MarketWatch Commentary

MarketWatch Commentary is an open forum dedicated to the interactive discussion of news and events affecting the global electronics industry. The views and opinions presented in the MW Blog are solely those of the participants and do not necessarily reflect a position held by Smith & Associates.

Solar

Positive EMS Forecast: Three-years of solid growth & new strategies

Posted by: Lisa Ann Cairns, Ph.D. in Supply Chain, Solar, Outsourcing, ODM, Mergers & Acquisitions, Market Trends, Localization, EMS, Consolidation, CM on Jan 29, 2010

The good news: Three years to full rebound. 2010-2013, is the general consensus forecast for the EMS industry globally to fully recover to pre-recession levels. Conservative growth is forecasted in the 5% range and the majority of analysts (including SIA, KPMG, iSuppli, and Gartner) and economists forecast more bullish numbers in the low double digit percents, annually for those next three years (as reported in Manufacturing Market Insider (MMI) (Vol. 20:1, January 2010, and Vol. 19:11, November 2009) and citing forecasts from InForum, SIA, IDC, and Electronic Trend Publication).

EMS companies have been faring well, relatively speaking, and the strategic moves to diversify into new markets with important core capability links has analysts and market researchers generally more bullish than conservative.

What is particularly interesting, as we continue to watch the ongoing EMS-ODM turf war (cf. MarketWatch Quarterly Vol. 1:1, "EMS/ODM a Mixed Market;" and Vol. 2:2, "Co-Evolution and Organic Growth"), is the varied strategies EMS companies are embracing. As well presented in the latest MMI (Vol. 20:1, pp. 1-4) report, some EMS companies are following a new, retail path (e.g., Hon Hai's retail outlets); some are expanding to sister industries (e.g., Jabil's venture into solar panels and medical disposables); some are supporting new supply chains for the still fragmented clean/smart technologies (cf. the latest MarketWatch Quarterly Vol. 3:4, now available to subscribers and next week to the public); and some are engaging in more traditional M&A deals to expand their market reach and capabilities (e.g., Celestica's acquisition of Invec Solutions, as reported in MMI Vol. 20:1, pp. 2, 7).

Among the other trends forecasted by market analysts, we should see a resumption of more normal consolidation numbers for small- to mid-sized companies, renewed momentum for regionalization/localization (cf. MarketWatch Quarterly Vol. 2:3, "An Expanding European Microcosm" for more discussions on localization), and continued distinctions between EMS and ODM businesses but with increased "credibility to a hybrid strategy" (MMI Vol. 20:1, p.4).

The next one to three years hold promise for the EMS sector, and based on early analysts' reports for 2010, the new market opportunities may provide important growth for EMS in directions beyond the past 'turf wars' with ODMs.

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SEMICON: A look to survival, new growth and new tech leaders

Posted by: Lisa Ann Cairns, Ph.D. in Solar, MEMS, Market Trends, General Commentary on Jul 8, 2009

There are many changes that will come painfully to life next week in San Francisco and in September in Taiwan with the SEMICON shows. As with just about everything, the macro-economy may throw a wet blanket on some aspects of the shows. But, importantly, not all.

A newer technology that is poised to be a show stealer particularly in Taiwan, is MEMS. The MEMS market is dynamic, penetrating numerous industries, and provides much needed diversification for the entire supply chain; from fabs and equipment manufacturers to those at the CE product end of the chain.

Solar is likely to be a standout in San Francisco. Diversification into solar was a mixed bag for many during the past year, but with a rapidly expanding market triggered by various legislative supports globally (incentives, efficiency standards, etc.), the solar industry is ramping up quickly. The semiconductor has much to offer solar and the two are a natural pairing (cf., the 1Q09 Commentary, the initial Solar + Semi Intersect article in MarketWatch Quarterly, and the most recent MarketWatch Quarterly now available publically).

As for more core technologies, it's time to really take a good look at the 300mm question as well as memory. We hope to see more around 3D packaging and TSV. These technologies are maturing and will have a significant impact on the future of ICs. DDR4 - well, without logic and a 3D stack, some analysts such as Yole Developpement, argue that phase change memories will be affected and the future of NAND and the future of SSD.

At the upcoming SEMICONs, prepare to be challenged- not wined and dined (cf., EETimes article). And that's a good thing.

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Solar’s far reaching semi impact: Polysilicon production

Posted by: Lisa Ann Cairns, Ph.D. in Solar, Market Trends, Macro Economics on Mar 13, 2009

A truism: all industries have been hit by the economic downturn. Coupling global recession with the steep drop in oil prices, the nascent solar industry recoiled as well. As I wrote about here, the alternative energy industries are a new growth opportunity for the semiconductor industry, represent ing sector growth for various components and new end products (not to mention materials, equipment, and knowledge from the semi industry).

While the solar industry writ large was suffering pre-2009 US Stimulus Bill, during 4Q08, polysilicon manufacturers for both solar and chips experienced "a 7 percent growth from the previous quarter."

What does this tell us? Well, most importantly it is another positive signal that shipments are trending up and that solar IS going to be the important driver that we thought it would be.

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Lisa Ann Cairns, Ph.D., Senior Contributor to MarketWatch

Lisa Ann Cairns joined the Smith network of businesses in 2001 as a Technology Strategist and became the Chief Strategy Officer for a Smith subsidiary the following year. More recently, Lisa has been involved with various strategic marketing projects for the Smith network and is the Senior Contributor for MarketWatch. Prior to joining Smith, Lisa was an Assistant Professor at Texas A&M University. Lisa received her Ph.D. (1998) and A.M. (1992) from The University of Chicago, during which time she was awarded a National Science Foundation Doctoral Dissertation Research Improvement Grant. She holds a B.A. from Hofstra University, 1988, where she was the first woman undergraduate to receive a Fulbright Scholarship.

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