Press Release Q3 2004

European Semiconductor Distribution Market remains strong  

DMASS' third quarter 2004 shows again 19 percent increase in semiconductor sales to the industrial channel. Smaller markets and Eastern Europe drive growth. Outlook remains difficult.

London, November 22, 2004 - The European semiconductor distribution market remained strong through the third quarter of 2004. According to DMASS, semiconductor distribution sales from July to September rose by 19% to 1,17 Billion Euro, compared with last year's identical period. The run-rate for 2004 stays close to 15%.

Newly appointed DMASS Chairman Gary Nevison commented on the results: "After a few difficult years, the business at last has gained some lost ground again. 2004 looks like a good year for semiconductor distribution. Unfortunately, an expected boom has not materialised - another proof that the only predictable aspect of our business is its unpredictability." Nevison continued: "Our biggest concern for the business today is not so much in the cyclical development but in RoHS and its impact on mid-term bookings and sales."

Regionally, the strongest growth in Q3/CY 04 again happened in Israel, Poland, Emerging Eastern European Countries, with growth rates between 93% and 73% over the comparable quarter of last year. In the Western European regions, Iberia, France and Switzerland continued their positive trends with growth rates of 41,3%, 27,6% and 24,7%. The Big Four (Germany, Italy, UK and France) stayed - with the exception of France - below average. Size-wise, Germany remains the biggest market, with 342 Million Euro, followed by UK (154 Million Euro), Italy (138 Million Euro) and France (118 Million Euro).

Gary Nevison: "Eastern Europe certainly still benefits from production transfers, but it is good to see that Western European markets continue to have double digit growth potential as well."

Product-wise, the third quarter seems to be a copy of Q2. All major product categories, as reported by DMASS, grew by double digits over last year's third quarter. Growth leader in Q3 and for 2004 in total remained the Memories with a plus of 53% - DRAMs, Flash-Memories and EEPROMs all grew above the average. The only other product groups above average were "Other MOS-Logic" with a growth of 25,6% and Programmable Logic with 22,6%. Discrete, Opto, Analog, MOS Micros and Bipolar Logic all grew between 13,6 and 16,8%. Mainstream highlights were Power FETs (plus 29,4%), DSPs (26,8%) and LEDs (24,9%).

Concludes Gary Nevison: "The fact that all product areas showed a healthy double digit upturn makes us believe that 2004 seems to be a year of real growth, driven by stable pricing, higher volumes and hard effort rather than by pure cyclical effects. Distribution seems to remain a veritable concept for many thousand partners in the supply chain."

About DMASS

DMASS (Distributors' and Manufacturers' Association of Semiconductor Specialists), 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 currently consists of 30 active members and represents between 70% and 80% 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.