European Semiconductor Distribution (DMASS) expects growth to return in 2010.

EMEA semiconductor distribution sales drop “only” 10.7% in Q4/2009. Record bookings nourish hope of excellent 2010. Worrying lead-time situation remains.  

London, February 22, 2010 – With a total decline of 24%, 2009 proved to be one of the worst years of European semiconductor distribution since the 1980’s. Although the sales drop narrowed over the second half of the year, by a quarterly comparison the distribution market in Europe lost ~40% of its value since record Q1/2007. In Q4/2009, the decline narrowed to 10.7% over Q4/2008 and the quarter ended with 960 Million Euro of combined sales, according to DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists).

Georg Steinberger, Chairman of DMASS, commented: “The worst effects of the crisis seem to be over, for the moment, and our industry returns to its normal cyclical behaviour, from buying freeze directly to allocation. The current booking situation suggests a healthy growth for at least the first half of 2010. And it seems that the current market swing is not entirely driven by inventory correction. Combined with the fact that we are comparing against a very bad year, by all standards, 2010 is set for double-digit growth.”

From a regional comparison perspective, the growth rates in Q4 reached from +0.4% (Iberia) to -17.7% (UK and Rest of Europe) compared to Q4/2009. Germany as the biggest market declined by 9.6% to 314 Million Euro, Italy by 11.2% to 104 Million, France by 15.8% to 78 Million Euro and UK declined 17.7% to 83 Million Euro. Eastern Europe (total) ended at 111 Million Euro (-6.1%) and the Nordic region (Norway, Sweden, Finland and Denmark) at 87 Million Euro (-11.5%). Benelux, Iberia, Poland and Czech Republic even finished positively over Q4/2008.

Georg Steinberger: “A quarterly view does not really reflect the overall situation of one specific country. Over the entire year all regions and countries suffered almost likewise, regardless of the electronics industry structure there. The only country with a less than 10% decline over the year was Poland, but with its heavy dependence on contract manufacturing this could change in a heartbeat, even during a year of recovery.”

The only major product group that suffered less than 20% decline over the entire 2009 was Memories. While Analog, Opto and Programmable Logic all ended up slightly below the average decline for the entire year, Power, MOS Micro and Other Logic landed around the -28% mark. Flash memories (-1.7%), LEDs (-11.6%), DSPs (-15.8%) and RF Discrete (-18.7%) were the products with the least decline over 2009 while DRAM managed 1.5% growth.

Georg Steinberger: “The past product development does not really tell us anything of an industry trend, apart from the fact that EPROMs seem to become a dying technology altogether. The current booking hype goes across all segments and technologies, from commodities to 32-Bit MCUs.”

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 33 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.