Electronics Production | February 09, 2007

European Semiconductor<br>Distribution slowed down in Q4

11,3% growth in the fourth quarter. 2006 shows annual growth of 17% versus 2005. Despite slowdown distribution market remains robust. Eastern Europe and Germany outperform market. Analog, Memory and MOS Micro dominate.
2006 proved to be an extremely solid year of growth for the European semiconductor distribution industry. According to DMASS (Distributors' and Manufacturers' Association of Semiconductor Specialists), the semiconductor distributor and manufacturer members achieved an annual growth of 17% to 5.4 Billion €. With that, DMASS exceeded its former record year of 2000 and gained against the total market. Last quarter's sales were recorded as 1.27 Billion € (+11.3% over Q4/05).

DMASS only reports industrial semiconductor sales, defined as all semiconductors, excluding the PC channel.

Anne Vernay, Chairwoman of DMASS, commented: “DMASS members are very pleased with the results of 2006, especially since we were able to beat the historical levels of 2000. With 17% growth, distribution clearly outperformed the OEM market in Europe in 2006. Last quarter's 11.3 % growth was achieved against a very strong Q4 in 2005 and wouldn't strike me as a slowdown, rather a soft landing. The challenge in 2007 will be to perform against a record year in comparison, with a softer environment for growth."

Regionally, the overall picture of 2006 repeated itself also in the fourth quarter. Germany as the biggest region grew again way above average (16.4%) and reported 393 Million € of sales.
• On an annual basis, Germany represents 32% of DMASS Total or 1.7 Billion € (a 21.9% growth over 2005).
• Eastern Europe showed similarly strong growth patterns, with a consolidated growth in 2006 of 26.9% to 507 Million € (Q4: 29.8% growth to 135 Million €).
• Of the other bigger regions, Italy grew by 14.5% to 710 Million € in 2006 (Q4: 10.4% to 160 Million €), UK by 8.6% to 606 Million € (Q4: a meagre 0.3% to 142 Million €), France by 9.1% to 496 Million € (Q4: 5% to 113 Million €) and finally Nordic (Scandinavia) by 16.1% to 498 Million € (Q4: 6.7% to 123 Million €).
• On an annual basis, the highest growth rates were recorded for Russia (44.3%), Czech Republic (33.3%), Denmark (29.9%), Germany (21.9%) and Israel (21.6%).

Anne Vernay: “Germany remained the stronghold of growth in European distribution. And Eastern Europe slowly but steadily grows into the top 3 ranks of regions, besides Germany and Italy."

Looking at product sectors, Analog products and MOS Micro products were the clear winners. Analog showed a growth of 21.6% year over year (to 1.34 Billion € or 25% of DMASS Total). MOS Micro grew 21.4% to 1.47 Billion €, which represents 27% of DMASS Total. On an annual basis, the strongest growth rates appeared in DSP (38.4%), SRAMs (35.9%), Other Memories (32.8%), Standard Logic (28.2%), Standard Analog (25.4%) Power MOSFETs (24.6%) and Microcontrollers (21.4%). The only products in decline were EPROMs (-22.6%), Other MOS Logic (-20.7%) and Fibre Optics (-1.15%).

Vernay concluded: “In 2006, we saw a solid growth across almost all product ranges. This is a good sign that distribution gains momentum across industry segments and technologies. Many of the high-growth areas are complex and design-intensive technologies that need appropriate support. The fact that distribution is growing exactly here, proves that demand creation has become the strength of distribution."


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