By Walt Custer, Custer Consulting Group
Business Conditions Strong on Many Fronts
Purchasing Managers Indices rose in August for most key electronics producing countries (Chart 1). Only S. Korea (PMI=49.9) was below the manufacturing expansion line of 50. However, thanks to its current major ramp up in memory chip capacity, South Korea now leads the world in SEMI equipment purchases.
Highest Electronic Equipment Sales Growth since 2011
Based on composite 2Q’17 revenues of 213 global electronic equipment producers, sales rose almost 5 percent in 2Q’17 vs. 2Q16 (Chart 2). Second quarter sales growth by sector of the world electronic supply chain is given in Chart 3.
Autumn Busy Season is Upon Us
The consumer electronics seasonal upturn (including PCs and mobile phones) is in process. Per Chart 4, there is both year/year and seasonal growth underway. August 2017 global electronic equipment sales were up over 6 percent compared to August 2016 and their monthly trajectory is headed up to a normal November peak.
Wafer Foundry Revenues Rebound; Semiconductor Shipments at Record Highs
While it is likely that chip shipment growth is overheated due to higher memory prices and some excess ordering, semiconductor demand is robust and Taiwan foundry sales have rebounded. While there may be some “downward corrections” at year end, the forecast is for healthy demand through autumn.
It looks like a record year on many fronts!
September 19, 2017