European Semiconductor Distribution (DMASS)
Sees Moderate Decline in Summer Quarter

European semiconductor distribution shrinks by 4.4% in Q3/2011. Eastern Europe remains at growth mode.  

London, November 11, 2011 – The European Semiconductor Market faces first signs of a decline since 2 years in Q3/2011. DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), reported a negative 4.4% growth to 1.5 Billion Euro, compared to Q3/2010. In the first 9 months of 2011 DMASS reported consolidates sales of 5.02 Billion Euro (+13.2%).

Georg Steinberger, chairman of DMASS, commented on the results: “While 2011 is still set to be a growth year after all, the decline in the summer quarter definitely shows that the overheated market comes back to normal. The next few quarters will be challenging as the comparable basis in the record years 2010 and early 2011 are extremely high. It remains to be determined whether or not the current weakness was just an inventory correction and therefore short-term.”

From all regions, Eastern Europe was the only one still growing in Q3 (15.5% to 228 Million Euro). With -3.7% to 531 Million Euro, Germany held strongly against the current weakness in Western Europe, as did France with -5.2% to 104 Million Euro. UK & Ireland declined by 7.5% to 128 Million Euro and Italy by 11.1% to 136 Million Euro. All other regions declined between 7.5% (Nordic) and 19.1% (Austria).

Georg Steinberger: “While the majority of Eastern European countries are low-cost manufacturing-driven, Russia is the only one genuinely growing out of its own market demand. Interestingly, the Baltic countries play a more prominent role now with manufacturing shifts from Scandinavia.”

As the decline overall was moderate, the different product areas more or less fell in line with declines mainly in the single-digits. On a positive note, Other Logic still grew by 17%, followed by Fibre Optics (9%), Power (3.6%), Flash Memories (3.2%) and LEDs (1%). While Discrete Total (-2.2%) and Opto Total (-3.8%) declined moderately, Memory Total (-10.9%) and Programmable Logic (-14.6%) dropped over-proportionally. Analog and MOS Micro as the biggest product areas for distribution shrank by 6.9% and 2.2% respectively.

Georg Steinberger concludes: “As already confirmed in previous quarters, the focus of distribution on design-intensive products is apparent throughout 2011. Within the strongest product areas, high-tech products growth like in high-end micros, advanced analog and power supersedes the growth in commodities. This contradicts the standard believe of many customers of distributors being merely fulfilment houses of manufacturers.”

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.