Electronic Component Market Snapshot

Electronic components are at the core of all electric and electronic products and systems. The active components and passive component make the whole picture of electronic industry. The former typically encompasses semiconductors such as transistors, diodes, microprocessors, memories, power devices, as the latter include resistors, capacitors, ferrites, inductors, low and high frequency filters. Overall, the industry lasts to remain very innovative, competitive and ever-changing.

Active Component Market

Semiconductors

2004 was a fruitful year for the semiconductor industry, with global value of $213 billion, a rise of 28% over 2003. However, in 2005, the growth of semiconductor sales shrank sequentially in all geographic regions except the Asia-Pacific region, which inching up by 8.1%. Yet, in the second quarter of 2005, capacity utilization showed somewhat improved, with overall utilization rising to 89% from 86% of the first quarter.

In DRAM sector, cost reductions owing to increased production at advanced plants using 12-inch wafers, and some supply limitations owing to DRAM makers shifting production to flash memory, should elevate companies' profitability in the third quarter of 2005. According to a new survey by Gartner, global semiconductor capital equipment sales are on pace to decrease about 12% to $33.1 billion in 2005, while last year equipment sales increased sharply to correct a serious under investment in equipment in the face of strong semiconductor demand. Now production capacity exceeds demand, and equipment manufacturers are seeing weaker demand. Worldwide wafer fab equipment spending is projected to decline 9.6% to $25.5 billion in 2005 and predicted to decline in 2006 as well and come back to positive growth in 2007.

TFT-LCDs

The global shipment of large-sized thin film transistor-liquid crystal display (TFT-LCD) panels celebrated their record-high sales of about 50 million units (global revenue as US$9.6 billion) in the second quarter of 2005, up 16% from the previous quarter, according to DisplaySearch. The increasingly stable prices and increasing shipment tend to boost the total global third-quarter revenue of large-sized panels to a new quarterly high of about US$11.1 billion. The second-quarter global revenue was US$9.6 billion. Notebook PC panel shipments inched up 9% quarter to quarter and 30% year-to-year to 13.9 million units in the second quarter of 2005. LCD monitor panel shipments jumped 17% Q/Q and 45% Y/Y to 28.3 million units. The 17-inch monitors are still king, rising to over 60% in the second quarter of 2005.

The shipment volume of 19-inch LCD monitor panels exceed its popularity over 15-inch with its share rising to 22%, while 15-inch panels dropped to 14%. LCD monitor panel revenues grew 19% Q/Q, but fell 12% Y/Y, to US$5 billion. LCD TV panel shipment soared 39% Q/Q and 84% Y/Y to six million units. 32-inch 1,366X768 pixel panels replaced 20-inch VGA as the dominant panel size with a 106% Q/Q growth. LCD TV panel revenue rose 41% Q/Q and 40% Y/Y to US$2.3B, overtaking notebook panels for the first time.

Passive Component Market

Generally speaking, the demands of passive components are often driven by those of active components. For example, every new semiconductor, even replacing some of the passive functions, generates new requirements in volume and performance for passive components. And a state-of-the-art processor typically demands 350 passive components around it, and digital TV shows more wanting needs for passives. Passive components continue to incorporate and integrate new functions, increase performance and minimize in sizes to adapt to the compact devices. The miniaturization of passive components has been even stronger than that of semiconductors over the last eleven years.

Passives are big deals, representing over $30 billion business worldwide. Mainland China and Taiwan are two major production centers as the former has nearly 1,200 makers and latter about 500. The both together manufacture about 980 billion units of passive components, basically in the form of capacitors, resistors and inductors. The output of capacitors in China reached 222 billion units in 2004 and estimated to grow 20% in 2005 and 2006 respectively. Taiwan accounts for about 8% of world capacitor output and 30% of MLCC(multi-layer ceramic capacitors), marking US$923 million in sales turnover for capacitors in 2004. Sales revenues are predicted to climb to US$1.02 billion and US$1.13 billion in 2005 and 2006 respectively, according to the Industrial Technology Research Institute (ITRI).

Unit production is forecast to reach 276 billion by 2005 and 330 billion in 2006. Passive components represent 7 billion Euros sales in Europe, yet only accounting for 2% of the value of electronic equipment and systems, namely a small percentage in value, yet in a large percentage in number, about 70% of the components used in electronic equipment and systems.

The global passive-component industry will grow 12-15% in 2005. However, the excess inventory can be worked off by the end of this year. In the first quarter of 2005, growing demand for handsets in Japan and China fueled the momentum for passive components.

Article from ttnet.net ttnet.net