Electronic a Nov 08

8/3/2019 Electronic a Nov 08

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Electronics marketforecast and industry

trends 2007-2012

November 13rd 2008, Munich

Sebastien Rospide

Electronica 2008


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1. Structure of the industry and global environment2. Growth scenario & forecast, position of Europe

3. Industry mega trends and subsequent impact inEurope

4. Opportunities for Europe

5. Conclusion

2 Electronica 2008, November 13th 2008

Outline


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World production per application sector,2008

1,254 billion euros in2008

World production per region,2008


Structure of the Electronic Equipmentindustry in 2008

Source DECISION Source DECISION


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Mass market unit growth, 2000 to 2012 (in mio

units) Since 2000, mass markets represent

app. 50% of the industry (in valueterm)

Since 2000, China and APAC shareof production grew from 25% to 43%to support price cuts

Professional electronic equipmentdo not obey to the same rules

Mass markets requirements Professional markets requirements

Componentsuppliers

Economies of scale and CAPEX to

face price pressure and increased

volumes

Focus on differentiating technos, process

and integration to deliver complete

functions

EMS/ODMGlobal scale and focus on low cost

areas

Proximity and flexibility on low and medium

volumes

OEMsGet closer to end demand by

increasing industrial footprint inemerging regions

Investigate new markets and service

creation opportunities to answer societalneeds


Mass market vs. professional electronicsdilemma

Source DECISION


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Financial instability

Currency fluctuation: Euro/dollar parity strongly impacting global

competitiveness depending on cost structure

Credit crunch: subsequent impact on real economy

The end of the American leadership

Is their a new pilot on board? (Europe vs. China)

Towards new consumption models?

Energy prices

Although slowing down due to economical downturn, petroleum prices

have been multiplied by 5 in 5 years

Environmental considerations and regulations could modify supply

chain organizations


Economical environment generates majoruncertainties


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Story is different than in 1929 3% global growth estimated in 2009, banking system has been saved

Electronics remains the enabling industry, providing solutions andproductivity across the board

It will continue to deliver its benefits both in developed countries and developing ones,

growing faster than the world GDP

New societal needs (health and well being, environment, security, transport, mobility, etc.) rely

on electronic solutions

After oil, electronics is the corner stone of the 21st century industrial revolution. Gulf states are

investing !

World GDP in 2007 = $65

trillion

Uneven wealth distribution


But still major opportunities forelectronics

Source: STM, IMF

Source : STM, IMF, WB


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1. Structure of the industry and global environment

2. Growth scenario & forecast, position of Europe



5. Conclusion


Outline


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Annual Growth

Rate

No crisis


Crisis impact on the electronics industry

Electronics Equipment market value growth,2007-2012

Crisis not similar to 2001

Slow down limited to 2009 and2010

Long term Estimated impact, -

1.5% on the CAGR 2007-2012 Long terms growth factors remain

unchangedCrisis

CAGR 6%

CAGR 4.5%

Source DECISION


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Regional Forecast 2007 to 2012

WORLD EUROPE CHINA

Electronic equipment production growth profile per region, 2007-

2012

2009 will be difficult across the globe, even for China

Europe has the assets to support and rip the benefit of the followingmarket pull

Source DECISION


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European Strategic Leaderships

World market:

100bn, CAGR 6.5%

OEMs, integrators

and component

leadership

World market:

303bn, CAGR 3%

Mobile Terminal and

infrastructure

leadership

World market: 79bn,CAGR 7.5%

Civil Aerospace

leadership

World market: 29bn,

CAGR 12%

Leadership in

medical imagery

World market:

155bn, CAGR 4.5%

Leaderships in

Automation, Power,

Transportation

Leaderships in strategic sectors, which will be the future drivers of theglobal industry

In these domains, competitiveness rely on the cumulated knowledge andthe virtuous cycles between component suppliers and final OEMs

Source DECISION


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5. Conclusion


Outline


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Changing

glo

ballandscape

Manufacturing

& Sales

Design

Stock market

From boxes towards solutions and

systems

From integrated models towards

innovation ecosystems

From size towards market leadershipValuec

reation

Impact areas Industry megatrends


From profitless prosperity to valuecreation

Changing paradigms are leading to industrial restructuring,players are seeking for strategic agility


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Industrial restructuring in Europe


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5. Conclusion


Outline


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Medical Outlook: 14% CAGR in Europe, from professional to mass market

applications

Innovation : well being, new services like patient monitoring,

Heterogeneous integration (biology, SC, power, High Reliability)

Opportunities: Imagery and Telecom leadership, European medical

expenses 600 billion euros = 6% of the GDP and growing faster (major

productivity gains required)

Energy

Outlook: Solar cells shortage, Investment in PV = investment in SC in

2010

Innovation: Energy mix to increase requiring system approach (modalapproach) and specific technologies (components, power management,

storage)

Opportunities: German leadership in PV, Spain and Denmark in Wind

Energy, major operators and investments15 Electronica 2008, November 13th 2008

European opportunities (1)


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Industrial (power, automation, transportation) Outlook: 5.0% CAGR in Europe, a strong European leadership in all the

value chain

Innovation: large scale smart infrastructures, increased global

operations productivity (design, manufacturing, supply chain), energy

efficient systems require new product & technology from component to

software

Opportunities: European regulations and consciousness ahead of the

market

Automotive

Outlook: 4.5% CAGR in Europe, strong investment in emerging regions

Innovation: Electronic content to experience a new boost following newcar architectures (impact from 2010), mechatronic integration

Opportunities: technological leadership and industrial infrastructure,

new innovators like Michelin, Continental, Bollor, Dassault


European opportunities (2)


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5. Conclusion


Outline


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Back to basics, innovation is the keydifferentiator for Europe

Europe has world leaderships in strategic sectors of the electronicsindustry It has the assets to support the societal market pull (Environment and Energy efficiency,

transport, health, security, etc.)

New virtuous cycles from component to OEMs and service suppliers need to be created to

seize this opportunity and capture world positions (see past success in mobile)

Competition is global and no competitive advantage lasts forever, keystrengths in Europe should be reinforced Cross border collaborations and standardization at the European level are mandatory to

reach the critical size and create a consistent European market

Proximity between manufacturing and design is key to successful innovation in many

domains, Europe should be careful not to fall below the critical size

Financial crisis is the opportunity to redefine long term visions andstrategies for the industry

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Electronic a Nov 08

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