Diversification within the semiconductor and electronics industry continues to gain momentum in 2013 as healthier manufacturing data this week underscored the sentiment that economic progress and growth are taking serious hold in North America. As manufacturing continues to expand, particularly in the US where it represents 12% of the US economy, the forecast for continued demand for equipment and industrial electronics is equally strengthened.
Automotive is among the industries continuing to show strength in sales and production, as discussed by attendees of this week's annual meeting of the Center for Automotive Research (CAR) Management Briefing Seminar in Travers City, MI. As automotive and automotive semiconductor professionals have underscored at CAR 2013, meeting the demands of consumers and governments for improved safety and efficiency standards are imperative. The path forward continues to be one of increased semiconductor and electronics content to provide the latest in driver assisted technologies for reduced accidents as well as continuing to improve the fuel efficiency of automobiles and next generation hybrid- and electric vehicles.
Semi outperforms quarterly estimates
Underscoring the broader economic data on manufacturing this week is SIA's quarterly report on semiconductor sales which have outperformed estimates. Quarterly global semiconductor sales are up 1.4% over estimates and 5.2% higher for the Americas. The recent SIA report, based on WSTS data collected as a three-month moving average (3MMA), highlights that positive economic momentum is reaching the semiconductor industry, particularly due to strength in North America:
Worldwide sales of semiconductors reached $74.65 billion during the second quarter of 2013, an increase of 6 percent from the first quarter when sales were $70.45 billion. This marks the largest quarterly increase in three years. Global sales for June 2013 hit $24.88 billion, an increase of 2.1 percent compared to June 2012 and 0.8 percent higher than the May 2013 total. Regionally, sales in the Americas jumped 8.6 percent in Q2 compared to Q1 and 10.6 percent in June 2013 compared to June 2012, marking the region’s largest year-over-year increase of 2013.
Third quarter questions
As we head into the back-to-school purchases, the forecasts continue to favor strong demand for smartphones and tablets, while not as kind for traditional PCs, as iSuppli recently reported. While the second quarter (2Q13) did show an expected slight decline in tablet demand, as reported this week by IDC, down -9.7% quarter-over-quarter from 1Q13, the 45.1 million units shipped still represents a 59.6% increase year-over-year for the second quarter.
Rather than attributing the quarter-over-quarter decline in tablet sales to economic conditions, IDC points to the lack of an iPad product launch from Apple as the likely root for the drop in unit volume sales. With that in mind, the question remains, as we look into September, will new competitive products from the leading smartphone and tablet OEMs provide a release for pent up consumer demand?
The likelihood of continued spending for these smart wireless devices globally continues to hold extremely strong forecasts, particularly as competition has provided a wider array of devices and price ranges to meet all global markets, from developed to emerging and across low- to high-tiered pricing and feature options. However, in terms of a PC refresh cycle, IHS holds that it is both necessary for consumers and enterprise and so a refresh will come, but most likely not in 2013.