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The second quarter of 2019 finally showed the long-expected slowdown of the component’s distribution market in Europe, largely in line with the overall market trends. According to DMASS Ltd., the European Semiconductor Distribution Market declined 1% to 2.32 Billion Euro in Q2.
Georg Steinberger, chairman of DMASS: “As stated in our last announcement, the slowdown was expected, due to weaker bookings in the prior periods, and it will continue during the year. Influencing factors split between industry-internal reasons – overcapacity in memories, long inventory tail at big customers, lacklustre sales in consumer products, suppliers taking back business from distribution and subsequent price declines – and macro-effects like trade conflicts, Brexit and economic uncertainty throughout the industry, despite excellent opportunities. Combined with DTAM to TAM changes all have an effect on continued price pressure, which overall is influencing the magnitude of the downturn we see.”
At country and region level, Q2 displays a very disparate picture, from double-digit growth in smaller countries to double-digit decline in medium-sized markets like Italy, Israel and Russia. Among the major markets, Germany grew by 0.1% to 681 Million Euro, Italy shrank by 11.3% to 200 Million Euro, France dropped 3.9% to 155 Million Euro, UK (without Ireland) grew by 4.2% to 155 Million Euro, Eastern Europe by 4% to 406 Million Euro and Scandinavia by 3% to 207 Million Euro.“
Georg Steinberger: “As the regional markets are very different in structure and customer nature, it is no surprise to see differences as described above. In EMS-driven markets in Nordic and Eastern Europe, all trends from double-digit growth to double-digit decline are visible in Q2, while for example the UK despite all Brexit anxiety holds up rather nicely for another quarter. The Italian market on the other hand lost 11.3% compared to last year, is negative for the second quarter and faces a long, hot summer quarter.
At the product level, almost every area turned negative, except some selected Power, Sensors, Opto, Analog, Memory and Logic categories. Analog products grew 1.5% to 687 Million Euro, MOS Micro shrank 5.6% to 455 Million Euros, Power grew 2.6% to 258 Million Euros, Memories declined 0.8% to 206 Million Euro and Opto lost 8.4% to 203 Million Euro. While Programmable Logic dropped by 4% to 147 Million Euro, Other Logic grew another staggering 19.3% to 137 Million Euro.
Georg Steinberger: “Last quarter looks a bit awkward if you compare products that are connected through project-driven sales – Analog grows while MOS Micro declines, Programmable Logic drops while ASSPs clearly explode, Opto and LEDs decline, Sensors grow. If you would pick a real setback, it would probably be the disappointing LED business. To be noted positively are Power-MOS which have grown to the second-biggest product category in distribution, only outperformed by Power Management. And Digital Logic is slowly starting to overtake Programmable Logic. Comrade Trend says hello…”
What is ahead for the rest of the year is hard to predict in a shaky environment as faced in 2019. Steinberger: “Distribution is well positioned, excellently organized and more predictable than the rest of the market. It is about time that the real value of what we do for the industry is properly recognized by both sides of the supply chain.”
DMASS, a European non-profit organisation, is the only industry body that collates detailed semiconductor distribution market data on a quarterly basis by country and product groups such as microcontrollers, flash memories, analog components and many more. DMASS figures are collected and consolidated by Data Dynamics Ltd.
DMASS, founded in 1989, provides its members with a reliable statistical tool to evaluate their relative mass-market performance. The organisation consists of 34 active members in 2019 and represents between 80% and 85% of the total European distribution market, depending on the regions. To continuously increase its European market coverage, DMASS welcomes new membership applications from distributors and semiconductor manufacturers.