European Semiconductor Distribution Market (DMASS) Starts strong into 2015
Massive exchange rate effects drive double-digit upswing in major regions, except in Germany and Italy. UK, Iberia, Austria and Eastern Europe showed over-proportional increase. Opto, Programmable Logic and Analog lead the way. Price increases expected to compensate currency effects.
London, May 22, 2015 – The European semiconductor distribution industry started very strong into 2015 and continued the positive trend from the last quarters of 2014. According to DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), semiconductor distribution sales in Q1/CY15 grew by 13.3% to 1.82 Billion Euro, the highest recorded quarterly sales since the introduction of the Euro in 2002.
The majority of the increase is due to a massive swing in the Euro/US-Dollar exchange rate, with the Euro losing 17% of its value, compared to Q1/CY14. As a significant part of billings to European customers are done in US Dollars, there is an artificial growth effect of ~50% of the total growth in Q1.
Georg Steinberger, chairman of DMASS, commented: “This is the opposite of what we have seen over previous years, when the Euro became stronger and stronger. We estimate that ~50% of the growth is a pure currency effect, either by customers buying in US-Dollars or by price increases that almost match the Dollar/Euro upswing. Nevertheless, even neglecting exchange rate effects, the distribution market enjoyed a stable sales growth. The downside certainly is a wave of price increases from overseas suppliers that occur all over the place to compensate exchange rate effects.”
From a regional perspective, the growth leaders in Q1 were to be found in the Eastern Regions – Israel, Turkey, Eastern European countries – and the Nordic countries. While Israel and Turkey grew over 30%, Eastern Europe in total grew by 29% (exception Russia with minus 15%), Nordic by 23%. Of the major regions, UK (16.3%) and France (17.2%) grew above average, while Germany (5.8%) and Italy (8.4%) trailed the trend. In absolute numbers, Germany reported 544 Million Euro, Italy 171 Million Euro, UK 158 Million Euro and France 146 Million Euro.
Georg Steinberger: “Growth rates in the major markets are differently influenced by the currency effects: Nordic, UK, France and Eastern Europe either account more strongly in Dollar or in local currency and therefore show higher increases. Germany, Italy and a few smaller markets have been more Euro-focused, with the effect that their single-digit growth rates are more in line with a realistic market growth. At the end, the absolute numbers count, and DMASS considers 2015 to have started in a very healthy way.”
Product-wise, almost all major categories stayed in line with the general growth corridor, except Power (6%), Sensors (9%), MOS Micro (10.5%) and Standard Logic (6.7%). Programmable Logic and Analog grew by 16.2%, Opto by 15.4%, Discretes by 14.2%, Memories by 13.9% and Other Logic by a staggering 18.5%. In absolute terms, the biggest product groups reported as follows: Analog grew to 537 Million Euro, MOS Micro to 371 Million Euro, Opto to 185 Million Euro, Power to 175 Million Euro, Programmable Logic to 145 Million Euro, Memory to 139 Million Euro, Discretes to 105 Million Euro and Other Logic (ASSPs and others) to 91 Million Euro.
Georg Steinberger: “As the currency effect really happens at the customer and regional level, the product growth rates are not really very reliable, as they are just the summary of what happens with customers or suppliers. But it would be safe to assume that the numbers contain a real growth in the magnitude as mentioned above – 5 to 6%.”
As news to the market, DMASS has started to report on Passive Components, Electromechanical Components and Power Supplies as well, to complete the distribution market picture. Due to the early stages of the reporting, numbers will only be shared among the reporting members. Steinberger: “The first reporting looks promising, but we still work on DMASS IPE coverage and memberships (distributors and suppliers). We expect to be able to report to the market sometime next year, to close the gap in European Distribution Market reporting.”
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 36 active members 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.