2011 visibility improves
2011 visibility improves
Global growth in most end markets except military
C omments regarding the current
state of world electronics industry include:
• 2010 global recovery was led by SE Asia but all regions participated.
• Semiconductor consumption now exceeds “2008 pre-crash” levels.
• Entire global electronic food chain is still expanding but now at a decelerating rate.
• Te Christmas electronics
“busy season”
consumer has
ended, but winter demand remains unseasonably strong.
• U.S. Military spending is declining. • Prices for precious metals, copper and PCB laminate glass fabric, as well as petrochemical costs in general, are rising significantly.
• Leading indicators point to accelerating growth again in 2Q’11. upon recent industrial
Based production growth rates (Chart 1), the 20110115
world’s key economies were still strong at year end. Global electronic equipment shipments peaked seasonally in September 2010 (Chart 2) and are now in their normal winter downturn. However these shipments were up 20% in 2010 vs. 2009 and rose 13% in December 2010 compared to December 2009. 2010 was definitely a “recovery year” compared to 2009’s recession. Semiconductor shipments (Chart
3) finally peaked in October but 2010’s chip consumption rate closed almost 25% higher than pre-2009 “crash” levels. Printed circuit board shipments, aſter
plunging 20% globally in 2009, rebounded 19% in 2009. Custer Consulting Group expects about 7% world PCB growth in 2011 with monthly shipments tracking normal seasonal patterns (Chart 4). Tis year’s winter “electronics seasonal
slowdown” appears to be subdued. Growth rates for the global PMI (Purchasing Managers Index—a leading indicator), as
Industrial Production - World % Change vs. One Year Earlier
20110115
World Electronic Equipment Monthly Shipments
100 110 120 130 140 150 160 170 180
60 70 80 90
1 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 3 5 7 9111 00
01 Economist 1/2011
http://www.economist.com Output, prices and jobs Source: Custer Consulting Group 02 03 04 05 06 CALENDAR YEAR 07 08 09 10 11 $ Billions
Converted @ Constant 2008 Exchange Rates Thousands
2010/2009 growth +20% Dec 2010/Dec 2009 growth +13%
Dec Dec 155
Walt Custer and Jon Custer-Topai
well as world PCB shipments have already leveled off in “plus single digit” territory. A soſt landing followed by second quarter renewed growth appears likely for 2011. Despite good global growth prospects
for companies serving most end markets, there is a concern for those U.S. electronics companies that are heavily dependent upon military electronics. Te U.S. Department of Defense has significantly cut its projected spending until at least 2015 (Chart 6). Time to diversify! Tanks to our colleague Ed Henderson
Charts 7 & 8 provide his most recent GDP and electronic equipment production growth forecasts by year by region. Chart 9 summarizes the 2011 forecasts.
Expect normal cyclical soſtness in capital equipment (a volatile trailing indicator) and also a weak defense sector. Other than that 2011 looks like a reasonable year!
End markets Worldwide IT spending is expected to grow
105
55
5
20 – Global SMT & Packaging – February 2011
www.globalsmt.net
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