Circuits Assembly - December 2008 - (Page 16) W TCH A More Storage in Store Trends in the U.S. electronics equipment market (shipments only). % Change July Computers and electronics products Computers Storage devices Other peripheral equipment Nondefense communications equipment Defense communications equipment A/V equipment Semiconductors Components1 Nondefense search and navigation equipment Defense search and navigation equipment Medical, measurement and control rRevised. Market Edited by Chelsey Drysdale Gartner: 2009 Semi Growth Just 1% YTD 0.0 -6.9 -2.8 0.2 -1.3 24.6 -14.4 -8.4 -2.6 0.3 3.3 11.3 Augr -5.6 -4.9 -8.2 1.5 -7.5 -14.2 -7.7 -18.6 -0.9 0.5 1.7 -1.2 Sept* -2.3 -2.2 11.6 1.9 2.2 6.8 2.6 -13.6 -2.2 -1.3 0.8 -2.6 6.0 -2.5 -1.6 -11.2 -3.0 11.1 -3.2 38.9 -1.9 -5.4 -3.6 13.4 STAMFORD, CT – The economic crisis is having a significant impact on the semiconductor industry, as worldwide semiconductor revenue growth in 2009 is expected to be 1%, down approximately seven points from previous estimates, says Gartner Inc. (gartner. com). The research firm lowered its previous 2009 estimate of $307.7 billion, up 7.8% from 2008, to $282 billion, up 1%. Semiconductor revenues grew 5% quarter-over-quarter in the September period, but fourth-quarter guidance continues to drop. Gartner estimates worldwide semiconductor revenue in 2008 will total $279.4 billion, up 2%. *Preliminary. 1Includes semiconductors. Seasonally adjusted. Source: U.S. Department of Commerce Census Bureau, November 4, 2008 Report: Communications Production Halved this Year LOS ALTOS, CA – Although capital investment outlays will slow, the communications equipment industry will survive the economic downturn in reasonable shape, says Henderson Ventures (hendersonventures.com). Worldwide equipment production will slow from a 6.8% rate in 2007 to a 3.2% pace this year, according to the research firm. Growth will drop 2.7% next year before rebounding to 9.6% in 2010. China is expected to achieve a solid 9.6% gain this year. Even so, that pales before the 19.8% burst chalked up during 2007, says Henderson. The company says the diminishing unserved cellphone market coupled with the poor economic environment will likely result in a drop in new subscribers. Unit growth is predicted to drop from 15.1% in 2007 to 7.8% in 2008 and 3.9% next year. October Manufacturing Reaches New Low TEMPE, AZ – The manufacturing sector in October failed to grow for the third consecutive month, says the Institute for Supply Management (ism.ws), while the overall economy concluded 83 consecutive months of growth. The manufacturing PMI dropped to 38.9%, a 26-year low. A reading above 50% indicates expansion. It was the lowest level for the PMI since September 1982, when it registered 38.8%. New orders fell 6.6 points to 32.2%, while production plummeted to 34.1%, down 6.7 points. Export orders contracted for the first time in 71 months. Backlogs dropped to 29.5%, down 5.5 points. “The PMI indicates a significantly faster rate of decline in manufacturing when comparing October to September. It appears manufacturing is experiencing significant demand destruction as a result of recent events, with members indicating challenges associated with the financial crisis, interruptions from the Gulf hurricane, and the lagging impact from higher oil prices,” says ISM spokesperson Norbert J. Ore. “We see inflationary pressures dissolving as the prices index fell to 37%, the lowest since December 2001 when it registered 33.2%.” June PMI New orders Production Inventories Customer inventories Backlogs 50.2 49.6 51.5 51.2 55.0 47.5 July 50.0 45.0 52.9 45.0 47.0 43.0 Aug. 49.9 48.3 52.1 49.3 54.5 43.5 Sept. 43.5 38.8 40.8 43.4 53.5 35.0 Oct. 38.9 32.2 34.1 44.3 55.0 29.5 Down Market Could Boost EMS EL SEGUNDO, CA – EMS and ODM firms will continue to grow, albeit at a slower rate, during the current recession. In fact, research firm iSuppli (isuppli.com) believes a recession may offer opportunities, pointing to the 2001-2003 recession, when a “rubber band effect” stimulated significant revenue growth for EMS/ ODM firms emerging from the downturn. Top ODMs increased their annual sales from $12 billion to $37 billion during 2001-2004, while EMS providers had a CAGR of 11% during the period. Source: Institute for Supply Management, Nov. 3, 2008 Industry Market Snapshot Book-to-bills of various components/equipment. May Semiconductor equipment1 Semiconductors2 Rigid PCBs3 (North America) Flexible PCBs3 (North America) Computers/electronic products4 0.78 4.18% 0.95 1.01 5.07 June 0.81 5.91% 0.94 1.02 5.21 July 0.83 7.11% 0.94 1.01 5.08 Aug. 0.81r 7.02%r 0.95 0.90 5.27r Sept. 0.76p 4.82%p 0.96 0.94 5.34p Metals Index Price Per Lb. Date LME Cash Seller and Settlement for Tin LME Cash Seller and Settlement for Lead Handy and Harman Silver (COMEX Silver) LME Cash Seller and Settlement for Copper 11/12/07 $7.64 $1.58 $215.79 $3.07 8/4/08 $9.84 $0.98 $253.83 $3.67 9/8/08 $8.68 $0.84 $184.48 $3.17 10/6/08 $7.69 $0.76 $160.20 $2.70 11/3/08 $6.35 $0.66 $144.40 $1.80 Sources: 1SEMI, 2SIA (3-month moving average growth), 3IPC , 4Census Bureau, ppreliminary, rrevised 16 Circuits Assembly DECEMBER 2008 circuitsassembly.com http://www.hendersonventures.com http://www.ism.ws http://www.hendersonventures.com http://www.isuppli.com http://www.circuitsassembly.com
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