb, Regional Manager East Coast.
Merlin Flex, Hartlepool UK, successfully transitioned to AS9100 Rev D.
Tripod is considering investing in a plant in Xiantao, Hubei Province as China’s government tightens wastewater discharge.
TTM Technologies bought Anaren for $775 million.
Wistron invested around $1 billion to relocate a PCB manufacturing plant to Bengaluru, India.
Materials & Process Equipment
Global advanced electronic materials market is forecast to grow at 18.5%, CAGR from nearly $4.9 billion in 2016 to $10 billion in 2021 and $24 billion by 2026. –Reportlinker
AIM Solder promoted Manuel Munguia to Technical Marketing Specialist, Latin America.
ASM Pacific Technology opened its R&D center in Taiwan.
Aurotech opened a cleaning applications laboratory in the Philippines that supports KYZEN customers.
DOWDUPONT hired John Andresakis as Global Growth Leader –Circuit and Industrial Technologies. Congrats John!
Dymax appointed Robert Palmer, Director, Business Development.
Everett Charles Technologies joined GrabCAD.
named Lisa Clark, Inside Sales Assistant Manager; Nicole Palkovic, Inside Sales Supervisor and hired Kellie Tyksinski and Sarah Hornyak as Account Specialists.
• received ISO/TS 16949 management system certificates for two of its manufacturing facilities and HQ.
Juki Automation Systems appointed Greg Lefebvre, Regional Sales Manager for the Americas.
Keysight Technologies named Mark Pierpoint, President, Ixia Solutions Group, and SVP, Keysight Technologies.
MacDermid Performance Solutions and Tanaka Kikinzoku Kogyo discontinued their EEJA JV, which was conducted through Electroplating Engineers of Japan.
MicroCare appointed Jim Gluck, Sr. Procurement Manager and Kevin Marion as Regional Sales Manager from Indiana to Minnesota to Canada.
Panasonic commercialized a series of halogen free circuit board laminate R-5515 with ultra low loss at mili-wave range targeting automobile radars.
Polar Instruments appointed Dorine Gurney, President.
Technic appointed Bruno Kiski, Senior R&D Engineer / Imaging Products.
Ventec International Group began trading on Taipei Stock Exchange under the Stock Code 6672.
Yaskawa added a 5,000 SM building extension in Allerhausen, Germany.
Semiconductor revenue is forecast to grow 7.5% y/y to $451 billion in 2018. –Gartner
Semiconductor industry 4Q’17 sales expanded 22.5% y/y to $114.0 billion, which increased sales 21.6% y/y to $412.2 billion in 2017. –SIA/ WSTS
Samsung Electronics and Apple remained the top two semiconductor chip buyers in 2017, representing 19.5% of the total worldwide market. –Gartner
Semiconductor (integrated circuits and opto-sensor-discretes, or O-S-D, devices) unit shipments are forecast to grow 9% y/y to 1,075.1 billion in 2018. –IC Insights
Silicon wafer area shipments increased 10% y/y to 11,810 million square inches in 2017, while worldwide silicon revenues rose by 21% y/y to $8.71 billion. –SEMI
North America-based semiconductor equipment manufacturers’ worldwide billings increased 27.7% y/y (3-month average basis) to $2.39 billion in December 2017. –SEMI
GaN semiconductor device market is expected to reach USD 4.37 billion by 2025. –Research and Markets
MPU market is forecast to rise 4% to $74.5 billion in 2018. –IC Insight
Power management IC market value is expected to expand at 7.3% CAGR from nearly US$ 20,450 million in 2017 to US$ 41,250 million in 2027. –Future Market Insights
RF GaN market is expected to grow at 23% CAGR from US$380 million in 2017, led by the implementation of 5G networks. –Yole Développement
Wireless charging IC market is expected to grow at 25.2% CAGR from USD 1,810 million in 2016 to USD 8,524 million in 2023. –Energias Market Research
Analog product revenues (including both general purpose and application-specific devices) will increase by 6.6% CAGR from $54.5 billion in 2017 to $74.8 billion in 2022. –IC Insights
Fiber optic components market value will grow at 10% CAGR from USD 17.15 billion in 2018 to USD 27.60 billion by 2023. –MarketsandMarkets
Passive component industry output value is expected to increase 22% from 2017 level to US$28.6 billion in 2020. –Paumanok
DISPLAYS, PANELS, MONITORS
LED packaging market value is expected to grow at 6.2% CAGR to USD 26 billion by 2023. –Research and Markets
AMOLED production capacity is forecast to grow at 48% CAGR from 13 million SM in 2017 to 40 million SM in 2020. –UBI research
OLED market is projected to grow at 15% CAGR from US$21 billion in 2018 to US$41 billion by 2023. –Research and Markets
UV LED market is expected to grow from US$ 178 million in 2016 to US$ 1.3 billion by 2025. –Research and Markets
Mobile phone displays shipments, including TFT LCD and AMOLED panels expanded by 3% y/y to 2 billion units in 2017. –IHS Markit
China-based flat panel makers shipped 9.8 million units of small–and medium-sized OLED panels in 2017. – Sigmaintell
Connector market is expected to grow at 4.9% five-year CAGR to $80 billion by 2023. –Lucintel
PRINTED, FLEXIBLE AND ORGANIC ELECTRONICS
Flexible electronics market is forecast to reach $20 billion by 2022. – SEMI
Infrared sensor market is forecast to grow at 13% CAGR from USD 271 million in 2016 to USD 632 million by 2023. –Energias Market Research