Unit shipments of both PCs and smartphones versus a year ago have turned positive. According to IDC, PC shipments in 1Q 2024 were up 1.5% from 1Q 2023, the first positive year-to-year change since 4Q 2021. Smartphone year-to-year growth turned positive in 4Q 2023 at 8.5%. The growth continued in 1Q 2024 at 7.8%. 4Q 2023 was the first positive year-to-year smartphone change since 2Q 2021. Despite the positive trend in 1Q 2024, IDC projects modest year 2024 growth of 2.4% for PCs and 2.8% for smartphones.
Electronics production for most key countries in Asia is on an upward trend. Taiwan electronics production was the strongest, with three-month-average versus a year ago (3/12) change in February 2024 at 19.7%, the strongest growth since November 2022. China electronics returned to double-digit 3/12 increases in January at 11.6% after declines in early 2023. March 3/12 growth was 13.3%. Vietnam electronics production 3/12 change increased 3.0% in March, the sixth consecutive positive month after eight months of declines. Japan and South Korea were the weakest countries. Japan had a 3/12 decline of 1.4% in January, the second consecutive monthly decline following 14 months of increases. South Korea electronics production 3/12 change decreased 4.2% in February after slightly positive growth in December 2023 and January 2024.
Electronics production in the United States and Europe was not as robust as in most of Asia. U.S. 3/12 change was 1.1% in February 2024. Growth has been in the 1.1% to 1.2% range for the last seven months, slowing from 4% to 8% growth in each month of 2022. The 27 countries of the European Union (EU 27) reported 3/12 change in electronics production of minus 7.2% in January, the seventh consecutive monthly decline. The United Kingdom (UK) 3/12 change turned positive at 0.8% in February after five months of declines.
The global economic outlook looks steady for 2024 and 2025 according to a recent forecast from the International Money Fund (IMF). IMF’s April projection has world GDP growth at 3.2% in both 2024 and 2025, the same rate as in 2023. Among the advanced economies, the U.S. is expected to show one of the strongest growth rates in 2024 at 2.7% before moderating to 1.9% in 2025. The Euro area and the UK are below one percent in 2024, accelerating to 1.5% in 2025. Among emerging and developing countries, China is forecast to have growth moderate from 5.2% in 2023 to 4.1% in 2025. Much of the growth in the emerging and developing economies will be driven by India with GDP increasing 6.8% in 2024 and 6.5% in 2025. The countries of the ASEAN-5 (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) are projected to have GDP growth accelerate from 4.1% in 2023 to 4.6% in 2025.
India is replacing China as the key economic growth driver in Asia. Based on IMF data, India was the world’s eleventh largest economy in 2013. India’s GDP grew at a 6.8% compound annual growth rate (CAGR) from 2013 to 2023 to become the fifth largest economy. If India’s growth continues at that rate, it could become the world’s third-largest economy by 2028, behind only the U.S. and China. A recent CNN article explored the drivers of India’s growth as well as its lingering problems with poverty.
While overall electronics growth in 2024 looks encouraging, there are signs of frailness. Although the key drivers of PCs and smartphones are back to growth, annual growth is expected to be low. Electronics production is increasing strongly in Taiwan and China. However, key countries such as South Korea, Japan, the U.S., UK and EU 27 are experiencing slow growth or declines.