South Korean Data added to World Electronic Equipment and PCB Models
Custer Consulting Group has long maintained global electronic equipment and printed circuit board production models based on monthly data from the U.S., Japan, Europe and Taiwan/China. Because of South Korea's recent high PCB and electronic equipment production growth rates (thanks to Samsung) and increasing market share, we are now including this country.
Electronic Equipment Production:
- Based on the monthly sales of 42 Taiwan-listed electronic equipment manufacturers (many with plants in China), Taiwan/China equipment production was relatively flat (2012 versus 2011) (Chart 1). By contrast an admittedly small sample of South Korean electronic equipment companies grew 15% in 2012 versus 2011 and 20% in 2Q'13 compared to 2Q'12 (Chart 2). Samsung was the major driver.
- We have added South Korea's 3/12 growth rates to our global electronic equipment shipment model
(Chart 3). While the other regions on this chart are still experiencing negative electronic equipment
growth (3/12 < 1), S Korea is in the +20% range!
Printed Circuit Board Production
- Using similar methodology, a sample of 42 Taiwan-listed PCB makers (often with China manufacturing) reported flat consolidated sales in 2012 versus 2011 and only 3% growth in August 2013 versus August 2012 (Chart 4). By comparison a composite of 11 South Korean PCB makers saw their sales climb 19% in 2012 versus 2011 and 19.8% in 2Q'13 versus 2Q'12 (Chart 5).
- Chart 6 shows the recent 3/12 growth rate of South Korean PCB production compared to the other regions of the world. Again Korea is in the +20% range while the rest of the world (while recovering) is still near zero growth.
- South Korea produced about 13.4% of the world's PCBs in 2012 (Chart 7). We have revised our 2012 and 2013 world PCB growth estimates upward based on Korea's share and much higher growth rates (Chart 8).
We thank our friend and colleague Dr. Hayao Nakahara for continually critiquing our earlier world PCB growth estimates. Nakahara's comments led us to search for Korean company quarterly sales data and include this information in our models. We still need to add more historical Korean data and also to increase the number of companies, but the initial results are quite "eye opening."
World PCB Market Grew 1.7% to nearly $60 billion in 2012; China's Share of World Production at 42.8% and Japan a Distant Second with 16% (Chart 9)
The world market for PCBs reached nearly $60 billion in 2012, with 1.7% real growth over 2011, according to IPC's World PCB Production Report for the Year 2012.
Published annually, the report contains estimates of 2012 PCB production value by product category and by country, as well as commentary on PCB industry trends in each region and worldwide. It also includes special reports on specialty laminates contributed by Prismark Partners and metal core boards from BPA Consulting. Historical trends and data on PCB production by major PCB-producing countries and regions from 1980 to the present are also included.
"The report's estimates are developed through a consensus process involving leading analysts worldwide and the data is trusted within the industry," says Sharon Starr, IPC director of market research. "If you need to know what kinds of PCBs are being made where, the World PCB Production Report will tell you, in detail."
The report shows Asia with 90% of world PCB production. China's share of world production is now 42.8% and Japan is now a distant second with 16%. South Korea had a great year in 2012, surpassing Taiwan and moving into third place. The United States held onto its fifth place rank with just under a 5% share. Vietnam is the newest addition to the Top-10 list of PCB-producing countries, with just under 1%.
This year's report takes a technology-based approach to estimating PCB production, detailing PCB production in each country of single-sided, double-sided, standard multilayer, high-performance, IC package substrates, flexible circuits and rigid flex. Among the PCB categories covered, rigid flex saw the highest growth in 2012.
High growth was also seen in the market for high density-interconnect (HDI) microvia boards and Asian PCB manufacturers are the main beneficiaries. Ninety-seven percent of HDI/microvia PCB production is done in Asia. Only 1.4% is made in North America. This year's report provides more detail on HDI/microvias than in the past, with data in the standard multilayer and IC package substrate categories both broken down by boards with and without HDI/microvia structures.
The report is available to IPC members for $250; the industry price is $975. For more information or to purchase the World PCB Production Report for the Year 2012, visit www.ipc.org/world-pcb-report-2012. For information on IPC market research programs, visit www.ipc.org/IndustryData or contact Sharon Starr, at +1 847-597-2817 or SharonStarr@ipc.org.
Worldwide Semiconductor Manufacturing Equipment Spending to Decline 8.5% to $34.6 Billion in 2013 (Charts 10 & 11)
Softening in the Premium Mobile Device Market Slowing Growth in the Short Term
Worldwide semiconductor manufacturing equipment spending is projected to total $34.6 billion in 2013, an 8.5% decline from 2012 spending of $37.8 billion, according to Gartner, Inc. Gartner said that capital spending will decrease 6.8% in 2013, due to diminishing 28-nanometer (nm) investment from a softening in the mobile phone market.
"Weak semiconductor market conditions that continued into the first quarter of 2013 generated downward pressure on new equipment purchases," said Dean Freeman, research vice president at Gartner. "However, semiconductor equipment quarterly revenue is beginning to improve, and positive movement in the book-to-bill ratio indicated that spending for equipment will pick up in the remainder of 2013. Looking beyond 2013, we expect that the current economic malaise will have worked its way through the industry, and spending will follow a generally increasing pattern in all sectors throughout the rest of the forecast period."
Logic spending has been the key driver of capital spending in 2013; however, a softening in the mobile phone markets has dampened investment in 28 nm during the third quarter, and this is projected to continue into the fourth quarter of 2013. Memory spending has picked up some of the slack and the total spending in the second half of 2013 should outpace the first half of the year.
Gartner said that capital spending is highly concentrated among a handful of companies. The top three companies (Intel, TSMC and Samsung) account for more than half of 2013 spending. Spending by the top five semiconductor manufacturers exceeds 65% of total 2013 spending, with the top 10 accounting for 76% of the total. 2013 spending will be back-half-loaded, with capacity increases occurring as memory market conditions improve, and Intel prepares for initial 14-nm production late in the year.
"In 2013, the wafer fab equipment (WFE) picture is one of continuous quarter-over-quarter growth as major manufacturers come out of a period of high inventories and a generally weak semiconductor market," said Freeman. "Early in the year, the book-to-bill ratio passed 1-to-1 for the first time in months, signaling that the need for new equipment is strengthening because demand for leading-edge devices is improving."
Gartner predicts that wafer fab manufacturing capacity utilization will hover in the high-70% to low-80% range during the first half of 2013 and building to the mid-80% range at the beginning of 2014. Leading-edge utilization will move into the low-90% range by the end of 2013, providing for a positive capital investment environment.
The capital spending forecast estimates total capital spending from all forms of semiconductor manufacturers, including foundries and back-end assembly and test services companies. This is based on the industry's requirements for new and upgraded facilities to meet the forecast demand for semiconductor production. Capital spending represents the total amount spent by the industry for equipment and new facilities.
The WFE forecast estimates market revenue based on future global sales of the equipment needed to produce the wafers on which semiconductor devices are fabricated. WFE demand is a function of the number of fabs in operation, capacity utilization, their size and their technology profile.
North American Semiconductor Equipment Industry posted $1.06 Billion in Orders Worldwide in August 2013 and a Book/Bill of 0.98 (Charts 12 & 13)
North America-based manufacturers of semiconductor equipment posted $1.06 billion in orders worldwide in August 2013 (3-month average basis) and a book-to-bill ratio of 0.98, according to SEMI.
The 3-month average of worldwide bookings in August 2013 was $1.06 billion, 11.9% lower than July 2013 and 2.7% lower than the August 2012.
The 3-month average of worldwide billings in August 2013 was $1.08 billion, 10.1% lower than July 2013 and 18.7% lower than August 2012.
"The SEMI Book-to-Bill ratio slipped below parity as the 3-month average bookings declined in August," said Denny McGuirk, president and CEO of SEMI. "While some investment activity may be slowing, we see spending by foundries and flash memory suppliers to be key drivers for investments for the remainder of the year and into 2014."
Total PC Monitor Shipments Decreased 0.7% Year-Over-Year to 33.5 Million Units in 2Q'13; Dell Captured Top Position (Chart 14)
Dell moved ahead of Samsung in the worldwide PC monitor market for the first time since 2007, shipping more than 5.0 million units in the second quarter of 2013 (2Q'13). Total PC monitor shipments for the quarter were 33.5 million units, which was 1.6 million units more than forecast but still represented a year-over-year decline of -0.7%, according to the International Data Corporation (IDC).
"Dell grew its unit shipments by 12.7% compared to the first quarter of 2013, which vaulted the company into the number one position worldwide. However, Samsung continues to be the worldwide revenue leader, despite its declining shipment numbers," said Jennifer Song, Research Analyst, Worldwide Trackers at IDC. "On a geographic basis, China remained the largest market for PC monitors with 29.2% share, followed by the U.S. with 18.4% share. The number three market, Brazil, trailed by some distance with 4.3% share."
Looking ahead to the third quarter of 2013, IDC is forecasting 0.7% quarter-over-quarter shipment growth to 33.8 million units. IDC also slightly raised its total shipment forecast for 2013 from 134.4 million units to 134.7 million units, which represents a year-over-year decline of 9.7%. By 2017, worldwide shipments are expected to drop further to 110.8 million units, lower than the previous forecast of 113.6 million units, as the adoption of mobile devices at lower price points is expected to continue.