Electronics Industry Outlook August 5, 2020 

Here is my initial, very preliminary estimate of second-quarter world electronic equipment and supply chain revenue growth:Electronic equipment sales declined 9.6 percent globally in Q2 2020 versus Q32 2019 (chart 1)Most electronic equipment sectors contracted (chart 2) with automotive down the most; semiconductor devices and their related capital equipment were more resilientPassive component shipments contracted 6 percent (chart 3)Combined EMS and ODM revenues grew 5.5 percent thanks to ODM strength in Asia (chart 4)Seven large domestically-based EMS companies had a combined 7 percent sales decline in Q2 2020 versus Q2 2019 (chart 5)

Source: Some Signs of Growth in the Industry | Weekly Global Update for August 5, 2020 | TTI, Inc.

Global Electronics Update for July 15, 2020 

Here are some recent global growth estimates by Custer Consulting Group based on our analyses of multiple data sources (as noted):Chart 1 shows our estimate of electronic equipment sales by region through June, based on regional dataChart 2 consolidates the sales in chart 1 to yield monthly total electronic sales; June 2020 was down 4.4 percent versus June 2019 and down 1 percent sequentially versus May 2019World semiconductor and semiconductor capital equipment shipment growth peaked on a 3/12 basis in May (chart 3) as the June global PMI leading indicator points to weaker growth short term (excluding normal seasonality)Chart 4 compares the quarterly global unit shipment of smartphones, personal computers, media tablets and digital cameras; recent mobile phone demand has been negatively impacted by the pandemic and economic recession, but computer and media tablet shipments rose due to “work at home” mandatesWorld PCB shipments are beginning their normal seasonal rebound (chart 5)

Source: Good News in the Computing, PCB Markets | Weekly Global Update for July 15, 2020 | TTI, Inc.

Global EMS Market Reaches $555 Billion in 2019

In 2019, the worldwide contract manufacturing (CM) services market increased nominally — by 2.5 percent in total revenue — resulting in combined EMS and ODM revenue of over $555 billion, an expansion of $13 billion from the previous year, according to New Venture Research. The Worldwide Electronics Manufacturing Services Market – 2020 Edition reports revenue growth from 2014 to 2016 had been essentially flat, but expanded dramatically in 2017 and 2018.

Source: Global EMS Market Reaches $555 Billion in 2019

Global Electronics Outlook: More Positive Signs, but Recovery Timeline Still Uncertain

June “flash” PMIs were just released for select counties (chart 1). With the exception of Japan all PMIs rebounded although many still remained in contraction territory (PMI<50):Markit Economics’ USA PMI rose sharply from 39.8 to 49.6 (chart 2).Eurozone PMI also rebounded from 39.4 to 46.9 – indicating manufacturing contraction but at a slower rate (chart 3); according to Markit Economics (chart 4), “Eurozone economic downturn eased markedly for second successive month in June as lockdowns to prevent spread of COVID-19 were further relaxed. Manufacturing output continued to drop due to declining orders, but June saw continued strong improvement in business expectations for the year ahead. Persistent closure of non-essential business, hotels, restaurants, travel and tourism and other consumer-facing sectors, continued to be widely reported”Germany’s PMI improved to 44.6 indicating slower contraction (chart 5) and France moved back into manufacturing expansion at 52.1 (chart 6)Japan slipped further into contraction (chart 7)

Source: More Positive Signs, but Recovery Timeline Still Uncertain | Weekly Global Update for July 1, 2020 | TTI, Inc.

Global Electronics Update – June 12

The Global Manufacturing Purchasing Managers index rose from 39.6 in April to 42.4 in May (chart 1). While this was an improvement, keep in mind that a PMI <50 is still in contraction territory. The rate of manufacturing decline has slowed but manufacturing activity is far from  true growth (PMI=50).

Source: Challenging 2H 2020 Ahead for Electronics Industry | Weekly Global Update for June 10, 2020 | TTI, Inc.

U.S. lawmakers propose $22.8B in aid to semicon industry 

(Reuters) – A bipartisan group of U.S. lawmakers on Wednesday introduced a bill to provide more than $22.8 billion in aid for semiconductor manufacturers, aiming to spur the construction of chip factories in America amid a strategic technology rivalry with China.

Source: U.S. lawmakers propose $22.8 billion in aid to semiconductor industry – Reuters

Passive Components: Expect a “V-Shaped” Recovery 

The following GDP forecast by world region suggests a tough road ahead for the U.S. and European economies. Asian regions will grow out of the situation at a faster rate than other regions, but the overall outlook for near-term GDP is challenging (see Figure 1).

Source: Passive Components: Expect a “V-Shaped” Recovery | TTI, Inc.

Taiwan Passive Components Makers Report Impressive May Results

Passive components makers have reported significant sales results for May despite the long Labor Day holiday in China cutting work hours, with Yageo’s revenues of NT$4.486 billion (US$149.53 million) for the month rising 1% sequentially and almost 40% on year, according to industry sources.

Source: Taiwan Passive Components Makers Report Impressive May Results – Passive Components Blog

Global semiconductor sales down 1.2% in April 2020

Global semiconductor sales in April 2020 were USD 34.434 billion, up 6.1% versus the same month in 2019, says the European Semiconductor Industry Association (ESIA). Looking at monthly data, sales in April went down 1.2% versus the previous month, as the economic slow-down caused by the COVID-19 pandemic affects the semiconductor market.

Source: Evertiq – Global semiconductor sales down 1.2 percent in April 2020

ECIA Reports Rebounding Electronic Components Sales for June 2020

Atlanta – In its latest survey of ECIA members across the electronics component supply chain, ECIA found renewed optimism for industry sales in June compared to May 2020.  Based on a detailed monthly survey, ECIA has developed a top-level index showing relative estimates for electronic component sales in the current month compared to the prior month and expectations for the coming month compared to the coming month.

Source: 2020 PR ECIA Reports Rebounding Electronic Components Sales Sentiment for June 2020

Global Electronics Update for June 3, 2020

Most companies have now reported their first quarter financials, including all the large ones in our survey: When consolidated in U.S. dollars, world electronic equipment sales of 213 OEMs declined 6.7 percent in Q1 2020 versus Q1 2019 (chart 1) Chart 2 shows electronic sector growth in Q1 2020 versus Q1 2019. Compare these large first quarter 2020 declines to the prior quarter (chart 3)

Source: Growth Expected in Servers, Wearable Devices | Weekly Global Update for June 3, 2020 | TTI, Inc.