European Semiconductor Distribution (DMASS)
Reports Double-Digit Decline in Q4
DMASS reports -16% in semiconductor revenue in Q4/2019. 2019 ends with moderate decline of -4.4%. Lack of demand occurs across most countries and product areas.
London, February 14, 2020 – The lack of demand that was visible during the second half of 2019 materialised in Q4 with a steep decline of semiconductor revenues in European Distribution. According to DMASS Ltd., sales in the European Semiconductor Distribution Market fell by 16% to 1.95 Billion Euro. 2019 ended with a relatively moderate decline of 4.4% and 8.88 Billion Euro.
Georg Steinberger, chairman of DMASS: “The level of slowdown in Q4 is just a reaction to the low bookings in the previous quarters. And without DTAM to TAM conversion happening during 2019 (suppliers taking distribution business direct) the distribution market would have been flat, which is positive, considering that the overall components market (OEM and Contract Manufacturers) suffered more. With major macro-economic effects hopefully going away in Q1/2020, we could have expected a return to growth soon enough, a hope that the corona virus outbreak in China now renders unachievable. The importance of China for the global electronics supply chain is critical and ramifications are nearly unavoidable.”
At country and region level, the downturn basically crossed all borders, save a few smaller countries in Eastern Europe. Of the major countries, only UK declined less than 10% in Q4. Through the year, the situation was more balanced. On an annual basis, Germany declined 6.9% to 2.57 Billion Euro, Italy by 9.3% to 747 Million Euro, the UK (without Ireland) grew by 0.7% to 612 Million Euro, France went down 7.2% to 591 Million Euro, the Nordic Countries declined 2.7% to 795 Million Euro and Eastern Europe grew 1.75% to 1.54 Billion Euro.
Georg Steinberger: “Within the context of the whole 2019 decline, no material trend changed: Eastern Europe continues its momentum as contract manufacturing base, the North, Central and South remain in waiting position. And as stated before, the UK seems to be unfazed by Brexit.”
Product-wise, in the fourth quarter the downturn affected all product groups with more or less force, not surprising as the lack of demand grazed all industry segments likewise and distribution is involved everywhere, with the entire portfolio. On an annual basis, Discretes shrank by 9.3% to 490 Million Euro, Power by a rather moderate 0.4% to 993 Million Euro, Opto by 5.5% to 802 Million Euro, Analog (in line with the total decline) by 4.2% to 2.6 Billion Euro, Memories by 3.8% to 803 Million Euro, MOS Micro by 7% to 1.75 Billion Euro and Programmable Logic by 6.6% to 577 Million Euro. The only major Product group that grew was Other Logic (ASSPs, ASICs etc.), by 9% to 511 Million Euro.
Georg Steinberger: “On the product side, the notable exceptions to the slump were Power and Other Logic, both in heavy need of technical support and engineering, which tells that distribution is better by far in complex demand creation areas than commonly believed. We also see that the once equally sized markets of Analog and MOS Micro products have a different trajectory in terms of technical and price development. Very often the Analog BOM (Bill of Material) of an application is more costly than the Microcontrollers and Logic.”
As for 2020, Steinberger maintains his cautious optimism: “No one counted with the virus as a new disruption to the market, however we have to see what supply chain effect it has on this and the next quarter. The opportunities for innovation and therefore components business are still marvellous for years to come.”
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 34 active members in 2019 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.