Month: July 2016

Will Brexit hamper semicon sales in Korea?

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I am ever grateful to Dr. Robert N. Castellano, president of The Information Network., USA, for sharing his article titled “Korea’s Capex Holds The Key To Strong Semiconductor Equipment Sales, But Brexit May Weigh On Business,” which is featured on Seeking Alpha.

robert-castellano

  • A joint study conducted by Applied Materials and Gartner points to semiconductor equipment sales in Korea of $10 billion per year.
  •  Although US semiconductor equipment companies stand to benefit, numerous Korean equipment companies compete in several sectors with US companies.
  • Revenue and growth could be negatively impacted by the strong US dollar and a possible global slowdown from Brexit.

Wafer fabrication equipment (WFE), he says, presents a lucrative market for Korea. In the short term, the strong dollar, as a result of Brexit, will impact sales of WFE equipment to the European semiconductor manufacturers. Traditionally, Europe represents about 5 percent of WFE sales. Hence, Korea could represent an even a greater percentage of WFE sales in 2016.

On the other hand, the turmoil in global financial markets, as a result of Brexit, could have an overall dampening effect on the Korean economy so that revenues generated from Korean semiconductor companies could be impacted. This will result in lower WFE sales as the NAND and smartphone markets slow, particularly in Europe.

He concludes that the US Dollar and Japanese Yen, could strengthen throughout 2016 and impact revenue growth for US and Japanese equipment companies selling in Korea.

It would be interesting to see how H2-2016 pans out!

How are semicon sales in 2016? Good or bad?

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Let’s turn our attention to semiconductors. The key question: how is the industry performing?

SIANow, the Semiconductor Industry Association (SIA) has put it as $26 billion for May 2016, an increase of 0.4 percent compared to previous month’s total of $25.9 billion, but a decrease of 7.7 percent compared to the May 2015 total of $28.1 billion.

If we look at SEMI’s North American semiconductor equipment industry figures,
the three-month average of worldwide bookings in June 2016 was $1.71 billion. The bookings figure is 2.1 percent lower than final May 2016 level of $1.75 billion, and 12.9 percent higher than June 2015 order level of $1.52 billion.

However, IC Insights has lowered its 2016 semiconductor market forecast to -1 percent. It says, ” Rarely can there be strong semiconductor market growth without at least “good” worldwide economic growth to support it. ”

Besides the impact of Brexit on the UK, and how it can impact the European semiconductor industry, the DRAM industry is said to register a 19 percent drop of $8.5 billion this year to $36.5 billion. The semiconductor market growth, excluding DRAM, is forecast to be +2 percent for 2016.

As the SIA puts it, “additional research is needed as we transition to an even more connected world, enabled by innovations like the IoT.”

According to the SIA, research is needed in areas such as energy-efficient sensing and computing, cyber-physical systems, intelligent storage, real-time communication ecosystem, multi-level and scalable security, next-generation manufacturing paradigms, insight computing, and an IoT test platform.

Why can’t today’s computers process data like the brain? Brain-inspired computing has been a focus area. How that will pan out would make interesting reading.

IoT high on agenda for 2016?

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IoTHere’s my last piece for Control Engineering Asia on what should we expect in 2016?

There are certain factors such as the adoption of IoT, advancement in M2M, the increasing demand of robots in the industrial sector, etc., that can result positively on the industrial control and factory automation market.

The global industrial automation services market is likely to exceed $50 billion by 2019. The industrial controls system market is likely to reach $81 billion in 2021!

For industrial controls/valves, the Asia-Pacific market for industrial valves is projected to grow at 6.88 percent CAGR between 2014 and 2019. The industrial control system (ICS) security market is likely to grow at a CAGR of 7.6 percent from 2014 to 2019.

How about PLC/DCS and SCADA? One observer said that the PLC market in Europe is likely to grow at a CAGR of 7.44 percent from 2014-2019. The Asia-Pacific market for PLCs is likely to hit $3.6 billion in 2016. Also, the APAC DCS (decentralized automated control systems) market is set to grow at 4.36 percent CAGR over 2014-2019.

The Southeast Asia supervisory control and data acquisition (SCADA) market is likely to double in five years from $148.7 million in 2012 to reach an estimated $274.8 million in 2018. For PLM, the market is likely to reach $75.87 billion by 2022. The CAD market in aerospace and defense sector in North America is set to grow at a CAGR of 4.2 percent over 2014-2019.

IoT to dominate?
Nearly everyone’s favorite subject happens to be the IoT. The industrial IoT market is likely to grow at 26.56 percent CAGR to 2019. The M2M connections market will likely be worth $35.16 billion by 2020. Even the IoT in retail market is said to be worth $35.64 billion by 2020.

The installed base of wireless M2M devices in the oil & gas industry alone is set to grow at CAGR of 20.1 percent from 0.5 million units at end of 2014 to 1.25 million units by 2019.

How about sensors? Asia Pacific is set to reach $5.23 billion by 2020 at CAGR of 4.09 percent. In water/wastewater, the water recycle market and water re-use market growth are expected to be at 22 percent and 19 percent CAGR to 2019.

Hope some or all of these targets are met in 2016.

Friends, this is my new blog! :)

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Dear friends, how have you all been? It feels really good to be back! It has been nearly tw0 years Placeholder Imagethat I have been away. You may want to know what I have been doing so far?

Well, first, I was Head of Content at CIOL, and later, went off to Singapore for a stint at Control Engineering Asia. However, early this year, I experienced a massive heart attack, that put me off for some time!

Thanks to all of your best wishes, I am once again, back!

I will continue to write about my favorite topic – semiconductors and electronics. As well as topics around active/passive components, automation technologies, automotive, ICs, IoE/IoT,  LEDs, MCUs, MPUs, photonics, PV/thin film solar, robotics, security, telecom, etc.

Hope you all like and enjoy. 🙂