01.04.2012 // Posted by: Walt Custer // Posted in: Articles, Industry Conditions

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Global Semiconductor Shipments Down 3.1% in 11’11 vs. 11’10

November semiconductor shipment growth (2011 vs. 2010) was negative in all regions except SE Asia. Europe and Japan saw the largest declines (Chart 1).

After relatively flat global chip shipments for most of 2011 a small seasonal increase was seen in early fall followed by the normal seasonal downturn in November (Chart 2). The 13th world semiconductor business cycle since 1984 is now in negative territory although 3-month (3/12) growth is not plunging sharply like it did in 2009 (Chart 3). Hopefully we’ll have a “soft landing” in early to mid-2012.

On an actual 1-month sales basis (no 3-month average smoothing) all regions saw sequential declines in October and then much greater drops in November (Chart 4). The winter “slow season” is now well upon us.

Semiconductor shipments to N America have been on a “3-month average plateau” since late 2010 but they dropped significantly in November (Chart 5). The N American “chip bubble” of 2010 has now “corrected” and American semiconductor and electronic equipment growth is now “in sync” on a 3/12 basis (Chart 6). SE Asia (Chart 7) is also in balance but Europe (Chart 8) is still adjusting to 2010 excess ordering and inventory building of semiconductors. Japan (Chart 9) continues to decline significantly (semiconductor and electronic equipment shipments).

SEMI capital equipment shipments continue their normal “roller coaster” ride and with their growth plunging much more than chips (Chart 10).

Source: www.sia-online.org

N American PCB Industry Results for November 2011 – IPC

(Chart 11) (Chart 12) (Chart 13) (Chart 14) (Chart 15) (Chart 16) (Chart 17)

Rigid PCB shipments were down 5.9% and bookings were down 7.2% in November 2011 from November 2010. Year to date, rigid PCB shipments decreased 1.7% and bookings declined 9.6%. Compared to the previous month, rigid PCB shipments increased 8.8% and rigid bookings increased 2.8%. The book-to-bill ratio for the North American rigid PCB industry in November 2011 declined to 0.97.

Flexible circuit shipments in November 2011 were down 10.0% and bookings gained 13.6% compared to November 2010. Year to date, flexible circuit shipments decreased 0.7% and bookings increased 2.7%. Compared to the previous month, flexible circuit shipments increased 6.2% and flex bookings were up 14.6%. The N American flexible circuit book-to-bill ratio in November 2011 climbed back up to parity at 1.00.

“North American PCB sales in November increased over the prior month, which is consistent with seasonal patterns,” said Sharon Starr, IPC market research director. “Sales this year continue to lag behind sales in the same months of 2010. Orders are up in the flexible circuit segment but weak in the rigid segment,” she added.

Source: www.ipc.org

Electronic Materials and Process Equipment Quarterly Growth

Custer Consulting Group is expanding its coverage of PCB Process Equipment, CCL (base laminate) and materials revenue growth. In some cases these analyses are made difficult (materials and process equipment companies) because the parent companies may participate in many businesses besides electronics. DuPont and Dow are good examples.

Companies included in each composite are listed on the bottom of the charts. We’ll continue to refine these sector composites and welcome suggestions for publicly traded companies to add. Here are our results to date:

• Process equipment financials for eight companies serving the PCB, flat panel display, touch screen, and photovoltaic industries saw sales up 4% in 3Q’11 vs. 3Q’10 but with a sequential decline in the third quarter and a prorated -28% estimated sales change in 4Q’11 vs. 4Q’10 (Chart 18).

Chart 18


• Rigid and flexible laminate makers (11 company composite) reported 11% sales growth in 3Q’11 vs. 3Q’10. No 4Q’10 guidance was given (Chart 19).

Chart 19


• Electronic materials: An 8-company composite of material suppliers saw sales up 7% in 3Q’11 vs. 3Q’10 with no 4Q’11 guidance (Chart 20). Keep in mind that many huge electronic materials suppliers are not included in this composite because of their diverse product lines.

Chart 20

Source: Company financials and Custer Consulting Group analysis

Global Smartphone Shipments to Top 464 Million Units in 2011

Global smartphone shipments are forecasted to top 464 million units in 2011, with Apple being the top ranking vendor in terms of shipment volume, followed by Samsung Electronics and Nokia. However, Samsung Electronics will overtake Apple in 2012 to be the world's largest vendor by volume, while HTC will be third-ranked unseating Nokia. Rounding out the Top 10 will be: RIM in fifth place, followed by Huawei, Sony, ZTE, LG Electronics and Motorola Mobility.

A Digitimes Special Report analyzes the key trends in this market and provides a detailed forecast of each of the Top 10 vendors in the smartphone market.

Source: www.digitimes.com

Global PCB Shipment Model

Custer Consulting Group’s world printed circuit sales model (based upon the 2010 IPC global market estimate as a base year and monthly regional growth rates) shows all regions except SE Asia in negative growth territory on a 3/12 basis (Chart 21). Converted to monthly shipment dollars, the winter seasonal slowdown is obvious especially for SE Asia (Chart 22).

Globally the model predicts 0% printed circuit shipment growth in 2011 followed by +4% in 2012 (Chart 23). Notice the strong seasonality driven by SE Asian consumer electronics end markets.

Source: Custer Consulting Group

U.S. Composite Leading Indicator Increases in November

The index of U.S. leading indicators climbed in November, a sign that the domestic economy will keep growing in early 2012.

The Conference Board's gauge of the outlook for the next three to six months rose 0.5% after a 0.9% October increase.

Source: Conference Board

HDD Vendors Requiring PC makers to Sign Long-term Supply Contracts

Major hard disk drive (HDD) vendors reportedly have asked branded PC vendors to sign 1-year buying contracts for HDDs at specified prices and volumes as the supply of HDDs has remained tight after the Thailand floods, according to industry sources.

Although HDD vendors as well as makers in the HDD component supply chain have resumed operations recently, the pace of the recovery varies from factory to factory, indicated the sources, adding that it is difficult to say that the worst-case supply scenario is over.

Some PC vendors indicated that they have been buying HDDs on a quarterly basis previously, and are reluctant to sign long-term supply contracts, fearing that HDD prices may drop sharply once the supply chain recovers fully from the impact of the floods.

However, some HDD vendors expect global HDD output to decline 30% sequentially in the fourth quarter of 2011 with the shortfall to continue in the first quarter of 2012.

Shipments of HDDs are expected to reach only 140 million units in the first quarter of 2012 compared to a quarterly shipment of 170-180 million units in previous years (estimated the vendors).

Source: www.digitimes.com