China

The current world news is awash with stories about this current economic downturn including speculations about its probable depth and duration. Questions loom regarding what it will take to restart the world economies and how to accomplish this restart effectively.

Global fab equipment spending promises to crawl out of a gloomy 2019 and see a modest recovery this year before a sharp uptick drives record investments in 2021 in a vivid display of the decades-old cyclicality playing out in the semiconductor industry.

Compared to the first half of 2019, the second half smacks of a recovery, with fab equipment spending revised upward to show a stronger 2019 overall in the latest update of the World Fab Forecast report, published by SEMI.

What will the New Year bring? Purchasing Managers Indices (PMIs) are a good leading indicator of present and near-term manufacturing activity by country.

The global electronics industry normally experiences a seasonal upturn from mid-summer through the December holidays. However, this autumn’s upturn is less robust.

The recent anti-globalization political rhetoric raises a number of challenges for the semiconductor supply chain. Throughout the ongoing US-China trade war, and now the dispute between South Korea and Japan, most attention has focused on the consequences for players at the top of the supply chain.

The photomask market has seen exceptional growth of 13% and 8% in 2017 and 2018, respectively. The upsurge is striking given that, in the early to mid-2000s, the photomask market averaged less than 4 percent annual growth. And the gap between the past two years and the previous ten is remarkable.

For the semiconductor industry, 2018 was nothing if not incredible. Chip revenue shot up to $469 billion, trouncing the record-setting $412 billion reached in 2017 to reach a new high. Both semiconductor equipment and materials hit record revenues of $65 billion and $52 billion, respectively.

Electronic equipment growth definitely slowed in late 2018. Based on the consolidated revenues of 213 large, global OEMs electronic equipment sales grew only 2.1 percent in 4Q’18 vs. 4Q’17, down from 4.9 percent in the third quarter and 10 percent in the second quarter.

Custer Consulting Group has its first estimate of global electronic equipment growth in 4Q’18 vs. 4Q’17.