Weekly Global Update for September 24, 2014

Japan Update; August SEMI Equipment Results for N. America; 2Q’14 Solar/Photovoltaic Equipment Orders, Shipments & Book/Bill; 2013 Global PCB Production Report; Interesting Semiconductor Market Information; Worldwide Enterprise Client Device Market; Global 2Q’14 PC Monitor Shipments

"Flash" PMI Leading Indicators for September (Chart 1)

Preliminary September PMI leading indicators were released last week.

Comparing September to August China improved slightly (Chart 2), the U.S. was unchanged in a strong growth mode and Japan (Chart 3), Europe (Chart 4) and Germany all declined. France remained in contraction territory but had an improved PMI.

Final September results will be released by Markit Economics for most countries beginning October 1.

Source: www.markiteconomics.com

U.S. August Electronics Orders and Shipments

The U.S. Durable Goods report for August was just released:

• The electronic equipment book/bill improved to 1.05 on a 3-month average basis (Chart 5).
• Electronic equipment bookings remained above shipments as orders improved but shipments weakened (Chart 6). However both order and shipment 3-month growth rates remained positive (Chart 7).
• The ratio of electronic equipment inventories/orders continued to decline (Chart 8).
• Defense capital goods orders continued to drop (Chart 9) as their book/bill dropped to parity (Chart 10).
• Aircraft shipments declined slightly (Chart 11).
• Communication equipment orders strengthened (Chart 12) while computer bookings weakened (Chart 13).

Source: www.census.gov/manufacturing/m3/

South Korean Results

To track South Korean electronics growth we have assembled composite revenues of groups of publicly traded electronic equipment and PCB manufacturers.

• South Korean electronic equipment sales dropped significantly in the first half of 2014 (Chart 14). While South Korea was significantly outgrowing other regions in 2013 this growth plunged in 2014 (Chart 15).
• Printed circuit sales also have declined for South Korean companies (Chart 16) as their 3/12 growth has also plunged (Chart 17).
• This sharp decline in South Korean PCB sales has driven our projected global 2014 PCB growth down to only 0.6% (Chart 18).

Source: Company financial reports analyzed by Custer Consulting Group

North American PCB August Orders and Shipments

IPC just released its August survey results for N. American PCB shipments and orders.

• The 3-month average book to bill was 1.01 but only 0.94 for the month of August alone (Chart 19).
• Although both shipments and orders are growing on a 3/12 basis (Chart 20), orders dropped sequentially in August (Chart 21).

Source: www.ipc.org

North American Robotics Market Posts its Best Quarter Ever, Sets New Record for First Half of 2014 (Chart 22)

Robot sales rise as unemployment rate continues to fall.

Fueled by strong demand from manufacturing companies in all sectors, the North American robotics industry is off to its fastest start ever in 2014, according to the industry trade group Robotic Industries Association.

A record 14,135 robots, valued at $788 million were ordered from North American robotics companies in the first half of 2014, an increase of 30% in units and 16% in revenue over the same period in 2013. The second quarter of 2014 was the main driver of the market’s record first half, with 8,197 robots valued at $450 million sold to North American customers. This performance shattered the previous record for a single quarter, exceeding the fourth quarter of 2012 by 31% in units and 17% in revenue.

Since 2010 the robotics market in North America has grown an average of 26% per year leading up to its record setting first half performance in 2014. At the same time, the unemployment rate in the United States has fallen precipitously over this period.

"In 2010, after one of the worst recessions in our nation’s history, unemployment in the U.S. was nearing 10%," said Jeff Burnstein, President of RIA. "Since then, amidst record years for robot sales, unemployment has steadily fallen toward pre-recessionary levels. The unemployment rate reached 6.1% in June of this year, the lowest it has been since September of 2008."

In addition to falling unemployment, manufacturing jobs are now returning to the U.S. because of automation. "While we often hear that robots are job killers, just the opposite is true," Burnstein added. "Robots save and create jobs."

The automotive industry had the biggest impact on the second quarter’s performance, with 97% more units ordered over the same quarter in 2013. Non-automotive industries such as semiconductors, life sciences, and food & consumer goods, continued to grow by 22% over the first half of 2013, but the strongest growth came in automotive related industries. Robots ordered from automotive OEM and component industries grew by 36% in the first half of 2014.

"While the automotive industry continues to be the largest customer for robotics, it's great to see non-automotive sectors posting strong growth as well," said Alex Shikany, RIA’s Director of Market Analysis. "This is a very positive sign for the long term health of the industry." RIA estimates that some 230,000 robots are now at use in United States factories, placing the U.S. second only to Japan in robot use.

Source: www.robotics.org

World PCB Production Declined Estimated 2.2% in 2013 to $59.4 Billion (Charts 23 & 24)

The world market for PCBs declined an estimated 2.2% in real terms in 2013, although real growth in North America was positive at 0.8%, according to IPC’s World PCB Production Report for the Year 2013. Developed by a team of the world's leading PCB industry analysts, the annual study is the definitive source of PCB production data, indicating what kinds of PCBs are being made where. World PCB production in 2013 was valued at an estimated $59.4 billion.

The data show that the worldwide flexible circuit market grew in 2013, while the rigid PCB market declined. Regional trends are also examined, including China's slowing production growth and Japan's fall from second place in the list of top 10 PCB-producing countries to fourth place. Thailand and Vietnam experienced the highest growth in PCB production.

Sharon Starr, IPC director of market research, explains, "Despite evidence of a small on-shoring trend in North America and Europe, most large companies still produce a substantial share of their PCBs off-shore." The report shows that companies based in Taiwan, Japan and South Korea, for example, are responsible for nearly two-thirds of world PCB production. U.S. companies account for about 10% of world PCB production, although the United States has less than a 5% share of world production within its borders.

World PCB Production Report for the Year 2013 is available from IPC for members for $475; the price for nonmembers is $950. For more information or to purchase the report, visit www.ipc.org/world-pcb-report-2013.

Source: www.ipc.org