Europe Update


  • Although the euro has strengthened slightly in recent months it still is generally at its weakest level vs the US$ since 2003 (Chart 1).
  • European industrial production declined in July based on the most recent Eurostat data (Chart 2).
  • The Eurozone Purchasing Managers Index weakened in August (Chart 3) but still remained in expansion territory (PMI>50).
  • With the exception of Russia and France the countries on Chart 4 are still seeing expanding manufacturing activities however only Germany accelerated its growth in August.

Based on the latest data:


  • Electronic equipment production weakened slightly in July versus June but still remained near a 5-year high (Chart 5). Growth plateaued at about a +5% annual rate but now appears to be easing (Chart 6).
  • Motor vehicle production (Chart 7) was at an all-time high in July and aerospace equipment output (Chart 8) remained strong.
  • Instrument and control equipment production remained robust (Chart 9) and medical electronics continued its fluctuating rebound (Chart 10).
  • Semiconductor shipments to Europe growth is in balance with European electronic equipment growth (Chart 11). Semiconductor shipment growth to Europe is positive when denominated in euros but significantly negative in U.S. dollars (Chart 12).
  • Loaded board (electronic assembly) production generally has weakened since the beginning of 2015 (Chart 13) and wiring device production has dropped sharply in recent months (Chart 14). However the European PMI leading indicator points to growth ahead (Chart 15).
  • Recent printed circuit book/bill ratios are shown for the German speaking countries (Chart 16), France (Chart 17) and the UK (Chart 18).
  • Chart 19 & 20 summarizes the current PCB status in Europe thanks to Michael Gasch.
  • Chart 21 illustrates the historical growth of the European electronic supply chain. We are currently at or near "zero growth."
  • Chart 22 summarizes current supply chain growth on both an annualized (12/12) and 3-month (3/12) basis.

    Sources: Eurostat, SIA & Michael Gasch (

    2Q’15 SEMI Equipment Shipments by Major Country

    SEMI reported that worldwide semiconductor manufacturing equipment billings reached US$9.4 billion in the second quarter of 2015, 1% lower than 1Q’15 and 2% lower than 2Q’14.

    Worldwide semiconductor equipment bookings were $10.2 billion in the second quarter of 2015, 2% higher than the same quarter a year ago and 6% higher than 1Q’15.

    Shipments by major country are given in Chart 23. Chart 24 compares the global 3/12 growth of SEMI equipment to semiconductors.


    Worldwide Wearable Shipments Projected to Grow 22.9% (5-year CAGR) from 76 Million Units in 2015 to 173 Million Units by 2019 (Chart 25)

    A growing list of vendors, a proliferation of devices, experiences, and price points, and steady consumer adoption will fuel growth in the worldwide market for wearable devices. According to IDC wearable device shipments will reach 76.1 million units in 2015, up 163.6% from the 28.9 million units shipped in 2014. By 2019, worldwide shipments will reach 173.4 million units, resulting in a 5-year compound annual growth rate (CAGR) of 22.9%. Total shipments include both basic and smart wearables, which are two very different product categories in many aspects.

    "Smart wearables account for about a third of the total market today while basic wearables, led by fitness trackers, account for the rest," said Jitesh Ubrani, senior research analyst for IDC's Mobile Device Trackers. "Driven by advancements in user interface (UI) and features, smart wearables are on track to surpass the lower priced, less functional basic wearable category in 2018. Smart wearables will quickly move from a smartphone accessory primarily focused on notifications to a more advanced wearable computer capable of doing more processing on its own."

    "Looking ahead, customers will need to pay close attention to the different operating systems that power smart wristwear," added Llamas. "Different smart wristwear operating systems are compatible with certain smartphone operating systems, and sometimes with specific models. Beyond that, experiences and available applications will widely vary. Just as competition exists for different smart wristwear models, this competition carries over into the operating system landscape."

    U.S. Industrial Production Down in August

    U.S. industrial production declined in 0.4% sequentially August 2015 vs. July 2015 but rose 0.9% vs. August 2014. A drop in auto production contributed to the sequential August decline (Chart 26). Chart 27 summarizes world industrial production growth by major country versus the same month in 2014.


    Worldwide Security Appliance Market Shipments grew 10.6% y/y to 567,388 Units in 2Q’15 (Charts 28 & 29)

    According to International Data Corporation (IDC) both factory revenues and unit shipments continued to grow in the first half of 2015. Worldwide vendor revenues increased 9.6% year- over-year to $4.9 billion, and volume shipments expanded to 1.1 million and grew 8.8% year- over-year. For 2Q’15 worldwide vendor revenues increased 12.2% year-over-year to $2.6 billion, marking the 23rd consecutive quarter of revenue growth. Shipments grew 10.6% year-over-year for the seventh consecutive quarter of volume growth ending 2Q’15 at 567,388 units shipped.


    Worldwide Purpose-built Backup Appliance Factory Revenues Declined 8.0% y/y to $726 Million in 2Q’15 (Charts 30 & 31)

    Worldwide purpose-built backup appliance (PBBA) factory revenues declined 8.0% year-over -year to $726.1 million in 2Q’15, according to the International Data Corporation (IDC).Total PBBA open systems factory revenue decreased 9.0% year-over-year in 2Q’15, with revenues totaling $654.4 million while the mainframe market experienced a growth of 1.8% for the same period. Total worldwide PBBA capacity shipped for 2Q’15 was just shy of 694 petabytes, an increase of 18.0% year-over-year.

    "Focus continues to shift away from hardware-centric, on-premise PBBA systems to hybrid/gateway systems. The results are greater emphasis on backup and deduplication software, the ability to tier or push data to the cloud, and the increasing commoditization of hardware, all of which require market participants to adjust product portfolios accordingly."

    "The worldwide PBBA market experienced a year-over-year decline in the second quarter of 2015 as the market continues to evolve," said Liz Conner, Research Manager, Storage Systems. "Focus continues to shift away from hardware-centric, on-premise PBBA systems to hybrid/gateway systems. The results are greater emphasis on backup and deduplication software, the ability to tier or push data to the cloud, and the increasing commoditization of hardware, all of which require market participants to adjust product portfolios accordingly."


    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.

    View other posts from Walt D. Custer. View other posts from Walt D. Custer.
    搜索 MarketEYE
    TTI Insights