Press Release Q4 2004

European Semiconductor Distribution Market (DMASS) grew double-digit in 2004 

DMASS' fourth quarter 2004 grows by 9%. Industrial channel remains robust against weakening outlooks. Uncertainty on RoHS will accompany distribution business for the better part of 2005. 

London, February 11, 2005 - Also in the fourth quarter of 2004, the European semiconductor distribution market showed stable growth, although the growth trend curve throughout the year slowed down quite significantly. According to DMASS, semiconductor distribution sales from October to December increased 1,06 Billion Euro, a 9% increase over the same period of 2003. For the total year 2004, DMASS reported a growth of 13,2% to 4,65 Billion Euro.

Newly appointed DMASS Chairman Gary Nevison noted: "2004 has definitely turned out as a good year for the European semiconductor distribution. 13,2 % growth in local currency against unfortunate effects caused by the weak dollar are certainly a healthy development. In fact, if you believe market researchers in the semiconductor industry, distribution grew faster in 2004 than the total market in Europe."  For 2005, Nevison reaffirms his observations from earlier this year: "The current booking situation could be negatively affected by the EU directives and the uncertainties they still cause for many customers. This will accompany us for the better part of 2005."

Regionally, the strongest growth in Q4/CY 04 again happened in Israel, Emerging Eastern European Countries, France, Italy, Russia and Switzerland, with growth rates between 49,5 and 14,5%, compared with Q4 of 2003. Countries with negative trends in Q4 were UK, Sweden, Finland, Austria and Hungary. Germany as the single biggest market, grew by 6,4%, to 292 Million Euro. Italy (140 Million Euro), UK (133 Million Euro) and France (118 Million Euro) followed in size.

Gary Nevison: "Last quarter, we did not have such a clear picture in regional growth trends. Western European markets seem to keep up, with France and Italy certainly recovering some lost ground. However, one quarter does not make a trend, so the good thing to see was that the major regions scored throughout 2004 and - apart from UK - delivered at or beyond DMASS average growth." 

Product-wise, the 4^th quarter saw Memories as the growth leaders, with a plus of 35% (37% for the full year) - driven mainly by a surge in DRAMs (non-PC) and Flash-memories. Major product groups in distribution like MOS-Micro and Opto grew at or slightly below average, with LEDs standing out at 30% plus, while Analog components, Programmable Logic and Discretes came in at low single-digit figures (between 5 and 2%).

Concludes Gary Nevison: "In 2004, all major product areas grew around the average rate, which reaffirms my statement from last time that distribution does an extremely good and stable job on a broad scale of regions, customers and technologies. We may not be 90% of the business, but we serve more than 90% of the European customers."

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, with an additional 3 new members joining at Q1/CY 05, 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.