Press Release Q2 2007

European Semiconductor Distribution Market (DMASS) faces Q2/2007 slowdown after record quarter  

DMASS shows 1% growth H1/2007, -3% in Q2. Eastern Europe, Benelux and Nordic positive, moderate slowdown in Germany. Discrete grows, Opto and Analog stable, Memories and Programmable Logic significantly down.  

London, August 17, • After record year 2006, 2007 proves to become a transition year with moderate growth perspectives. The first half of 2007 still showed 0.9% growth compared to all-time-high levels of 2006, but the second quarter already recorded a decrease of 3.15% compared to Q2/2006. According to DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), the semiconductor distributor and manufacturer members achieved quarterly distribution revenues of 1.37 Billion Euro.

Anne Vernay, Chairwoman of DMASS, commented: “The OEM cycle and inventory correction with its associated price erosion seem to have reached European semiconductor distribution, which for almost 7 quarters has been decoupled from the overall market development. Although 2007 has been re-evaluated by most market researchers due to a softer environment, our expectations still remain slightly optimistic, especially since we see bookings pick up again.”

The regional trends as represented in the DMASS numbers varied significantly in the last quarter. Eastern Europe is on the verge of becoming the third-largest market region with again steady double-digit growth of 19.6% (149 Million Euro). Benelux reported an increase of 12.4% (54 Million Euro) compared to last year, the Nordic region, comprised of Norway, Denmark, Sweden and Finland, reported +4% (130 Million Euro). Iberia reported flat sales (55 Million Euro), while Germany (435 Million Euro) and Italy (182 Million Euro) showed a moderate slowdown of 2% respectively 6.6%. France and UK declined by double digits, with 12.4% (117 Million Euro) respectively 16.4% (133 Million Euro). The single biggest drop of sales happened in Israel with a minus of 27.5%.

Anne Vernay: “It seems that Germany, Italy and Iberia hold steady, while Eastern Europe, Benelux and Nordic maintain their growth mode of the previous quarter. The decline in UK and France seems to be over-proportional, knowing that both countries are well-positioned in electronics system designs.”

Product trends show similar patterns as in Q1, with Discretes, Opto and Analog products maintaining momentum or showing resistance against the slowdown. Discrete revenues were reported at 236 Million Euro (+4.6%), Opto at 128 Million Euro (+0.9%) and Analog at 353 Million Euro (0.3%). The single biggest product segments for Distribution, Standard Analog (281 Million Euro) and Microcontrollers (245 Million Euro), both grew by 1% respectively 2.9%. The highest growth happened in Power, with IGBTs and Power-FETs growing by 26.3% respectively 11.9%. The biggest decline was recorded in Other MOS Logic (ASICs etc.) with -39%, Flash with -32% and Microprocessors with -24.9%. Programmable Logic sales went down by 14.7% to 120 Million Euro.

Anne Vernay commented: “It is positive that a variety of standard product areas except memories and most design intensive fields except programmable logic have held up nicely. It can be noted that the Q2 slowdown to a large extent accounts to very specific issues in the MPU, Memory and Other MOS Logic field that could not really affect the overall positive momentum of distribution sales. We are happy to see that distribution remains the channel of choice for many customers with regards to demand creation products.”

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 31 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.