November Semiconductor Shipments

SIA just released November semiconductor shipments:

  • On a three month average basis global shipments were up 9.1% in Sep-Nov 2014 vs. September-November 2013 with all regions except Japan in positive growth territory (Chart 1).
  • World shipments plateaued on a three month average basis but have declined sequentially from September’s record high on a one month basis (Chart 2). This October-November sequential decline was likely normal seasonality. Comparing November 2014 to November 2013 (1-month basis) shipments rose 8.5%.
  • Growth of the current semiconductor business cycle appears to have peaked (Chart 3).
  • Custer Consulting Group’s semiconductor leading indicator points to slower global growth in the coming months (Chart 4).
  • In November all regions (Except Asia/Pacific) were already experiencing slower 3/12 growth (Chart 5). 1-Month November shipments (Chart 6) dipped sequentially in North America, Europe and Japan but were flat sequentially from October in Asia/Pacific.
  • Asia/Pacific’s global semiconductor consumption share rose to 57.8% of the world total in November (Chart 7) suggesting that it performs about that percent of the world’s electronic assembly.


December PMI Leading Indicators

Markit Economics and ISM (Institute for Supply Management) have just released their December Purchasing Managers (PMI) Indices:

  • Global manufacturing remained in a growth mode in December (PMI>50) but the rate of growth continues to decline from its February 2014 peak (Chart 8).
  • U.S. manufacturing growth is still strong but it has weakened from its October 2014 peak (Chart 9).
  • Regionally the U.S. PMI still well exceeds that of other key manufacturing countries (Chart 9).
  • Europe’s PMI improved slightly in December – with a stronger performance in Germany offsetting declines in many other European countries (Chart 10).
  • Asian performance was mixed with India, Vietnam and South Korea improving, Japan unchanged from November and China and Taiwan weakening in their PMIs (Chart 11).

LCD TV Shipment Forecast Revised Upward on Strong Consumer Demand for Larger Sizes (Chart 12)

After a year of weak growth for the LCD TV industry in 2013, worldwide shipment growth has accelerated every quarter in 2014, with total units rising more than 10% in Q3’14. The latest Quarterly Global TV Shipment and Forecast Report from DisplaySearch, now part of IHS Inc., has raised the global forecast for 2014 LCD TV shipments to 223 million units, up 7% Y/Y on a unit basis and up 16% Y/Y on an area basis. The LCD TV shipment outlook for 2015 was also increased to 239 million units, as recent growth trends appear to be sustainable.

"LCD TV shipments from manufacturers to retailers in the third quarter were stronger than expected in several regions, but especially in North America and Asia-Pacific," said Paul Gagnon, director of TV research for DisplaySearch. "Growth in these regions is driven by a new wave of replacement activity. North American consumers are replacing older flat-panel TVs, and consumers in India and other Asia-Pacific countries are replacing CRT TVs."

Consumers continue to trade up to larger screen sizes, increasing the average size of LCD TV shipments 5% to 39″, which is more than 1.5" larger than last year. This increase in average size, combined with stronger unit growth, is fueling renewed investment in LCD panel production capacity. Larger sizes have also contributed to revenue growth and have helped to stabilize overall industry prices, on a volume-weighted basis. The shift to larger sizes has resulted in strong demand for 4K LCD TVs, which are expected to grow more than 50%, reaching more than 32 million units in 2015.

LCD TV shipments to retailers in North America increased nearly 24% Y/Y in Q3’14; however, year-to-date growth has so far significantly outpaced sales to consumers. "Very strong growth in North America in recent quarters warrants careful observation, in case an inventory glut materializes due to overzealous buying and selling at the manufacturer to retailer level," Gagnon said. "A strong holiday season is needed to avoid an inventory hangover in early 2015."


Walt D. Custer

Walt Custer

Walt Custer is an industry analyst focused on the global electronics industry. Prior to forming Custer Consulting Group he was Vice President of Marketing and Sales for Morton Electronic Materials, a global supplier of specialty chemicals and process equipment for the PCB industry.

Custer has been a member of the IPC trade organization since 1975 where he received both the President's and the Raymond E. Pritchard Hall of Fame Awards. He is currently a member of the IPC Executive Market & Technology Steering Committee. Custer is also a Director of the EIPC European PCB trade organization.

He authors regular “Market Outlook” columns for Global SMT & Packaging magazine, the Journal of the HKPCA and the TTI MarketEYE website.

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