By Walt Custer, Custer Consulting Group, and Dan Tracy, SEMI
SEMI’s equipment billings year-to-date through February show over a 90 percent gain compared to the same period in the previous year. Year-to-date worldwide billings have reached about $7.5 billion.
Leading indicators can be useful in forecasting future business activity. For world semiconductor equipment billings, both the Global Manufacturing PMI Index and a composite of Taiwan foundry sales are useful indicators.
- The JPMorgan Global Manufacturing PMI is compiled by JP Morgan and IHS Markit (www.markiteconomics.com).
- The Taiwan foundry composite is calculated from the monthly sales of Taiwan stock exchange listed companies. This foundry composite is maintained by Custer Consulting Group.
- The Semiconductor Industry Association (SIA) provides monthly world semiconductor billings and SEMI supplies monthly world semiconductor equipment billings.
Chart 1 compares Taiwan foundry shipments, SEMI worldwide equipment billings, and SIA global semiconductor shipments. A useful way to compare these time series is by using 3/12 growth rates. The 3/12 growth is the ratio of three months of data, compared to the same three months a year earlier.
Foundry shipments are more volatile but timewise coincident with semiconductor shipments. Both the 3/12 of foundry and semiconductors “lead” the 3/12 of SEMI equipment billings by about 6 months. In early 2017, foundry growth has slowed though it remains positive. However, both the Taiwan foundry and SIA data predict that SEMI equipment growth will slow by mid-year.
Chart 2 compares the Global PMI to semiconductor and SEMI equipment billings. To accentuate the peaks and troughs the Global PMI has been squared in the graph. Global PMI leads semiconductor shipments by about two months and SEMI equipment billings by almost eight months. The present 2017 business cycle upturn is not as dramatic as in 2010 and the PMI predicts slowing SEMI equipment growth mid-year.
SEMI members can access member-only market data and information at www.semi.org/en/free-market-data-semi-members. For more information on SEMI, visit www.semi.org and follow SEMI on LinkedIn and Twitter.
Custer Consulting Group (www.custerconsulting.com) provides market research, business analyses and forecasts for the electronic equipment and solar/photovoltaic supply chains including semiconductors, printed circuit boards & other passive components, photovoltaic cells & modules, EMS, ODM & related assembly activities and materials & process equipment.
April 18, 2017