Bottom reached, ‘turning point’ in sight?
Walt Custer and Jon Custer-Topai
Bottom reached, ‘turning
point’ in sight?
The world is clearly in recession. Hender- recessionary end market demand. most recent electronic equipment forecast
son Ventures’ most recent global economic Gartner recently revised its 2009 global by region. 2009 is predicted to be negative
forecast (Chart 1) predicts negative GDP semiconductor forecast (Chart 6) to predict with ‘recovery’ next year. Here’s hoping!
growth in all major regions except China a 24.1% chip shipment decline in 2009 fol-
for 2009. And even for China, anything lowed by a 7.5% rebound in 2010—but not end markets
less than about 8% GDP growth is a ‘reces- reaching 2008 levels again until 2012. Not Worldwide:
sion.’ Recent country industrial produc- surprisingly SEMI equipment purchases • Automotive electronics will grow at
tion growth (Chart 2) is especially sobering. (Chart 7) have plummeted—down 29.6% in a 5-year CAGR of 8.5% fromUS $20
Only China is in positive territory—and not 2008 followed by a 46.5% drop this year. billion in 2008 toUS $22.5 billion in
by much. Surviving as a SEMI capital equipment 2014. —Databeans
Electronic equipment shipment growth vendor in a recession is very challenging to • Cable broadband hardware market
(Chart 3) has dropped into negative terri- say the least. increased 3% toUS $275 million in
tory in all major regions (Taiwan/China Fortunately the first signs of a seasonal 4Q’08. —Infonetics Research
-15%, Japan -22%, Europe -3% and USA turnaround are now occurring. Most • Cellular modem shipments exceeded
-5%). For growth to resume, these 3/12 Taiwan/China electronics sectors (Chart 35 million in 2008. —ABI Research
growth rates must turn upwards and cross 8) saw February sales better than Janu- • Consumer electronics output will
the 1.0 line. This may take much or all of ary with increasing optimism for 2Q’09. drop by 6.4% in 2009. —Henderson
2009. The automotive sector (Chart 4) has This upturn is being driven by China’s Ventures
been hit especially hard. internal stimulus programs coupled with • IT spending to grow by 0.5% Y/Y in
Using SIA semiconductor shipment data normal seasonal patterns and “catch up” of 2009; global hardware markets overall
(Chart 5) as a barometer of electronic as- depleted inventories. spending growth is expected to contract
sembly activity, it is obvious that SE Asia’s The global food chain (electronic equip- 3.6% .—IDC
high volume electronic production has ment, semiconductors and printed circuits) • LED street lamp shipments in 2009 are
been hurt the most. Recovery from the Jan- is still heading south but the low point may estimated to grow 224% to 1.46 mil-
uary 2009 will take time. We are in a deep be in sight (Chart 9). We’ll then need to lion units, with total value rising 99%
hole, but January should have been the low return to 3/12’s of 1.0 to resume growth. to US $816 million. —PIDA
point of the seasonal downturn overlaid on Chart 10 provides Henderson Ventures • Mobile handset display market will
20090312 20090312
GDP Growth
Industrial Production - World
% Change vs. One Year Earlier
Constant $ Growth Rates Converted @ Constant Exchange Rates
2007 2008 2009 2010 2011
World 3.9 1.7 -1.1 2.5 3.8
USA 2.0 1.1 -2.7 2.3 3.6
EU 2.9 0.5 -2.4 0.5 1.7
Japan 2.4 -0.2 -3.8 1.0 2.8
Four Tigers 5.3 2.7 -4.8 4.1 5.1
China 11.6 9.0 5.8 7.5 8.8
Henderson Ventures 3/2009
www.hendersonventures.com
Economist 3/2009
http://www.economist.com Output, prices and jobs
Chart 1. Chart 2.
24 – Global SMT & Packaging – March 2009
www.globalsmt.net
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