European Semiconductor Distribution Market (DMASS)
Picks Up Steam Again
Growth of semiconductor distribution accelerates during Q4. Driving forces in Eastern Europe. Technically, MOS Micro and Logic stand out.
London, February 23, 2017 – 2016 started as a dynamic year and petered out over summer, but turned back into growth mode with an unusually strong Q4 for the European semiconductor industry. According to DMASS Ltd., the quarter ended with 1.79 Billion Euro in sales, 5.8% higher than Q4/CY15. The full year ended at sales of 7.4 Billion Euro, which represents an increase of 3.8% over 2015.
Georg Steinberger, chairman of DMASS: “Surely, there were also slight technical effects at work in Q4, like a few more working days. However 80% of the growth of almost 6% seems organic. An encouraging sign for 2017, as we are looking at strong bookings. What is still of concern is the fact that the overall semiconductor market does not really grow and that the pressure on the distribution channel remains unprecedented. Higher growth has definitely been prevented by price and margin pressure.”
Regionally, the major economies trailed the positive trend in Q4. The growth drivers were predominantly countries in Eastern Europe, Israel, Russia, Turkey and Rest of EMEA, while Germany, the UK and France grew slightly below average. Nordic, Benelux and Italy even went backwards. Germany grew by 3.1% to 533 Million Euro, Italy shrunk by 1.7% to 147 Million Euro, the UK and Ireland grew by 4.3% to 135 Million Euro and France by 4% to 128 Million Euro. The Nordic countries shrunk by 14.6% to 151 Million Euro, while at the same time Eastern Europe grew by 16.7% to 281 Million Euro.
Georg Steinberger: “There isn’t a lot of news in the regional development, except maybe the increased shift from Northern Europe to the East and the fact that Russia seems to have overcome somehow the effects of the sanctions. With the German economy being in full swing, it is strange that the growth in high-tech products like semiconductors is rather moderate. However, on an annual basis, Germany stayed at the DMASS average, so warning signs may not really be applicable. We are pretty sure that other growth regions and countries as mentioned above experienced currency gains as they mainly invoice in US Dollars.”
Product-wise, last quarter the tune of growth was certainly digital, with MOS Micro, Programmable Logic and Other Digital Logic leading the way by double-digit increases of revenue. MOS Micro grew by over 13.2%, mainly driven by Microprocessors (non PC) and high-End MCUs, to 395 Million Euro, Programmable Logic by 17.2% to 137 Million Euro and Other Logic by 15.7% to 100 Million Euro. Other products standing out as double-digit growth areas were Fibre-Optics, Other Opto, DRAMs and NAND-Flash. The by far biggest product group in distribution – Analog Products – grew by a mere 3% to 516 Million Euro.
Georg Steinberger: “The danger with products would be to look at quarterly results too seriously, as you can see with above numbers. What grows double-digit in one quarter, could be still trailing the market on an annual basis, like Logic in general. And again, it is quite apparent that some areas of strong growth in the recent path, which seem to have lost steam – like Power, Low-End-MCUs and Analog – are linked tightly to the German market. It remains to be seen if that is a trend or just an occurrence that will disappear in 2017. The only thing clear to us is that 2017 will become a very interesting year, with many changes of structure and policy becoming effective over the next quarters.”
DMASS Ltd. reports to members only a new statistics on Passive Components, Electromechanical Components and Power Supplies.
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 consisted of 35 active members in 2016 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.