2012 CES sets record for exhibitors and attendees
The International Consumer Electronics Show (CES) last week in Las Vegas, Nevada was the largest in history, with over 3,100 exhibitors and over 153,000 attendees – over 20% international. Hopefully this was a good sign of a solid recovery in the electronics and semiconductor industries. The major Japanese and Korean consumer electronics companies had huge display areas: Sony, Samsung, Toshiba, LG, Panasonic and Sharp. Emerging Chinese company Haier also had a large display. A few semiconductor companies put up large booths including Intel, Qualcomm, Broadcom, Marvell and Silicon Image. Several other semiconductor companies had smaller booths or meeting rooms.
At the back of the South Hall were several tiny booths which reminded me of the Texas State Fair – not the food booths where they fry anything that doesn’t move, but the booths with all sorts of gizmos designed to fill needs you did not know you had. One CES booth had electronic gadgets to sooth your various aches and pains. Another booth had models in bikinis (maybe they thought it was a boat show?).
The products on the display floors included newer versions of current devices: large screen LCD and 3D televisions, smartphones, media tablets, ultrabook PCs, digital cameras, etc. Some advanced products which are a year or two away from introduction included glasses-free 3D TVs and TVs with over 4 times the resolution of HDTV. Many interesting products for niche application included a GPS locator for dogs and head mounted video cameras for extreme sports junkies.
The key question is: what devices will drive growth in consumer electronics and semiconductors in 2012? In the opening keynote, Qualcomm CEO Dr. Paul Jacobs said emerging countries will drive growth in smartphones since mobile is the only way to connect to the internet in many countries. CNET’s session proposed the Next Big Thing in consumer electronics will be the ecosystem – getting various devices to work together simply and effectively.
The Consumer Electronics Association – which puts on the CES – projects three categories will drive growth in 2012 (as measured in U.S. dollars). Home IT and Security growth of 5.6% in 2012 will be driven by media tablets, which were the key driver in 2011. In-vehicle Entertainment is the only category expected to show significant growth acceleration in 2012, 11.9% versus 7.4% in 2011, driven by internet radio and streaming audio. Portable communication growth of 14.3% in 2012 will be primarily from smartphones. Overall consumer electronics growth in 2012 is forecast at 3.7%, less than half of the 7.9% growth in 2011.
|
Global Consumer Electronics – High Growth Categories (US$) |
||
|
Source: Consumer Electronics Association |
||
| Category |
2011 growth |
2012 growth |
| Home IT & Security |
18.8% |
5.6% |
| In-vehicle Entertainment |
7.4% |
11.9% |
| Portable Communication |
36.3% |
14.3% |
|
|
|
|
| Total Consumer Electronics |
7.9% |
3.7% |
DIGITIMES Research of Taiwan projects smartphone unit growth of about 40% in 2012 to over 650 million units, following growth around 60% in 2010 and 2011. Media tablet shipments are forecast to grow 60% in 2012 to over 95 million units.
Over 20,000 new products were introduced at CES, a sign that innovation in the industry is alive and well. Many of these products are new and improved versions of existing products. Others represent new product categories which could drive new niche applications or potentially become major products in the next few years. However for 2012, growth will likely be driven by the same products which have driven growth for the last couple of years.
Sign up for our monthly email newsletter
 |
 |
 |
|
||
|
|
||
 |
|
 |
|
||
IC capacity utilization declined in 3Q 2011
SICAS (Semiconductor Industry Capacity Statistics) has released its 3Q 2011 data, available through the SIA at: SICAS data . Beginning with 2Q 2011 the SICAS membership list no longer includes the Taiwanese companies Nanya Technology, Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) or United Microelectronics Corporation (UMC). TSMC and UMC are the two largest foundries, with 2010 revenues of $13.3 billion and $4.0 billion, respectively. Losing these companies has caused a major disruption in SICAS data and makes comparison of the 2Q 2011 and 3Q 2011 data with previous quarters invalid in most categories. However TSMC and UMC release information on wafer capacity in their quarterly financial releases. Adding the reported TSMC and UMC data to the SICAS data results in total IC data which is more comparable to prior quarters.
The chart below shows SICAS data for total IC capacity in thousands of eight-inch equivalent wafers per week. Capacity for TSMC and UMC was added to the SICAS 2Q and 3Q 2011 capacity for comparison with prior quarters. 3Q 2011 IC capacity (including TSMC and UMC) was 2,151 thousand wafers, up 3.2% from 2,084 thousand in 2Q 2011 and the sixth consecutive quarterly increase. IC capacity in 3Q 2011 was still 3% below the record capacity of 2,223 thousand wafers in 3Q 2008.
The trend for MOS IC capacity utilization is shown in the chart below. The SICAS data on capacity utilization for MOS ICs excluding foundry wafers was used through 1Q 2011. This data series is fairly comparable to the 2Q and 3Q 2011 SICAS total MOS IC capacity utilization which does not include TSMC and UMC. For the current cycle, utilization peaked at 95.7% in 2Q 2010 and has been gradually declining since, reaching 91.7% in 3Q 2011. Utilization in 3Q 2011 was still higher than the 90.7% in 1Q 2008 prior to the industry downturn. In general, utilization above 90% is healthy for the IC industry.
What is the outlook for MOS IC capacity utilization in 4Q 2011 and in 2012? This depends on the rate of capacity increase and the level of shipments. Although capacity has increased for 6 consecutive quarters, signs point to a flattening or possible decline. TSMC expects its 4Q 2011 capacity to be flat with 3Q 2011. The chart below shows three-month-average semiconductor manufacturing equipment bookings and billings from SEMI (U.S. & European companies) and SEAJ (Japanese companies). After a sharp falloff, bookings and billings began to recover in the second half of 2009, leading to capacity increases beginning in 2Q 2010. Bookings peaked in August 2010 and billings peaked in May 2011. October bookings were down 39% from the peak and billings were down 21% from the peak. The equipment data indicates capacity growth should slow down significantly in the next few quarters.
Shipments of IC wafers could be flat to down in 4Q 2011,based on WSTS data and recently lowered revenue guidance from Texas Instruments and Intel. Thus even with close to flat capacity growth in 4Q 2011, MOS ICcapacity utilization will like drop from 91.7% in 3Q 2011 to close to 90% in 4Q2011. In 2012, capacity growth will remain slow for at least the first half of the year. Semiconductor market growth in 2012 (and IC wafer shipments) is expected to be stronger than in 2011. The result should be MOS IC capacity utilization remaining above 90% for at least the first two quarters of 2012.
Semiconductor market to grow 3% in 2011, 9% in 2012
The outlook for the global semiconductor market in 2011 has deteriorated from earlier in the year due to multiple factors including slower than expected economic growth in the U.S., debt crises in Europe and the Japan earthquake and tsunami. Recent forecasts have narrowed down to a range of -1.4% to 3.5%. In the first half of 2011, forecasts ranged from 5% to 10%. 2012 growth is expected to improve over 2011, with a range of 3.4% to 10.4%.
WSTS has released data on the semiconductor market through 3Q 2011. Thus year 2011 growth will be determined by growth in 4Q 2011. The mid-points of key company guidance for 4Q 2011 revenue growth vary widely. Microprocessor companies Intel and AMD expect growth of about 3%. Qualcomm’s mid point is 10%. Texas Instruments and STMicroelectronics, which are largely analog, expect declines of 2% and 9%, respectively. The major Japanese semiconductor companies are continuing to bounce back from the March earthquake and tsunami. 3Q11 revenue growth over 2Q11 (in yen) was 21% for Toshiba’s semiconductor business and 17% for Renesas Electronics. Based on revenue forecasts for the fiscal year ending March 2012 and assuming the same growth rates for 4Q11 and 1Q12, Toshiba’s 4Q11 semiconductor revenue growth is estimated at 24% and Renesas is estimated at 4%.
We at Semiconductor Intelligence have developed three scenarios for 4Q11 and year 2011 semiconductor revenue growth which we believe encompass the likely alternatives. As shown in the table below, the lowest case is no growth in 4Q11, leading to 2.3% annual growth. The middle case results in 3% growth in 2011 and the high case results in 3.5% growth. Our official forecast is 3% growth in 2011 and 9% in 2012, one percentage point lower in each year from our August forecast.
Why are our forecasts for 2011 and 2012 semiconductor market growth at the high end compared to other forecasters? The answer is demand for electronics remains healthy despite global economic problems. The chart below shows worldwide unit shipment change versus a year ago based on data from IDC and Strategy Analytics. Mobile phone growth has moderated to 11% to 12% growth in 2Q11 and 3Q11 after a strong recovery from the recession. PC growth has slowed significantly, with a decline in 1Q11 and growth in the 3% to 4% range for the last two quarters. Some of the slowdown in PC growth can be attributed to the rapid rise of media tablets, such as the Apple iPad. For many users, a media tablet is a replacement for a PC. Adding media tablet units and PC units results in higher growth for the combination, in the 14% to 17% range for the last two quarters. Thus growth in mobile phones and in PCs + media tablets has been double digit in 2Q11 and 3Q11, similar to growth rates in the first half of 2008 prior to the global financial crisis.
