Trying to Figure Out 2018
custer and Custer
WALT CUSTER AND JONathan CUSTER
2017 was a good year for the electronics industry worldwide. Global electronic equipment sales grew 7% in 4Q’17 vs. 4Q’18 on a US$ denominated basis (Chart 1). However currency effects amplified this 4Q growth as strengthening foreign currency sales were converted to weaker U.S. dollars.
Chart 2 summarizes the 4Q’17 growth of the world electronic supply chain. Compared to the same quarter a year earlier semiconductor shipments were up 22%, SEMI equipment rose 32%, printed circuit board sales grew 14%, materials and process equipment revenues increased by double digits and all of the electronic equipment end markets (except for office equipment) had healthy gains. As a caution however these growth rates are dollar denominated with local currency sales growth often up at only half these levels (or less).
In the USA, (where exchange rates don’t distort dollar growth rates) electronic equipment fourth quarter sales grew 6.7% (Chart 3) and unbelievably, semiconductor shipments to N. America increased over 40%!
The automotive supply chain was a big driver globally and so were server shipments (Chart 4).
Moving into 2018 there are signs of moderating growth. The global purchasing managers’ index eased in February (Chart 5) with only the USA showing significant PMI growth (Chart 6). Keep in mind that PMI values >50 indicate expansion but the rate of the global expansion appears to be slowing.
Following a booming fourth quarter China/Taiwan sales across the supply chain dropped sharply in February (Chart 7) due a combination of normal post-Christmas seasonality, Lunar New Year vacations, weaker Apple iPhone X production and also some January production “pulled forward from February” in anticipation of the new Year shutdown. Hopefully the sharp February plunge will be followed by a normal spring recovery.
2017 was a great year but 2018 bears watching. Keep an eye on the monthly numbers!
German electronic industry sales increased 7.2% y/y to more than 191 billion Euros in 2017. –ZVEI
sales declined 5.6% y/y to nearly 408 million units in 4Q’17. –Gartner
shipments are forecast to grow at 2.8% CAGR to 1.68 billion units in 2022. –IDC
Computers & Peripherals
Personal computing device market is expected to decline at -1.8% CAGR from 423 million devices in 2017 to 386 million devices in 2022. –IDC
Ethernet switch market increased 3.2% y/y to $25.7 billion in 4Q’17, as router market grew 2.4% y/y to $15.2 billion. –IDC
Server revenue grew 25.7% y/y to $18.6 billion in 4Q’17, while vendor shipments expanded 8.8% y/y to 3.2 million. –Gartner
Switchgear manufacturing market will grow at 6.8% CAGR from $85.4 billion in 2017 to $119 billion by 2022. –BCC Research
Cost of electronics in a car today is currently at Level 3 automation –valued at about 30% of the total cost of a car and is on growth trajectory to be 50% of the total cost by 2030 with Level 5 automation, with semiconductors driving 80% of automotive innovation. –Audi
robot market value will grow at 29% from USD 3.5 billion in 2018 to USD 12 billion by 2023. –MarketsandMarkets
aviation market value is expected to grow at 47% CAGR from USD 152 million in 2018 to USD 2,200 million by 2025. –MarketsandMarkets
defense industry market value is projected grow at 5% CAGR from US $39 billion in 2018 to US $61 billion by 2027. –MarketForecast.com
startups raised a record $15.2 billion in 2017 as Chinese businesses accounted for 48% of the total, up from just 11.6% in 2016. –CB Insights
North American robots sales grew 0.9% y/y to 34,900 total units as dollar value increased 0.1% y/y to $1.940 billion. –The Association for Advancing Automation
Virtual reality market value is growing at 54% CAGR from USD 2
billion in 2016 to USD 27 billion by 2022. –Zion Market Research
Wearables overall shipments were up about 10% in 2017 as Apple, the number one vendor, had 15.3% market share and shipped 17.7 million units. –IDC
Wearable technology market value is expected to grow at 16% CAGR from $19,600 million in 2015 to $57,700 million by 2022. –Allied Market Research
Electronic warfare market value is estimated to expand at 4.6% CAGR from USD 24.2 billion in 2017 to USD 30.3 billion by 2022. –Markets and Markets
EMS, ODM & Related
India’s electronics system design manufacturing ecosystem is forecast to grow from $76 billion in 2013 to $400 billion by 2020. –DeitY
Altek Electronics installed a Smartflow 2020 selective soldering system that was purchased from Kurtz Ersa North America.
ASM Assembly Systems added a Sawyer robot system from Rethink Robotics to its Munich, Germany factory.
Benchmark Electronics expanded its third facility in Penang, Malaysia.
CAMtek purchased Hanwha Precision equipment for their fourth assembly line.
Cirtronics added a fourth Pillarhouse selective soldering system.
Dynamic EMS named Victoria Bonnar, Human Resources Manager.
Dynamic Manufacturing installed a Zenith AOI platform from Koh Young Technology.
Flextron Circuit Assembly added a Nikon XTV-160 3D X-ray imaging system, two Koh Young Technology KY8030-2 full 3D SPI systems and a Nordson YESTECH F1S AOI system.
Fluid Components International installed a BX Benchtop AOI system from Nordson YESTECH.
Hindley Circuits acquired Magnum Electronics.
Newark, New York and Albuquerque, New Mexico facilities were recertified for IPC qualified manufacturers listing.
opened a 150,000 SF manufacturing facility in Newark, New York.
Leoni built a 45,000 SM production plant in Kraljevo, Serbia.
Libra Industries’ Dallas, Texas facility installed an XQuik II with AccuCount Technology from VJ Electronix.
Milwaukee Electronics promoted Rick McClain to President.
Nano Dimension introduced world’s first 3D-printed electronics online service.
Neways Electronics added 1,000 m² of additional production and office area to its Neunkirchen, German production site.
Nortech Systems signed a lease for a new facility to be built in Monterrey, Mexico.
Plexus leased 26,500 SF of space in Louisville, Colorado.
Pro-Active Engineering installed a Smart Dry SD-10 and SD-30 storage, Aqueous Technologies Trident ZDO & Zero Ion-24 cleaning system, Mycronic SMD Tower 6150-15 and Mycronic APM Software Suite.
Reliance Group set up an electronic manufacturing park on 150 acres at Tirupati in Andhra Pradesh.
SMS Canada acquired Anodyne Electronics Manufacturing.
Stadium Group was purchased by TT Electronics.
Wistron acquired land to build new manufacturing site at the Narasapura Industrial Area in Karnataka, India.
Global PCB industry output value grew 11.7% to US$65 billion in 2017 as production value of PCB products from Taiwan-based makers in China and Taiwan reached NT$619 billion (US$21.1 billion).
–Taiwan Printed Circuit Association
Flexible PCB market value will grow at 11.8% CAGR from US$14.5 billion in 2017 to US$38.3 billion by 2026.
–Transparency Market Research
India’s current printed circuit board market capacity is $350 million a year.
–Dr. Hayao Nakahara
A.C.T. (USA) was acquired by Jack Gemmell.
Aspocomp appointed Mitri Mattila as CTO.
CIREXX installed a New Technology Overman hot air solder leveling system.
Coast to Coast Circuits appointed Dan Tozer, Director of Technology.
Enigma Interconnect added panel gold plating with new line, which offers double-sided selective and flash/full body electroplating in hard gold options.
Fineline VAR named Grant Main, Technical Manager.
Fineline-Global appointed Cathi Piper Midwest Regional Sales Manager and Davinder Dhanoa, Canadian Regional Sales Manager.
Flexible Circuits added a second CBT/MLI DI system from Technica.
Flexible Technology appointed Billy Shaw, Operations Manager.
Global Brands Manufacture acquired 70% of Elna for JPY3.5 billion (US$32.7 million).
allocated more than RM 10 million to expand its Bayan Lepas PCB plant.
is planning to build a new PCB production facility near Suzhou, China.
IPC named Chris Mitchell, VP of Global Government Relations.
K&F ELECTRONICS installed a MivaTek LDI.
Key-Tech Electronic Systems added Yamaha Z.Lex high-speed component placement equipment.
Kyoden named Kiyotaka Mori, President.
Rigiflex Technology purchased a CBT/MLI DI machine from Technica.
SCL PCB Solutions Group centralized their UK PCB manufacturing facilities, Spirit Circuits and Lyncolec.
Sanmina closed its Owego, New York PCB plant.
TTM Technologies nominated Rex Geveden to serve on Company’s Board of Directors to replace retired Ronald Iverson.
Materials & Process Equipment
Conformal coating market is estimated to expand from USD 9.7 billion in 2015 to nearly USD 16 billion by 2024.
Dry film market size is expected to grow
at 6.2% CAGR from USD 1,800 million in 2017 to USD 2,800 million in 2024.
–Energias Market Research
Solder market will grow to $5,900 million by the end of 2023. –Market Insights Reports
Electrodeposited copper foils market is forecast to grow at 11.6% CAGR from US$ 6,660 million in 2017 to US$ 16,000 million in 2025. –Persistence Market Research
3M opened a new Innovation Center in Washington, D.C.
AKROMETRIX promoted Neil Hubble to VP of Engineering.
ASS Liuppold Automation, System & Service and SAA-Symtek Automation Asia combined their complete production portfolios into newly formed, ASS-SAA Automation.
Atotech North America hired Andrew Pfeifer as Business Manager, CPT.
Cogiscan hired Greg Benoit as Regional Sales Manager –Americas.
DDM Novastar rehired John Malboeuf as VP of Global Sales.
appointed Jim Fitterling, CEO of new Dow after Andrew Liveris stepped down.
split into three independent companies; Materials Science Division became Dow, Specialty Products division assumed the DuPont name and Corteva Agriscience represents the Agriculture division.
Europlacer Americas named Mike Foster, Director of Business Development.
Insulectro hired Jason Shuppert as Director of Supply Chain.
IPTE Germany appointed Jörg Handke, Manager for Business Unit Systems.
Jadason’s PCB Materials (Dongguan) factory temporarily halted work as a result of a fire.
Juki Automation Systems CEO, Bob Black, stepped down from his position.
Linde LienHwa expanded its production of electronic special gases to meet the growing demand of local customers in the semiconductor and display industries.
joined Nokia-led group to launch “Factory in a Box” concept for agile electronics manufacturing.
President and CEO, Lena Olving plans to leave the company in 2019.
Nordson Corporation’s Corporate VP for Electronics Systems, Joseph Stockunas was appointed to SEMI Foundation Board of Trustees.
Rockwell-Collins engineer, David Hillman was inducted to IPC Hall of Fame.
SEKISUI Chemical added a new film line in Roermond, Netherlands and a new resin line at its plant in Geleen.
Taiyo America appointed Tadahiro Miyoshi, Product Development Manager.
VJ Electronix hired Dan Weitzman as Global Sales Manager.
Yaskawa Electric set up a production, technological service and exhibition center for smart industrial robots at the Central Taiwan Science Park.
sales increased 21.6% y/y to US$412 billion in 2017. –SIA
market will increase 9.5% y/y to $451 billion in 2018. –WSTS
assembly and testing services market value is expected to expand at 4.7% CAGR through 2027 from US$ 27,700 million in 2016.
–Future Market Insights
equipment market is projected to increase 7.4% y/y to $60 billion in 2018. –SEMI
Top 10 semiconductor R&D spenders increased outlays by 6% y/y to $35.9 billion in 2017. –IC Insights
semiconductor distribution sales increased 11.6% y/y to record 2 billion Euros in 4Q’17. –DMASS
semiconductor market sales grew 17.1% y/y to $38.3 billion in 2017. –ESIA/ WSTS
German component distribution sales grew 12% to EUR 845 million in 4Q’17. –FBDi
North American distribution component sales increased 16.1% y/y in 4Q’17. –ECIA
Taiwan IC output is expected to grow 5.8% y/y to NT$2.6 trillion (US$88.4 billion) in 2018. –TSIA
FPGA market is forecast to expand at 9% CAGR from USD 6 billion in 2015 to more than USD 10 billion by 2024. –Hexa Research
GaN semiconductor device market will expand at 4.5% CAGR from USD 16.5 billion in 2016 to USD 22.5 billion by 2023.
–Research N Reports
IC wafer fabs that were closed or repurposed reached 92 between 2009-2017. –IC Insights
Integrated passive device market value is projected to expand at 10.7% CAGR to US$1,650 million by 2025. –Transparency Market Research
Silicon photonics market value is forecast to expand at 20.8% CAGR from USD 775 million in 2018 to 1,990 million USD by 2023.
Displays, Panels, Monitors
4K ultra-high definition technologies market is expected to grow at 20% CAGR from nearly $52.3 billion in 2017 to $133 billion by 2022. –Reportlinker
Large TFT display revenues reached $63.7 billion in 2017. –IHS Markit
Mobile phone displays shipments, including TFT LCD and AMOLED panels, increased 3% y/y to 2 billion units in 2017. –IHS Markit
Smartphone panels’ global demand is expected to increase 12.4% q/q to 410 million units in 2Q’18.
Memory and Storage
DRAM memory industry will increase more than 30% y/y to US$96 billion in 2018.
industry sales increased 14.3% y/y to $15,731 million in 4Q’17.
–Bishop & Associates
material costs increased +12.7% y/y in 2017. –Bishop & Associates
market is expected to grow at 4.9% CAGR to $80 billion by 2023. –Lucintel