CircuiTree - March 2009 - (Page 40) By Walt Custer and Jonathan Custer-Topai Global Update: Sobering But True S IA President George Scalise commented on February 2 regarding the sharp drop in December chip shipments: “Weakening demand for the major drivers of semiconductor sales – including automotive products, personal computers, cell phones, and corporate information technology products – resulted in a sharp drop in industry sales that affected nearly all product lines. Sales of electronic products held up reasonably well during the first nine months of 2008, but fell sharply as turmoil in the global financial industry unfolded. The industry is currently facing an unprecedented period of uncertainty. A resumption of sales growth will depend in part on the effectiveness of various measures now under consideration by the Federal government to restore consumer confidence, improve liquidity, and stimulate economic growth.” December’s semiconductor shipments (a measure of electronic assembly activity) were weak in all regions but SE Asia was hit especially hard (Chart 1). The North American electronics “food chain” is also in decline (Chart 2) however its lower dependence on seasonal Chart 1 Chart 3 (consumer) products and its focus on military, medical, instruments and controls and short run/prototype has allowed N. America to avoid the massive 4Q plunge felt in Taiwan and China. Global electronic equipment revenue growth (Chart 3) moved into negative territory (-6percent) in 4Q08 vs. 4Q07. The fourth quarter of 2008 saw the first world electronic end market decline since 2002. Somewhat surprising, at least through 4Q’08, was that the only significant inventory buildup was by component manufacturers (Chart 4), as OEMs, large EMS companies, and component distributors actually saw their ratios of inventories/sales decline slightly. This inventory situation is much different compared to the “2000 bubble.” Unfortunately as we enter 2009 electronic equipment growth continues to decline in all regions (Chart 5) suggesting that at least the first half of 2009 will be very depressed. Custer Consulting Group’s world PCB shipment model (Chart 6) places current printed circuit sales back to 2003 levels with further declines likely. 2008 world rigid and flex PCB sales were about $48.2 billion, down 7 percent from Chart 2 Chart 4 40 March 2009 • circuitree.com http://www.circuitree.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.