TitleDownturn through 2009 (being blunt)
Walt Custer and Jon Custer-Topai
Downturn through 2009
(being blunt)
Writing an uplifting column is tough this vised) new semiconductor forecasts (Chart global semiconductor sales, projecting the
month! Our current world economic ‘train 6) - showing the first decline in global chip first decline since 2001. It forecasts 2008
wreck’ has brought with it substantially shipments since 2001. On an “electronic sales of $261.2 billion, up 2.2% vs. 2007’s
lower consumer and industrial electronics food chain” basis” (Chart 7), global growth sales of $255.6 billion. SIA projects 2009
demand and therefore a seemingly unend- of electronic equipment, PCBs and semi- revenues will decline 5.6% to $246.7 bil-
ing parade of downwardly revised forecasts. conductors were all near zero in Septem- lion before rising 7.4% in 2010 to $264.9
Henderson Ventures November global ber with no ‘bottom’ on the immediate billion and 7.5% in 2011 to $284.7 billion.
GDP forecast (Chart 1) shows 2009 as the horizon. N America-based manufacturers of
‘bottom’ with a modest rebound in 2010. World printed circuit shipments (Chart semiconductor equipment posted $843
Recent monthly industrial production 8), following a ‘bubble’ in late 2007, ‘cor- million in orders in October 2008 and a
growth figures (Chart 2) portray N America rected’ downwards in early 2008 and then book-to-bill ratio of 0.93. “While 3-month
and W Europe already in negative territory resumed seasonal growth this summer. average bookings improved in Octo-
with Asian growth rates generally declining. However PCB demand has now ebbed ber, overall bookings and billings for N
Electronic equipment shipment growth (both seasonally and overall) and a down- American equipment manufacturers are
(Chart 3) slowed to +5% in 3Q’08 with the turn is likely for 2009 (Chart 9). at levels comparable to 2003,” said Stanley
fourth quarter likely to be negative—partly Chart 10 is Henderson Ventures most Myers, president and CEO of SEMI. “Our
due to expected very conservative ‘holiday recent regional electronic equipment industry will have to look to the early part
season’ spending. Global EMS growth growth forecast. Both 2008 and 2009 are of 2009 for clearer signals of market direc-
(Chart 4) will likely follow a similar pattern ‘difficult’ years. See www.hendersonven- tion.”
as ‘4Q guidance’ from those EMS com-
tures.com for more details. Global IPO activity slowed to only 20
panies that provided it was down 6% vs. We apologize for dampening your companies going public in the 3Q’08 (rais-
4Q’07. In the USA electronic equipment ‘Holiday Spirit’ but we can find no legiti- ing $9.3 billion). This was down y/y from
shipment growth had declined to +3% in mate way to put a very positive spin on our $34.8 billion and the recent high of $94.3
September and order growth was already current industry situation. billion in 1Q’08.
negative (-3.7% on a 3/12 basis). Gartner:
On November 18 and 19 the WSTS general market comments
• cut its mobile phone volume
and SIA released their (substantially re- The SIA released its annual forecast of
growth forecast from above 10%
20081109 20081119
GDP Growth
Industrial Production - World
% Change vs. One Year Earlier
Constant $ Growth Rates Converted @ Constant Exchange Rates
2006 2007 2008 2009 2010
World 4.1 3.9 2.7 1.8 3.5
USA 2.8 2.0 1.5 0.3 2.5
EU 3.2 2.9 1.1 -0.2 1.9
Japan 2.4 2.0 0.7 0.5 2.1
Four Tigers 5.0 5.3 3.9 3.1 5.0
China 11.4 11.6 9.7 7.4 8.4
Henderson Ventures 11/2008
www.hendersonventures.com
Economist 11/2008
http://www.economist.com
Chart 1. Chart 2.
30 – Global SMT & Packaging – December 2008
www.globalsmt.net
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