Market Watch
EDITED by CHELSEY DRYSDALE
EMS M&A Fell in 2019, Market Watcher Says
CHICAGO – M&A activity in the electronics manufacturing services sector slipped slightly in 2019, falling two to a total of 29. The market for such deals remained strong through the year, said Lincoln International, an investment bank advisory group that tracks the market.

There were 14 consolidations, four vertical/horizontal convergences, 10 private equity investments, and one “diversification” into EMS, Lincoln said. No OEM divestitures took place last year.

STORING UP
Trends in the US electronics equipment market (shipments only).
%CHANGE
NOV.
DEC.
JAN.
YTD%
Computers and electronics products
0.3
-0.1
0.3
0.5
Computers
1.3
0.2
3.3
-13.5
Storage devices
22.0
-17.0
10.3
49.1
Other peripheral equipment
5.6
-5.3
4.0
11.3
Nondefense communications equipment
-0.4
2.9
-0.7
5.6
Defense communications equipment
3.8
27.1
-17.5
-20.4
A/V equipment
-14.8
3.5
-8.9
-26.3
Components1
3.9
0.8
2.3
9.4
Nondefense search & navigation equipment
-0.3
0.3
1.0
-3.9
Defense search & navigation equipment
2.5
-2.0
-0.4
2.9
Medical, measurement and control
-2.5
-0.2
1.2
-4.2
rRevised. *Preliminary. 1Includes semiconductors. Seasonally adjusted. Source: U.S. Department of Commerce Census Bureau, Mar. 5, 2020
US MANUFACTURING INDICES
OCT.
NOV.
DEC.
JAN.
FEB.
PMI
48.3
48.1
47.8
50.9
50.1
New orders
49.1
47.2
47.6
52.0
49.8
Production
46.2
49.1
44.8
54.3
50.3
Inventories
48.9
45.5
49.2
48.8
46.5
Customer inventories
47.8
45.0
41.1
43.8
41.8
Backlogs
44.1
43.0
43.3
45.7
50.3
Sources: Institute for Supply Management, Mar. 2, 2020
Key Components
SEPT.
OCT.
NOV.
DEC.
JAN.
Semiconductor equipment billings1
-5.7%
2.5%
9.1%
17.8%r
22.9%p
Semiconductors2
-14.6%
-12.7%
-10.7%
-5.4%r
-0.3%p
PCBs3 (North America)
1.04
1.11
1.08
1.09
1.05
Computers/electronic products4
5.52
5.49
5.50
5.47r
5.43p
Sources: 1SEMI, 2SIA (3-month moving average growth), 3IPC, 4Census Bureau, ppreliminary, rrevised
Hot Takes
  • Tablet demand in China is picking up as companies affected by the coronavirus are pushing remote work, but ODM production is impacted by shortages of raw materials and components. (DigiTimes)
  • Worldwide spending on information and communications technology is expected to be $4.3 trillion in 2020, an increase of 3.6% over 2019. (IDC)
  • Electronics manufacturers anticipate at least a five-week product shipment delay from suppliers due to the coronavirus epidemic. (IPC)
  • The coronavirus outbreak is expected to drive higher prices for components throughout 2020, especially MLCC and chip resistors. (DigiTimes)
  • Annual semiconductor unit shipments are forecast to rise 7% in 2020 and surpass one trillion units for the second time in history. (IC Insights)
  • IT spending could grow 1% compared to the original forecast of more than 4% growth, due to coronavirus effects. (IDC)
  • The global automotive electronics market accounted for $228 billion in 2019, and is estimated to reach $382 billion by 2026, a CAGR of 7.3%. (Grandview Research)
  • The worldwide smartphone market is expected to decline 2.3% in 2020, with shipment volume over 1.3 billion. (IDC)
  • PC device shipments will decline 9% in 2020, to 374 million units. Shipments are forecast to grow to 377 million in 2024, a five-year CAGR of 0.2%. (IDC)
Metals Index
April 2020 LME Tin
April 2020 LME Lead
April 2020 LME Copper
April 2020 COMEX Silver