SMT007 Magazine

SMT-Dec2015

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90 SMT Magazine • December 2015 traditional industries, moderate growth of in- vestment, and weak export sector. Industry Downturn The global electronics industry is experienc- ing a downturn. The world of personal comput- ers takes a beating. Global PC shipments totaled 73.7 million units in the third quarter of 2015, a 7.7% decline from the same period last year, according to Gartner, Inc. The market is expected to reach about 300 million units in 2015, a decline of 4.5% year over year. "We do not expect the global PC mar- ket to recover until 2016," said Ranjit Atwal, re- search director at Gartner. In a recently published report from the Dell'Oro Group, the worldwide telecommuni- cation network infrastructure capex fell nearly US$10 billion in dollar terms in the first half of 2015. In China, the 4G rollout has reached its pro- jected volume and 5G deployment will likely commence by 2017 at the earliest. Silver Lining Amid all these challenges, hope floats. The largest economies that matter for electron- ics consumption—The U.S., China, Germany, France, Japan, and ASEAN—continue to expand albeit either slowing down or posting minimal growth. While the Chinese economy is slowing down, bold reforms by the Chinese government are being implemented. Thus the economic weakness will probably be short-lived. The huge population of Asia and its expand- ing middle class augur well for premium goods like high-tech products. According to a recent Nielsen study, the middle class population in Asia will balloon to 3 billion by 2030. This will account for about 80% of the global middle class. The growing aging population in the de- veloped countries, on the other hand, presents new opportunities for telemedicine and medi- cal electronics. Urbanization is on the rise. KPMG predicted that by 2030, 60% of the world's population will live in cities. This brings about opportuni- ties for smart cities to enhance the quality of their people's lives. Smart cities have deployed the integration of information, communications and technolo- gy (ICT) solutions across three or more different functional areas of a city. The main function ar- eas typically include mobile and transport, en- ergy and sustainability, physical infrastructure, governance, and safety and security. The car is becoming more of an electronic equipment. Today the electronics' share of ve- hicle value is at 40% for traditional, internal combustion engine cars. This percentage value will definitely rise in the next few years. A promising area is the advanced driver as- sistance systems (ADAS) market which gener- ated about $27 billion revenues in 2014 and ex- pected to grow at CAGR of 14.9% to reach $78 billion by 2020 according to ARC. Part of the ADAS market is the automotive camera submarket. Its revenues totaled US$1.2 billion in 2014, and will continue growing at 36% CAGR until 2020 per Yole Development. The automotive camera will shift from an add- on car feature to a must-have equipment due to regulations in the U.S. and the European Union. It is a key building block of the next- generation ADAS for the driverless car. maintaining competitiveness To address the market uncertainty and vola- tility, EMS providers have diversified the mar- kets they serve to balance enterprise risk among sources of revenues, garner higher profit mar- gins, and maintain competitiveness. As the margin for the traditional markets of the 3Cs (computing, communications, and consumer electronics) continues to narrow, EMS providers are intensifying their play in nontraditional markets like automotive, indus- emS ProVIDerS: mAInTAInInG comPeTITIVeneSS AnD SeeKInG SIGnIFIcAnce ArTiCle " The huge population of Asia and its expanding middle class augur well for premium goods like high-tech products. "

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