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Components | February 16, 2012

European semi distribution sees further market weakness

European semiconductor distribution shrinks by 9.1% in Q4/2011. Eastern Europe remains at growth mode. Total year 2011 remained positive.
The European Semiconductor Market experienced an ongoing cyclical correction at the end of 2011. DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), reported a decline of consolidated sales of 9.1% to 1.35 Billion Euro, compared to Q4/2010. The total year ended with an increase of 7.6% to 6.37 Billion Euro.

Georg Steinberger, chairman of DMASS, commented on the results: “As expected, 2011 remained positive and set another sales record for semiconductor distribution. However, the last quarter displayed very precisely the current market trends of cautious ordering behaviour in some and inventory corrections in some other industry segments. The two halves of 2011 couldn’t have been more different, from 23% plus to 7% minus. Predictions under the current climate would be dangerous, but I would not be surprised to see exactly the opposite in 2012 – weak first half and stronger second half.”

Regionally, there some islands of growth still in Q4, mainly in Eastern Europe and due to some unusual effects in Nordic (Sweden), but the main regions were all declining, between 7.5% (UK) and 25% (Austria). Germany declined by 12.7% to 434 Million Euro, Italy by 17.7% to 118 Million Euro, the UK by 7.5% to 117 Million Euro and France by 14.5% to 96 Million Euro. Eastern Europe grew by 3% in total to 209 Million Euro, Nordic by 4.8% to 142 Million Euro.

Georg Steinberger: “Eastern Europe remains driven by low-cost manufacturing and benefits from ongoing production transfers. The Baltic countries have begun to play a more prominent role now with manufacturing shifts from Scandinavia, therefore DMASS will change the reporting in the future and count the Baltic states into the Nordic bucket.”

On the product side, neglecting the aforementioned unusual effects, the decline was across the board, between -5.8% for Memories (to 119 Million Euro) and 21.8% for Standard Logic (24 Million Euros). Analog ICs, by far the biggest product group, dropped by 14.2% (359 Million Euro) and MOS Micro by 13.2% to 279 Milion Euro. Power dropped by 10.1% to 137 Million Euro, Opto by 9.9% to 114 Million Euro and Programmable Logic by 7.9% to 125 Million Euro.

Georg Steinberger concludes: “Today, significantly more than 50% of the Distribution business comes from design-in efforts with customers across industry segments. It is apparent that the classical model has changed to a more advanced and all-encompassing support model.”

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