© evertiq Components | February 24, 2017
DMASS picks up steam again
Growth of semiconductor distribution accelerates during Q4. Driving forces in Eastern Europe. Technically, MOS Micro and Logic stand out.
2016 started as a dynamic year and petered out over summer, but turned back into growth mode with an unusually strong Q4 for the European semiconductor industry. According to DMASS Ltd., the quarter ended with EUR 1.79 billion in sales, 5.8 percent higher than Q4/CY15. The full year ended at sales of EUR 7.4 billion, which represents an increase of 3.8 percent over 2015. Georg Steinberger, chairman of DMASS: “Surely, there were also slight technical effects at work in Q4, like a few more working days. However 80 percent of the growth of almost 6 percent seems organic. An encouraging sign for 2017, as we are looking at strong bookings. What is still of concern is the fact that the overall semiconductor market does not really grow and that the pressure on the distribution channel remains unprecedented. Higher growth has definitely been prevented by price and margin pressure.” Regionally, the major economies trailed the positive trend in Q4. The growth drivers were predominantly countries in Eastern Europe, Israel, Russia, Turkey and Rest of EMEA, while Germany, the UK and France grew slightly below average. Nordic, Benelux and Italy even went backwards. Germany grew by 3.1 percent to EUR 533 million, Italy shrunk by 1.7 percent to EUR 147 million, the UK and Ireland grew by 4.3 percent to EUR 135 million and France by 4 percent to EUR 128 million. The Nordic countries shrunk by 14.6 percent to EUR 151 million, while at the same time Eastern Europe grew by 16.7 percent to EUR 281 million. Georg Steinberger: “There isn’t a lot of news in the regional development, except maybe the increased shift from Northern Europe to the East and the fact that Russia seems to have overcome somehow the effects of the sanctions. With the German economy being in full swing, it is strange that the growth in high-tech products like semiconductors is rather moderate. However, on an annual basis, Germany stayed at the DMASS average, so warning signs may not really be applicable. We are pretty sure that other growth regions and countries as mentioned above experienced currency gains as they mainly invoice in US Dollars.” Product-wise, last quarter the tune of growth was certainly digital, with MOS Micro, Programmable Logic and Other Digital Logic leading the way by double-digit increases of revenue. MOS Micro grew by over 13.2 percent, mainly driven by Microprocessors (non PC) and high-End MCUs, to EUR 395 million, Programmable Logic by 17.2 percent to EUR 137 million and Other Logic by 15.7 percent to EUR 100 million. Other products standing out as double-digit growth areas were Fibre-Optics, Other Opto, DRAMs and NAND-Flash. The by far biggest product group in distribution – Analog Products – grew by a mere 3 percent to EUR 516 million. Georg Steinberger: “The danger with products would be to look at quarterly results too seriously, as you can see with above numbers. What grows double-digit in one quarter, could be still trailing the market on an annual basis, like Logic in general. And again, it is quite apparent that some areas of strong growth in the recent path, which seem to have lost steam – like Power, Low-End-MCUs and Analog – are linked tightly to the German market. It remains to be seen if that is a trend or just an occurrence that will disappear in 2017. The only thing clear to us is that 2017 will become a very interesting year, with many changes of structure and policy becoming effective over the next quarters.”
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