Q1/2021 - European Semiconductor Distribution (DMASS) starts Flat into 2021

DMASS reports -1.6% in semiconductor revenue in Q1/2021. COVID-19 impact disappeared. Availability issues limited growth.

London, May 14, 2021 – The European semiconductor distribution market started with a “flat tyre” into 2021, despite a significant increase in bookings since last quarter. According to DMASS Ltd., sales in the European Semiconductor Distribution Market fell by 1.6% to 2.17 Billion Euro. Sequential growth of 15.6% (against Q4/2020) indicates strong turnaround.

Georg Steinberger, chairman of DMASS: “While 2020 certainly was influenced by the COVID-19 pandemic and Brexit anxieties, these factors seem to have disappeared completely from the current market development. Now, it is all about components shortage and strategic dependencies on Asian production. Booking levels are crazy and availability has become a revenue-limiting factor for distribution and their customers. The sequential growth indicates the direction the rest of the year might take.”

At a country or region level, the market situation varies significantly and does not show any clear direction. While Eastern Europe, UK, Italy, Switzerland, Nordic and Benelux showed positive development, Germany, France, Iberia, Israel and Russia declined in the low to high single-digits. Germany ended with a decrease of 8.7% and 594 Million Euro. France declined by 5.9% to 135 Million Euro, while the UK increased by 8.7% to 143 Million Euro. Italy went up by 3% to 212 Million Euro. Eastern Europe continued to grow in a stable way by 3.2% to 398 Million Euro and the Nordic region by 4.9% to 164 Million Euro.

Georg Steinberger: “Q1 is not really a great trend indicator, considering the major sequential swing and the giant semiconductor shortage, accompanied by significant price increases. As it stands, the current constraints may last well into the later part of 2021, if not beyond.”

Evaluation at a product group level is similarly difficult, and can be summarised in one word: disparity. While for example Discretes, Power and Sensors grew nicely, Opto, Analog and MOS Micro declined slightly and Programmable Logic, Other Logic and Standard Logic tanked. Ranked by size, Analog components declined by -3.8% to 627 Million Euro and MOS Micro by -0.7% to 430 Million Euro. Power grew by 6.8% to 266 Million Euro, Opto stayed flat with -0.3% to 205 Million Euro and Memories grew by 1.2% to 191 Million Euro. Discretes grew by 14.6% to 130 Million Euro and overtook Programmable Logic, which decreased by 20.5% to 124 Million Euro. Other Logic recorded a decrease of 13.7% at 105 Million Euro and finally Sensors increased by 15.7% to 64 Million Euro.

Georg Steinberger: “Funnily enough, some standard products like Discrete and Power did much better in Q1 than Logic in general or Analog, quite the opposite of last year. However, with a market in turmoil (or boost mode, depending from which perspective you view it) the situation will change during the course of the year. And, as the sequential growth shows, the limiting factor in the coming months may be availability rather than demand.”

“What 2021 will bring is more of what we have seen for a few months, which is over-the-top bookings, price increases, shortage and a reconciliation of procurement strategies to longer-term ordering. The furore with which politics are now trying to tackle the dependency of Europe on Asia when it comes to semiconductor production shows the strategic significance of this technology for many sectors of the European industry. It can be expected that the shift in awareness will not have any short-term impact on supply.”

DMASS Ltd. reports to members only statistics on Interconnect, Passive Components, Electromechanical Components and Power Supplies (IPE).