Global SMT & Packaging issue 8.9

Title
Walt Custer and Jon Custer-Topai
Decent start in 2008—what
about the next 18 months?
The first half of 2008 was surprisingly strong shipments to Asia were at their all time
for many members of the global electronic record high in June! End markets
food chain. Electronic equipment shipments Now for a dose of reality…. Although • Chinese automobile production will
(Chart 1) rose 10% in 2Q’08, based upon electronic equipment sales were perhaps grow from over seven million units in
the composite financials of 61 large OEMs better than expected in the first half of this 2007 to 10 million units in 2010. —CSM
representing 50% of global end market sales. year, capital spending took a hit. SEMI Worldwide Inc
Inventories (Chart 2) remained ‘in control’ CAPEX is traditionally a ‘roller coaster’ • World’s leading automakers’ combined
throughout the supply base. Although 2008 business. Booms and Busts are the norm. market capitalizations fell 21% Y/Y to
is a slower growth year, fortunately we are Per Chart 7, despite an 8% increase in global 655.7 billion dollars. —Nomura Securi-
not faced with the large inventory overhang chip shipments in 2Q’08, semiconductor ties Co
that amplified the post-2000 recession. capital equipment sales declined 15%. • Worldwide mobile phone shipments
EMS revenues increased 8% in 2Q’08 Looking forward, electronic equipment grew 5.6% Q/Q and 15.3% Y/Y to a to-
vs. 2Q’07 (Chart 3). Though the rate of EMS shipment growth is slowing in most areas tal of 306 million units in 2Q’08. —IDC
growth is slowing, it still was firmly in posi- of the world (Chart 8). Despite SE Asia’s • Impressive second half launches will
tive territory in the first half of 2008. In SE imminent busy season, China/Taiwan’s end help mobile phone markets to a strong
Asia, despite cost increases, unfavorable for- market shipment growth is at its lowest level finish in 2008. —ABI Research
eign exchange and softer consumer demand, since early 2002. +13% growth is still not • Apple’s worldwide notebook shipments
sales are again increasing now that the fall shabby but it pales compared to +37% in grew 61% Y/Y to just over 1.4 million in
busy season is upon us (Chart 4). Expect October 2007. 1Q’08. —DisplaySearch
Taiwan/China electronics revenues to climb What can we expect for late 2008 and • Global server market revenue was $13.3
significantly before peaking in October or 2009? The relatively strong first half of billion in 1Q’08; IBM had 29.4% mar-
November. this year will likely not be repeated in the ket share and HP, 28.3%. —Gartner
Based upon surprisingly strong June near future. 2009 is expected to be a ‘slow • Worldwide PC shipments grew 16% to
chip shipments (Chart 5) it appears that SE growth’ year also as the world deals with 71.9 million units in 2Q’08. —Gartner
Asia was already building semiconductor its economic woes (Chart 9). There are no • Worldwide navigation device shipments
inventories in anticipation of the back-to- disasters visible, but robust growth is now reached 30.7 million units in 2007 and
school and Christmas buying seasons. Chip not expected until 2010. are expected to grow to 68 million units
20080813
20080813
Electronic Equipment Suppliers Inventory/Sales Ratio
Composite of 61 Public Companies
Large Component Distributors, Semiconductor, EMS &
Revenue, Net Income & Inventory
Quarterly Inventory/Sales ($)
OEM Companies
0.85
$ Billion
250 0.80
Semiconductor
Preliminary 2Q'08 results based upon +10%
combination of actual & estimated financials
0.75
EMS
200
OEM
0.70
Distributor
0.65
150
0.60
100
0.55
0.50
Chips
50 0.45
0.40
EMS
0
Distr
0.35
0.30
-50 OEM
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
0.25
00 01 02 03 04 05 06 07 08
0.20
Revenue 137 142146 154 130136 128136 120 123124 136125 131137 154 147155 151170 157162 163 180167 175179 197 181193 201224 202212
Income 10 10 9 5 -3 -24 -15 -2 2 -12 -2 0 5 4 7 10 10 11 11 14 12 12 12 17 13 9 15 18 15 19 17 16 16 15
3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
Inventory 59 61 65 67 68 61 53 48 45 43 42 39 38 39 37 38 40 41 41 41 41 41 42 42 44 46 49 47 47 50 51 51 53 54
00 01 02 03 04 05 06 07 08
CY
Computer 13, Internet 2, Storage 9, Telecom 6, SEMI 14, Medical 4, Instruments 7, Military 6
5 Component Distributor, 18 Semiconductor, 12 EMS and 60 OEM Company Composite
Chart 1. Chart 2.
24 – Global SMT & Packaging – September 2008 www.globalsmt.net
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