By Walt Custer, Custer Consulting Group, and Dan Tracy, SEMI
SEMI’s year-to-date worldwide semiconductor equipment billings year-to-date through March show a 59.6 percent gain to the same period last year.
Understanding volatility in the electronic equipment supply chain can be valuable in forecasting future business activity. A useful way to compare relevant electronic industry data series is by using 3/12 growth rates. The 3/12 growth is the ratio of three months of data, compared to the same three months a year earlier.
Chart 1 compares the 3/12 growth rates of four data series:
- World semiconductor equipment shipments (SEMI; www.semi.org)
- Taiwan chip foundry sales (company composite maintained by Custer Consulting Group)
- World semiconductor shipments (SIA, www.semiconductors.org & WSTS, www.wsts.org)
- World electronic equipment sales (composite of 238 global OEMS maintained by Custer Consulting Group).
- Semiconductor capital equipment sales are by far the most volatile of the four series in Chart 1, followed by foundry sales.
- Foundry sales are a good leading indicator for semiconductor equipment shipments ─ leading SEMI equipment by 3-4 months on a 3/12 growth basis.
- Foundry growth peaked in November 2016.
- SEMI equipment growth appears to have peaked in February 2017.
- Semiconductor shipments may have peaked in March 2017. March semiconductor revenues were up 18.5 percent in 1Q’17 vs 1Q’16 and, although still very strong, their rate of growth appears to have plateaued.
Note that 3/12 values greater than 1.0 indicate growth. Declining 3/12 values (but greater than 1.0) indicate growth but at a slower rate. Values below 1.0 indicate contraction.
Based upon Chart 1, semiconductor equipment 3/12 growth will likely reach zero in August or September of this year. Considering the unstable world geopolitical situation, uncertainty clearly exists.
SEMI members can access member-only market data and information at www.semi.org/en/free-market-data-semi-members.
Custer Consulting Group (www.custerconsulting.com) provides market research, business analyses and forecasts for the electronic equipment and solar/photovoltaic supply chains including semiconductors, printed circuit boards & other passive components, photovoltaic cells & modules, EMS, ODM & related assembly activities and materials & process equipment.