Deep COVID-19 Impact on European Semiconductor Distribution (DMASS) in Second Quarter
DMASS reports -20.7% in semiconductor revenue in Q2/2020. Clear COVID-19 context in results across Europe.
London, August 20, 2020 – What was still a mix of market- and pandemic-driven uncertainties in Q1, turned out to be a real, directly COVID-19 and lockdown-related downturn for the European Semiconductor Distribution in the second quarter of 2020. According to DMASS Ltd., sales in the European Semiconductor Distribution Market fell by 20.7% to 1.82 Billion Euro.
Georg Steinberger, chairman of DMASS: “As feared in our Q1 PR, the COVID-19 pandemic and its economic aftermath, starting across Europe in February and March, hit the electronics industry with full force in the second quarter. Manufacturing shutdown, economic uncertainties among consumers and companies and lack of supply chain visibility drove many customers to step on the ordering brake and led to a lot of pushouts on existing orders. Ironically, it could have been worse, and we do not really know what will come at us in the second half of 2020 – Rally or Rafting.”
At a country or regional level, the situation was equally bad across the board and major regions and markets ended with a double-digit decline (except Ireland, Netherlands, Austria and Russia): Germany went down by 21.6% to 528 Million Euro, Italy ended at -19.3% and 161 Million Euro, France at -21.4% and 121 Million Euro, the UK at -23.6% and 119 Million Euro, Eastern Europe at a staggering -30.6% and 279 Million Euro and the Nordic countries at -33.2% and 138 Million Euros.
Georg Steinberger: “It is almost impossible to find anything positive or less negative in Q2, but clearly countries that are predominantly contract manufacturing-driven suffered most.”
No positive news on the product side, except that more design-oriented and exclusive products declined less than standard products. Of the major product groups, Standard Discrete went down by 31.4% to 87 Million Euro, Discrete Power by 23.5% to 196 Million Euro, Opto by “only” 17.1% to 164 Million Euro, Analog by 22% to 534 Million Euro, Memories by 32.4% to 141 Million, MOS Micro by 15.3% to 383 Million Euro, Programmable Logic by 12.8% to 128 Million Euro, Standard Logic by 18.2% to 27 Million Euro and finally Other Logic by 14.5% to 112 Million Euro.
Georg Steinberger: “Besides Covid-19, you also see some special effects of product categories slowly deteriorating – arguably legacy technologies like SRAMs and EEPROMs – or disappearing from distribution as an effect of suppliers taking some business direct, like Digital Signal Processors (DSPs). But none of those have a major effect on the totals. However, the fact that standard products are suffering more than expensive specialties is strange, as the financial risk on the customer side is rather low. We will see how this pushback on standard products develops, once the market turns around.”
2020 will be a year of significant double-digit decline, “whether we like it or not”, said Steinberger, “and it could, no, should be the beginning of a reassessment of how we operate as an industry and at a larger scale, as society in general. It is clear that resources become scarcer and the throwaway mentality of the last 50 years will lead to disaster. Technology can play a major part in recreating a sustainable world, but as we can see by its interrupted supply chain, it is also part of the current problem. The big question is: how can the significant influence of technology be used to make changes to a sustainable better world? Can it?”
DMASS Ltd. reports to members only statistics on Interconnect, Passive Components, Electromechanical Components and Power Supplies (IPE).
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 33 active members in 2020 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.