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© wrangler dreamstime.com Analysis | August 18, 2017

DMASS packs a wallop in 2Q/2017

The European semiconductor industry shows no signs of slowdown in Q2/2017.
According to DMASS Ltd., semiconductor sales as reported by the members ended with another record of EUR 2.19 billion, an increase of 17.3 percent over the corresponding quarter last year. For the first six months, DMASS reported over EUR 4.3 billion of consolidated semiconductor sales, 14 percent more than the first half of 2016.

Georg Steinberger, chairman of DMASS: “As many market participants feel right now, the dynamic growth over the last nine months was unprecedented. The significant allocations in several product areas make it difficult to predict the rest of the year, but it would be safe to assume that double-digit growth will continue through 2017. DMASS Totals of EUR 8 billion, an all-time record, are in range for the full year. What is surprising, is the fact that the growth impact comes from almost all industry segments, driven by a higher electronics content across many applications.”

Regionally, Poland, Turkey, Russia and Israel lead the growth wave, with increases between 30 and 40 percent. The major regions trailed the overall growth – Germany as the biggest single market grew by 13.7 percent to EUR 653 million, Italy by 13.4 percent to EUR 207 million, the UK/Eire by 9.6 percent to EUR 154 million and France by 8.5 percent to EUR 151 million. Eastern Europe grew by 28.3 percent to EUR 336 million and Nordic by 14.1 percent to EUR 184 million.

Georg Steinberger: “If you look at the growth in Eastern Europe, it is mainly driven by production shifts from Northern and Central Europe. Positively surprising is the resilience of the Italian high-tech market against the domestic economic problems.”

At the product side, the growth is across the board, a sign for healthy market development. Other Logic (application-specific logic) and Memories have seen the highest growth rates, followed by Programmable Logic. All other product segments grew under-proportionally except single product categories like Analog Interface, Flash Memories or High-End-MCUs. Analog ICs as the biggest product group in DMASS grew 16.7 percent to EUR 656 million (this represents 30 percent of DMASS Total). MOS Micro by 15.6 percent to EUR 443 million, Power by 13.1 percent to EUR 210 million, Opto by 10.2 percent to EUR 223 million, Memories by 27.9 percent to EUR 183 million and Programmable Logic by 27.1 percent to EUR 155 million.

Georg Steinberger: “Standing out from the crowd are memory and logic products in general, application specific logic and DRAM particularly. Programmable Logic is experiencing higher growth despite channel shifts from distribution to direct, but this could be seasonal. However, even without these very particular growth spikes, the distribution market in Europe shows healthy double-digit growth. ”

“Looking forward remains difficult”, said Steinberger: “Lovely to see 2-digit growth as record levels continue, but with the challenges ahead on the distribution channel – whether it is business model, margin pressure or regulatory influences – the outlook becomes teeth-grinding. I am sure distribution will master the aforementioned problems and turn them into interesting business propositions for customers.”

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November 14 2017 8:30 PM V8.8.9-1