Weekly Global Update for May 1, 2013

World Electronic Equipment Shipments

Electronic equipment "growth" was negative (versus the same period in 2012) for all regions in early 2013 (Chart 1). Converting these 3/12 growth rates to monthly US$ shipments, Taiwan/China had a large drop in February and only partially recovered in March while the other regions by comparison were relatively flat (Chart 2). Combining the regional shipments into a world electronic equipment total (Chart 3) clearly shows the late 2012 and early 2013 slowdown.

USA

• The U.S. electronic equipment book/bill ratio dropped below 1.0 in March (Chart 4) as both orders and shipments remained weak (Chart 5) and order growth plunged (Chart 6).
• The ratio of electronic equipment inventories/orders (Chart 7) remained near a 10-year high.
• Communication (Chart 8) and computer (Chart 9) equipment demand remained weak and defense capital equipment bookings dropped sharply from their December 2012 spike (Chart 10).
• Commercial aircraft shipments were one bright spot (Chart 11).

Asia

• As implied earlier Taiwan-listed OEMs (many with manufacturing in China) saw a sharp February sales decline thanks to a combination of Lunar New Year shutdowns, a contracting Apple supply chain and generally weak global export demand (Chart 12).
• Japan also had a difficult early 2013 (Chart 13) as its domestically-made PCB shipments plunged (Chart 14) and electronic component and device growth remained negative (Chart 15).

Europe (EU27)

• European industrial production improved slightly in February (Chart 16) however electronic equipment shipments dropped (Chart 17) as their annualized (12/12) and 3-month (3/12) growth rates remained in contraction territory (Chart 18).
• Motor vehicle shipments improved very slightly (Chart 19) and aerospace equipment sales continued to rise (Chart 20).
• Instrument and control (Chart 21) and electromedical equipment (Chart 22) sales softened.
• Loaded boards (electronic assembly), components and boards and wiring devices all continued to experience weak demand (Charts 23-25).
• Chart 26 summarizes the annualized (12/12) and 3-month (3/12) growth of the European electronic supply chain. A few categories have not been updated by Eurostat since December.

North American SEMI Equipment Industry had $1.14 Billion in Orders Worldwide in March (Charts 27 & 28)

North America-based manufacturers of semiconductor equipment posted $1.14 billion in orders worldwide in March 2013 and a book-to-bill ratio of 1.14, according to SEMI.

The 3-month average of worldwide bookings in March 2013 was $1.14 billion, 5.9% higher than February 2013 and 21.3% lower than the March 2012.

The 3-month average of worldwide billings in March 2013 was $1.00 billion, 2.8% higher February 2013 and is 22.2% lower than the March 2012.

"Continued improvement in 3-month average bookings for new semiconductor manufacturing equipment is reflected in the March figures, which indicate a 23% improvement over the prior quarter," said Denny McGuirk, president and CEO of SEMI. "While the overall expansion of new manufacturing capacity remains muted, we see continued investment in technology upgrades by the world’s chip makers."

Source: www.semi.org

Worldwide Mobile Phone Market grew 4% Year-over-year in Seasonally Slow 1Q’13 as Smartphones Out-shipped Feature Phones for First Time (Charts 29-31)

According to International Data Corporation (IDC) vendors shipped a total of 418.6 million mobile phones in 1Q’13 compared to 402.4 million units in 1Q’12 and 483.2 million units in 4Q’12.

In the worldwide smartphone market, vendors shipped 216.2 million units in 1Q’13, which marked the first time more than half (51.6%) the total phone shipments in a quarter were smartphones. The market grew 41.6% compared to the 152.7 million units shipped in 1Q’12, but 5.1% lower than the 227.8 million units shipped in 4Q’12.

"Phone users want computers in their pockets. The days where phones are used primarily to make phone calls and send text messages are quickly fading away," said Kevin Restivo, senior research analyst with IDC's Worldwide Quarterly Mobile Phone Tracker. "As a result, the balance of smartphone power has shifted to phone makers that are most dependent on smartphones."

"In addition to smartphones displacing feature phones, the other major trend in the industry is the emergence of Chinese companies among the leading smartphone vendors," noted Ramon Llamas, research manager with IDC's Mobile Phone team. "A year ago, it was common to see previous market leaders Nokia, BlackBerry (then Research In Motion), and HTC among the top five. While those companies have been in various stages of transformation since, Chinese vendors, including Huawei and ZTE as well as Coolpad and Lenovo, have made significant strides to capture new users with their respective Android smartphones."

Source: www.idc.com

Worldwide PC Shipments in 1Q’13 Drop to Lowest Levels since 2Q’09 (Charts 32-35)

• All regions experienced decline in PC shipments in 1Q’13
• EMEA saw sharpest decline in shipments since Gartner records began

Worldwide PC shipments totaled 79.2 million units in the first quarter of 2013, an 11.2% decline from the first quarter of 2012; according to preliminary results by Gartner, Inc. Global PC shipments went below 80 million units for the first time since the second quarter of 2009. All regions showed a decrease in shipments, with the EMEA region experiencing the steepest decline.

"In the first quarter of 2013, it was the fourth consecutive quarter that showed a drop in worldwide PC shipments," said Mikako Kitagawa, principal analyst at Gartner. "Consumers are migrating content consumption from PCs to other connected devices, such as tablets and smartphones. Even emerging markets, where PC penetration is low, are not expected to be a strong growth area for PC vendors.

"Unlike the consumer PC segment, the professional PC market, which accounts for about half of overall PC shipments, has seen growth, driven by continuing PC refreshes. Despite the fact that some regions already passed the peak of PC refresh, overall professional PC demand continued to grow."

HP and Lenovo were in a virtual tie for the top position in the first quarter of 2013. HP had a very challenging quarter, as it recorded its worst shipment decline since the acquisition of Compaq in 2003. HP's consumer business negatively affected its overall shipment volume, but its professional business was also under attack by competitors.

Source: www.gartner.com

U.S. GDP up 2.5% in 1Q’13 (Chart 36)

U.S. gross domestic product expanded at 2.5% annual rate, the Commerce Department reported, after only 0.4% growth in the fourth quarter.

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