A Good First Half

CUSTER AND CUSTER

The first half of this year was strong for the global electronics industry. Virtually all sectors of the world supply chain enjoyed good growth in 2Q’17 vs. 2Q’16 (Chart 1).


In both the USA (Chart 2) and Europe (Chart 3) second quarter growth was generally positive.


EMS and ODM companies not surprisingly also did well. A broad composite of these companies saw sales up 11% in the second quarter (Chart 4).


Semiconductor shipments have been surging (Chart 5) with strong memory chip demand and price increases driving 2Q’17 global revenues:

Semiconductor Shipments ($B) to Each Region
Year-to-Year Sales 2Q’16 2Q’17
Market avg avg % Change
Americas 4.94 6.59 33.4%
Europe 2.68 3.16 18.3%
Japan 2.52 2.98 18.0%
China 8.29 10.41 25.5%
Asia/Pacific/All Other 7.95 9.5 19.5%
Total 26.38 32.64 23.7%

Printed circuit board growth is much more modest than semiconductors with PCB 2017 global world sales on track for less than a 3% increase compared to last year (Chart 6).


Looking forward we are moving into the annual “busy season” but actual year-on-year growth seems to be ebbing. Keep watching!’

End Markets

WORLD

• IT spending is forecast to grow 2.4% y/y to US$3.5 trillion in 2017. –Gartner

• Electronic systems market will grow by 2% y/y to $1.5 trillion in 2017 while the worldwide semiconductor market is expected to grow by 15% y/y to $419 billion. –IC Insights

MOBILE COMMUNICATIONS

• Smartphone shipments declined 1.3% y/y to 342 million units in 2Q’17. –IDC

• China’s smartphone shipments dropped 1.4% y/y to 230 million units in 1H’17. –Sigmaintell Consulting

• India’s smartphone shipments fell 4% y/y to just under 27 million units in 2Q’17. –Canalys

• Indonesia’s smartphone shipments grew 13% y/y to 7.3 million units in 1Q’17. –IDC

COMPUTERS & PERIPHERALS

• PC shipments fell 4.3% y/y to 61 million units in 2Q’17. –Gartner

• Tablet shipments dropped 3.4% y/y to 38 million units in 2Q’17. –IDC

• Europe, Middle East, and Africa traditional PC market (desktops, notebooks and workstations) shipments declined 0.6% to 15.9 million units in 2Q’17. –IDC

• Memory card market is expected to grow at 0.45% CAGR from $8.8 billion in 2016 to $9 billion by 2021. –Technavio

• SIM card shipments will grow from over 5.4 billion units in 2016 to 5.8 billion units in 2020. –ABI Research

NETWORK EQUIPMENT

• 400G optical transceivers market is forecast to r each $22.6 billion by 2023. –Wintergreen Research

• SD-WAN infrastructure and services revenues will grow at 70% CAGR $8.1 billion in 2021. –IDC

• Asia/Pacific excluding Japan public cloud services market is expected to exceed US$10 billion mark in 2017. –IDC Asia/Pacific

Augmented and virtual reality

• Augmented reality and virtual reality market revenues are forecast to increase at 113% CAGR from $11.4 billion in 2017 to nearly $215 billion 2021. –IDC

INTERNET OF THINGS

• Internet of Things market will reach $5 trillion in market value by 2035 with addition of one trillion IoT devices between 2017 and 2035. –ARM

ROBOTS/AUTOMATION

• Robotics spending, including drones and robotics-related hardware, software and services will increase 18% y/y to $97 billion in 2017. –IDC

• Industrial robotics market is expected to grow at a 9.6% CAGR from $38 billion in 2017 to $72 billion. –ReportsnReports

• Mobile robotics in material handling and logistics will become a $75 billion market by 2027. –IDTechEx

• Packaging robots market is expected to expand at 14.6% CAGR from $2 billion in 2016 to $5 billion by 2024. –Variant Market Research

• China’s industrial robot production increased 34% y/y to 72,400 units in 2016 and grew 52% y/y with an addition of another 35,000 units from January through April 2017. –Forward Business and Intelligence

AUTOMOTIVE

• Automotive power electronics market will grow at 4.5% CAGR from USD 4.3 billion in 2016 to USD 5.5 billion by 2022. –MarketsandMarkets

3D PRINTING

• 3D printing market value is expected to expand at 26% CAGR to USD 33 billion by 2023. –ReportsnReports

• 3D scanner market will grow at 7.8% CAGR from $3.8 billion in 2017 to $5.9 billion in 2023. –ReportsnReports

DEFENSE

• India’s aerospace and defense electronics market is expected to reach around $72 billion in 10 years. –IESA

OTHER

• Power electronics market will grow from $12.9 billion in 2015 to $20.0 billion by 2022. –Research and Markets

EMS, ODM & Related Assembly Activity

Arian EMS opened in Ashington, UK.

Bela Electronic Designs purchased a Nordson YESTECH BX 12 AOI machine.

Benchmark Electronics appointed Bruce Carlson to Board of Directors and named Michael Buseman, Executive VP of Global Operations.

Beyonics consolidated four local facilities into a single vertically integrated headquarters in Singapore.

ControlTek added a Juki high-speed Pick & Place machine, a SMT Jet solder printer, a Koh Young AOI machine and a Heller reflow oven.

Count On Tools installed three MAZAK HQR-150MSY 9-axis Multi-task machining centers and one quick-turn QTU-200MSY 6-axis multi-task machining center.

Creation Technologies’ Vancouver, B.C. Canada manufacturing facility received AS9100 certification.

Digicom Electronics received AS9100:2016 (RevD) aerospace and ISO 9001:2015 certifications.

Ebm-papst added 4,600 m² of production and logistics area to its automotive facilities in Herbolzheim, Germany.

Electronic Systems installed a VERSAFLOW 3/45 selective soldering system in Sioux Falls, South Dakota.

EM Solutions (Mooresville, Indiana) went out of business and equipment was sold at auction.

Logic PD named Eric Wilkowske, VP of Products, Design and Engineering.

Methode Electronics acquired Procoplast.

Plexus increased capacity of its Neenah Design Center by moving to a new office space in downtown Neenah, Wisconsin and opening a new Engineering Solutions Design Center in Guadalajara, Mexico.

Quanta moved robot production lines to a new plant in Linkou District, New Taipei City.

Saline Lectronics promoted Jeff Riedel to Ex. VP of Manufacturing and Continuous Improvements.

Sanmina appointed David Anderson, Executive VP and CFO and Gerry Fay, Executive VP and Chief Business Officer.

Stadium Group inaugurated new HQ for connectivity division in Kista, Sweden.

STI Electronics added a Fischerscope X-ray XDAL 237 energy dispersive X-ray fluorescence system.

Texcel Technology added a new selective soldering machine from Ersa.

Universal Electronics added a 7th SMT Line to its Whitewater, Wisconsin plant, which includes including a DEK wide body printer, Universal Instruments Genesis SMT chip shooter and Yestech AOI system.

Videocon Electronics business COO, CM Singh quit.

Wistron expanded production in India for smaller iPhone assembly.

Zentech Manufacturing appointed Bill Bambarger, CFO.

Zollner added a 12,500 m2 production hall in Zandt, Germany.

PCB Fabrication

Flexible printed circuit boards market is expected to grow 11% CAGR from $13.5 billion in 2016 to $33 billion in 2025 driven by growing demand for IoT. –Transparency Market Research

American Standard Circuits promoted Mohammed Khan to Plant Manager.

APCT

• purchased a Tagarno high-resolution digital microscope.

• received AS9100D certification for Wallingford, Connecticut facility.

Compunetics obtained MIL-PRF-31032 certifications.

EDA Technologies is celebrating 20th anniversary.

Elec & Eltek appointed Kong Tze Wing as an independent non-executive director of the Company.

Firstronic appointed Kurt Rich, Business Development Manager.

Epec Engineered Technologies began offering PCB layout and design services.

IMI added a Miva 2000L LED direct imaging system.

Lab Circuits added a Gen3 System contamination measuring device, Fischerscope X-ray metal thickness gauge XUL-PCB, LEICA DM 2700 M optical microscope and a LPKF ProtoFlow S reflow oven.

Lazer-Tech added an ATG A5 testing machine.

Lenthor Engineering invested in Hakuto’s Mach630NP dry film laminator from Matrix USA.

LG InnoTek plans to start mass-production of flexible printed circuit boards for Apple in 2018.

Merlin Circuit Technology added a Schmoll MDI.

NCAB Group USA promoted Doug Drayer to GM of Central division.

PCB Connect achieved ISO 9001:2015 and ISO 14001:2015 certifications.

PHYTEC added a DragonFly 2020 3D Printer that can produce PCB prototypes 10-15 times faster than traditional method.

Prototron Circuit’s Tucson facility achieved AS 9100 Rev D.

Summit Interconnect Orange added an atg Luther & Maelzer A7a flying probe test equipment in Orange, California.

Thrissur developed low-cost microwave PCBs.

Vanderbilt University constructed simple circuit boards, including conductive traces and capacitors that work above room temperature, but rapidly disintegrate when cooled below 32°C (89°F).

Materials & Process Equipment

MATERIALS

• High temperature sealants market value will grow at 4.6% CAGR from USD 2.7 billion in 2016 to 3.6 billion USD by 2022. –Markets and Markets 

• Photomask market is expected to expand from US$3,320 million in 2015 to US$4,950 million by 2025. –Research and Markets 

• Photoresist market will grow at 5.5% CAGR from USD 3 billion in 2016 to USD 4.2 billion by 2022. –MarketsandMarkets 

• Polyimide films market value will expand at 8.6% CAGR to USD 3.1 billion by 2025. –Grand View Research 

• UV curable resins & formulated products market is projected to grow at 9% CAGR to USD 5.7 billion by 2022. –Research and Markets

Forstar Techno Solutions established an assembly plant for tablet PCs, desktop PCs, smartphones, biometric devices, netbooks and notebooks in Naya Raipur, India.

Foxconn/ Hon Hai

• doubled server output at a plant operated by Hongfujing Precision Electronics (Gui yang) in Guizhou, China.

• is planning on adding an autonomous vehicle R&D facility in Michigan and a flat-screen display assembly plant in Wisconsin.

• and Rockwell Automation implemented IIoT solutions at Foxconn’s consumer electronics assembly operations.

• subsidiary General Interface Solution Holding was added into MSCI global standard indexes.

GE Digital Energy closed its electronics assembly plant in Rochester, New York.

IEC Electronics appointed Michael Osborne to the Board of Directors, replacing Eric Singer.

Incap Group’s President and CEO, Ville Vuori, resigned.

Intervala hired David Link as Quality Manager.

Jabil

• plans to close former Nypro plant in Dothan, Alabama by the end of 2017.

• partnered with eyeSight Technologies to develop next-generation in-car sensing technology.

Kimball Electronics Romania received certifications for TS16949:2009 and ISO9001:2015.

Libra Industries promoted Kim Carlson to Human Resources Manager, Matt Tringhese to Director of Manufacturing and Roy Starks to Director of Program Management.

PROCESS EQUIPMENT

• Artificial intelligence in manufacturing market will grow at 52% CAGR from USD 272 million in 2016 to $4.8 billion by 2023. –Research and Markets

• Automated test equipment market to grow at around 9.2% CAGR to approximately $9.4 billion by 2025. –Research and Markets

• Machine vision market will grow at 9.6% CAGR to $20 billion by 2025. –Research and Markets

• SMT equipment market is expanding at 4.4% CAGR from US$4850 million in 2016 to US$7075 million by 2025. –Transparency Market Research

• X-Ray inspection system market value is forecast to expand at 6.5% CAGR to $860 million by 2023. –Research and Markets

COMPANIES

AIM Solder appointed Lazaro Garza, Regional Sales Manager, Assembly Materials Division.

Alpha Assembly Solutions celebrated its 50th anniversary of the Alpha brand in Italy.

Amerway received ISO 9001 quality certification.

Ascentech has sold more than 100 Gensonic stencil cleaners in North America.

Austin American Technology appointed Todd Rountree, President.

Camtek sold its PCB related business to an affiliate of Principle Capital.

Cogiscan partnered with iBASEt for automated electronics assembly.

Conecsus partnered with Amerway, COBAR Balver Zinn Solder Products to provide ‘cradle to grave’ solution for electronics manufacturers.

Dow Chemical named Pedro Suarez CCO, replacing Joe Harlan, who retired from the company.

eSurface entered bankruptcy proceedings.

Europlacer increased its production floor space by almost 40% at its manufacturing site in Rocheserviere, France.

Fine Line Stencil merged with Metal Etching Technology.

Henkel opened a state-of-the-art test facility for composites in Isogo-ku, Yokohama, Japan.

Isola

• appointed Michael White, Chief Revenue Officer.

• hired investment bank Evercore Partners to restructure its approximately $525 million debt load.

Keysight Technologies named Satish Dhanasekaran, President and Marie Hattar, Chief Marketing Officer.

KIC promoted Carlos Espinoza to Operations Manager and appointed Larry Fey to Principal Electrical Engineer and Ryan Wilshusen to Engineering Manager.

Koh Young Americas hired Brent Fischthal for the newly created position of Sr. Manager for Americas Marketing and Eastern Regional Sales.

Kuka expanded and modernized its HQ in Augsburg, Germany.

MicroCare promoted Luis Rodriguez to Manufacturing Manager.

Mitsui Metal Mining increased manufacturing capacity of electrically deposited copper foil by 20% at its Malaysia Plant to catch up the growing demand of flexible circuits.

Nordson DIMA launched new web site, www.nordsondima.com to promote hot bar soldering and bonding capabilities for electronics industry.

Rogers named Jeff Owens to Board of Directors.

SAKI America appointed Alex Malek as VP Sales & Service, North America.

SEHO Systems name Alexander Blum, Head of Product Management, replacing retired, Reiner Zoch.

Semblant appointed former Henkel Executive Mark Popovich as Chief Strategy Officer.

Showa Chemicals of America in Austin, Texas began selling high-purity gases for electronics.

SMT Thermal Discoveries is celebrating 30-year anniversary.

SMTA elected Bill Capen, DRS Technologies, and Greg Vance, Rockwell Automation, to the Strategic Planning Committee. Debbie Carboni, KYZEN Corporation, was re-elected as VP Expos.

Teledyne Instruments acquired Scientific Systems.

Versum Materials acquired Dynaloy from Eastman Chemical Company.

Vision Engineering opened its Global HQ in Surrey, UK.

Voltera released V-One PCB Printer.

Würth Elektronik and FELA are collaborating on 3D-printing solder mask R&D for miniaturization and digitalization of circuit board technology.

YXLON appointed Keith Bryant Global Director for Electronics Sales.

ZESTRON is celebrating 25 years anniversary.

Components

SEMICONDUCTORS

• Semiconductor sales increased 23.7% y/y to $97.9 billion globally in 2Q’17. –SIA/ WSTS

• Semiconductor revenue is expected to grow 16.8% y/y to $401 billion in 2017. –Gartner

• Semiconductor supply chain sales will double from $2 trillion to $4 trillion over the next five years. –SEMI

• Industrial semiconductor revenues grew by 3.8% y/y to $43.5 billion in 2016. –IHS Markit

• Microprocessor market is growing at 1.5% CAGR from USD 61 billion in 2016 to USD 67 billion by 2022. –Markets and Markets Research

• Server microprocessor market is projected to grow at 2.1% CAGR from $14 billion in 2016 to $16 billion by 2023. –Research and Markets

• IC market is anticipated to increase 16% in 2017; DRAM market is forecast to grow 55% to $64.2 billion in 2017 and the NAND flash market is now expected to rise 35%. –IC Insights

• IC deposition materials market is forecast to increase at ~10% CAGR to $1.2 billion by 2021. –TECHCET

• Power management IC market value is forecast to grow at 5.8% CAGR to US$63 billion by 2025. –Market Research Hub

CAPITAL EQUIPMENT

• Semiconductor new manufacturing equipment sales are projected to increase 20% to total $49 billion in 2017. –SEMI

• Semiconductor capital spending is projected to increase 10% y/y in 2017 to $78 billion. –Gartner

• North American semi equipment industry worldwide billings increased 33% y/y to $2.3 billion in June 2017. –SEMI

WAFERS

• Silicon wafer area shipments increased 10% y/y to 2,978 million square inches during 2Q’17. –SEMI

• Silicon wafer shortage will start in 2018 as silicon wafer area demand is forecast to increase at ~3.1% CAGR to over 13,000 million square inches by 2021. –TECHCET

• Silicon wafers market is expected to grow at of 8.5% CAGR to 500 million USD by 2022. –Market Research Future

• Semiconductor wafer cleaning equipment market will expand at 6.8% CAGR from 2017 to 2025. –Credence Research

RFID

• RFID market will grow from $10.5 billion in 2016 to $11.2 Billion in 2017. –IDTechEx Research

COMPONENTS

• Insulated gate bipolar transistor market is expected to grow at close to 12% CAGR from 4.1 billion to 7 billion in 2021. –Technavio

• MEMS market is projected to expand from $15 billion in 2016 to $35 billion by 2024. –Variant Market Research

North America capacitor sales totaled 34.8 billion units, with a value of $322M in 1Q’17. –Electronic Components Industry Association 

• North American component distribution sales increased 3.3% y/y in 2Q’17. – ECIA 

SENSORS

• 3D sensor market will grow at 18.6% CAGR from US$1.960 billion in 2017 to $4.6 billion by 2022. –Research and Markets 

• CMOS image sensor shipments value are expected to grow from US$10.4 billion in 2016 to US$11.2 billion in 2017 and on to nearly US$13.8 billion by 2020. –Digitimes Research 

• Temperature sensor market will grow at 4.5% CAGR from USD 4.8 billion in 2016 to USD 6.3 billion by 2022. –Zion Market Research 

• Ultrasonic sensor market is expected to grow at 17.7% CAGR from $406 million in 2016 to $1,500 million by 2024. –Variant Market Research 

DISPLAYS, PANELS, MONITORS

• Monitor shipments dropped 7.8% y/y to 29.2 million units in 2Q’17. –Digitimes Research 

• LCD TV panel shipments fell 0.1% y/y to 123 million units in 1H’17. –WitsView 

• Flexible AMOLED display manufacturing capacity is on track to grow at 91% CAGR from 1.5 million SM in 2016 to 20 million SM in 2020. –IHS Markit 

• Advanced materials displays market is projected to grow at 13% CAGR from $68.4 billion in 2017 to $128 billion in 2022. –BCC Research 

• Transparent conductive film for display market will grow at ~8.8% CAGR to USD$ ~5.7 billion by 2023. –Market Research Future 

LED LIGHTING

• LED Lamp shipments are forecast to increase from 961 million in 2017 to nearly two billion in 2026. –Navigant Research 

PRINTED, FLEXIBLE AND ORGANIC ELECTRONICS

• Stretchable and conformal electronics market is expected to grow at 89% CAGR to $480 million by 2025. –Lucintelhhh