Sober outlook . . . not a big surprise
Walt Custer and Jon Custer-Topai
Sober outlook . . . not
a big surprise
Forecasts have recently been slashed for the Chip foundry revenues (a leading indica- • Asia’s CEM market is expected to grow
entire global electronics food chain. GDP tor) ‘tanked’ in September, suggesting that from $121.5 billion (45% of global
growth is now expected to bottom in 2009 a semiconductor shipment decline may not EMS market) in 2006 to $281.8 bil-
(Chart 1) as the USA, Europe and Japan be far behind (Chart 6). lion (55.1% of global EMS market) in
currently border on recession. 2010 is now Printed wiring board shipments 2011.—In-Stat
viewed as the ‘recovery’ year. appeared to be in their normal seasonal • EMS portions of defense, homeland
In 2007 the world produced about upturn through August (Chart 7). However security and aerospace markets are
$1.7 trillion of electronic equipment (Chart our slowing world economy is likely to expected to grow from $2.8 billion in
2). Electronics production growth has mute this year’s ‘PCB busy season’ autumn 2006 to $4.4 billion by 2011. —Technol-
generally slowed throughout 2008 (Chart 3) peak. ogy Forecasters
with Taiwan/China still expanding in low The 2008 (Chart 8) world electronics • Asian television OEMs will outsource
double-digits, Japan and the USA in single food chain will likely see only very modest about 41% of LCD televisions to EMS
digits and Japan in negative territory. Hen- growth in all areas except SEMI CAPEX providers in 2012, up from about 28%
derson Ventures’ October forecast (Chart 4) (which will contract sharply). For 2009 in 2007.—iSuppli
calls for 4.1% global electronic equipment (Chart 9) expect a soft first half with im- • Singapore is losing manufacturing
production growth this year, shrinking to provement later in the year. operations to low-cost regions includ-
only 1.8% in 2009 and then rebounding to ing China, Malaysia, and Vietnam and
7.7% in 2010. Markets is expected to have a -8% CAGR from
Regional semiconductor shipment • Worldwide semiconductor capital 2007 to 2012.—Gartner
growth (Chart 5) provides added insight equipment spending is now projected • Global mobile phone sales are expected
into the current electronic assembly market to decline 26% in 2008 (Chart 10). to reach 1.28 billion units in 2008,
dynamics. The only current, significant • Global contract manufacturing revenue up 11% Y/Y. Asia/Pacific is projected
growth is in SE Asia due to normal pre- is expected to rise from $305.5 billion to grow 17.9% Y/Y to 472.5 million
holiday seasonality. However, monthly in 2007 to $432.3 billion in 2012.— units and N America to grow 5.3%
global chip shipments may soon contract. iSuppli Y/Y to 185.7 million units while Japan
20081012 20071026
GDP Growth
World Electronic Equipment by Type 2007
Constant $ Growth Rates Converted @ Constant Exchange Rates
BUSINESS
51.1
INSTRUMENT
105.9
2006 2007 2008 2009 2010
COMMUNICATION
399.9 INDUSTRIAL
World 4.1 3.9 2.5 1.8 3.6
155.9
3.0%
6.2%
23.5%
9.2%
USA 2.8 2.0 1.6 0.6 2.7 GOV
9.4%
MILITARY
159.9
EU 3.2 2.9 1.0 0.4 2.0 11.8%
Japan 2.4 2.0 0.7 0.6 2.2
CONSUMER
6.6%
30.2%
201.1
Four Tigers 5.0 5.3 4.1 3.4 4.8
AUTO
112
COMPUTER
China 11.4 11.6 9.7 7.0 8.8 512.6
Electronic Outlook 10/08
Henderson Ventures 10/2008
www.hendersonventures.com
$1698 Billion @ 2007 exchange
Chart 1. Chart 2.
24 – Global SMT & Packaging – November 2008
www.globalsmt.net
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