Signs of Global Growth in the Third Quarter
(Charts 1-4)
Based on still preliminary (actual plus estimated company financials) data, world electronic equipment shipments were down 1.8 percent in the third quarter versus Q3 2019, but up 15 percent in versus Q2.
The recent downturn appears to have bottomed in the second quarter as growth has resumed (charts 1 & 2). The turnaround is quite obvious in the 3/12 growth curve of global electronic sales (chart 3). Comparing composite regional to company financial sales growth gives similar findings (chart 4).
Source: Company financial reports, Custer estimates and regional data.
Q3 Passive Component Sales Up 15% Year-Over-Year
(Chart 5)
Based on almost complete third-quarter company financial reports, passive component sales were up 15 percent in Q3 versus Q3 2019, and rose 26 percent in the third quarter versus Q2 2020.
Source: Company financial reports and Custer estimates
U.S. EMS sales down 2 percent in 3Q’20 vs Q3
(Chart 6)
The estimated composite sales of seven large U.S. EMS companies were down 2 percent in the third quarter versus Q3 2019, but up 8 percent over Q2 2020.
Source: Company financial reports and Custer estimates.
Q3 Growth in PCB Materials and Equipment
(Charts 7-10)
Based on still-preliminary actual company data, plus Custer estimated data, for Q3 2020 versus Q3 2019:
- PCB process equipment: up 18 percent (chart 7)
- PCB Materials down 8 percent (chart 8)
- Rigid (CCL) Laminate up 3 percent (chart 9)
- 3/12 growth of above from 2003 to present (chart 10)
Source: Company financial reports and Custer estimates.
Third-Quarter Global Electronic Supply Chain Growth by Sector
(Chart 11)
Chart 11 gives our preliminary estimate of Q3 2020 versus Q3 2019 growth, by sector, of the supply chain. These estimates will be updated as more companies release their third-quarter financial reports.
Source: Company financial reports and Custer estimates
Worldwide Smartphone Shipments Reached 348 Million in Q3
Worldwide smartphone shipments reached 348 million units in the third quarter of 2020, down a slight 1 percent on year, but up 22 percent sequentially, according to Canalys.
Source: www.digitimes.com
Expect Global Server Shipments to Drop in Q4
According to a Digitimes Research report, global server shipments are estimated to have slipped 6 percent sequentially in the third quarter and are expected to drop another 12 percent in the fourth quarter, as a result of the coronavirus pandemic disrupting buying patterns.
After the market reached a peak in Q2 2020, Digitimes expects Amazon to be the only datacenter operator seeing shipment growths in Q4 due to its cloud computing datacenter infrastructure expansions and increased procurement of servers for e-commerce.
According to the report, Digitimes Research expects server shipments to drop over 10 percent in the fourth quarter as most datacenter operators and brand vendors have decelerated their order pull-ins due to high inventory levels already built in the second quarter.
In addition, the COVID-19 pandemic has hit Europe and North America especially hard, with datacenter operators delaying server installation and testing there, while local enterprises are also cutting their procurement of servers, according to the report.
Intel, which was originally set to unveil its next-generation Whitley server platform at the end of 2020, is unlikely to begin volume production for the new CPUs until after first-quarter 2021. Server clients have decelerated order pull-in to wait for the transition to be completed with the replacement trend unlikely to take place until the first half of 2021.
Of the top four U.S.-based datacenter operators, Microsoft was the keenest on pulling in orders in the second quarter and saw its shipments pick up over 45 percent sequentially in the quarter. However, with serious double-booking and many of its large-size datacenter construction plans being suspended, Microsoft is expected to have the sharpest shipment decline in the second half of 2020 compared to the first, according to Digitimes Research's latest findings.
Facebook and Google both increased server shipments in the third quarter due to demand from their online multimedia and cloud computing AI platforms. However, the two datacenter operators will slow down the pace of orders pending Intel's transition to a new CPU platform. The two still have inventory needed to be digested. As a result, each of them will see a sequential shipment decline of around 10 percent in the fourth quarter, Digitimes Research reports.
Amazon's key ODM partners – including Foxconn, Quanta Computer and Inventec – are expected to benefit from the server orders and see better-than-expected financial performances in the fourth quarter.
Source: www.digitimes.com
Global Smartphone Shipments Improve in Q3
Global smartphone shipments fell by slightly over 6 percent on year in the third quarter of 2020, improving significantly from the previous two quarters as demand for smartphones outside the China market rebounded, according to Digitimes Research.
Despite the lingering pandemic in many parts of the world and an increase in confirmed cases in the U.S., Europe and Southeast Asia in the third quarter, the job markets and consumer consumption in most of these areas were gradually recovering thanks to the offerings of various relief measures by related governments, according to the report.
Consumers are now more willing to buy new phones, as many people have seen much less spending on travel in the wake of the pandemic, and they are likely to purchase more electronics goods for their own or as year-end holiday gifts.
Digitimes Research's just-published five-year forecast report on global smartphone shipments has revised upward its forecast for global smartphone shipments for 2020 to 1.22 billion units, up from its July estimation of 1.15 billion units, and with the annual decline rate for global smartphone shipments narrowing to 10.4 percent in the year.
Smartphone shipments in China will decline 16.1 percent on year to 308 million units in 2020, while smartphone shipments outside China will slip 8.2 percent to 912 million units.
Global shipments of 5G phones are expected to reach over 260 million units in 2020, accounting for 20 percent of global smartphone shipments.
Looking back to third-quarter 2020, Samsung Electronics managed to take over the market share relinquished by Huawei in Europe and outraced the Chinese vendor to regain the number-one vendor ranking globally.
Huawei saw its shipments plunge by over 25 percent sequentially in the third quarter due to weak consumer demand in China and the impacts of the U.S. trade sanctions.
However, Chinese handset vendors have continued to ramp up their shipments of 5G phones, notably models for the CNY 1,000 (USD$149) segment.
With the availability of 5G iPhone devices, sales of 5G models are expected to account for over 70 percent of total smartphone shipments in China soon, up from over 60 percent currently.
Digitimes Research expects 5G phone shipments to the China market to reach over 160 million units in 2020.
Source: www.digitimes.com
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