European semi distribution outperforms expectations

European components distribution reported massive growth in Q421 and ended the full year at new record sales levels, says industry organisation DMASS

Semiconductor sales –as reported by the members of the industry body – grew 39.4% YoY to a new record level of EUR 2.62 billion. IP&E (Interconnect, Passive and Electromechanical) components grew by 39.5% to EUR 1.13 billion, also a new record. In total, across all components, distribution sales in 2021 grew by 25.4% to over EUR 13.9 billion.

“We have seen similar or higher growth rates in distribution in the past, but the sales levels we have achieved in 2021 are unprecedented. Considering that the pressure in the components market is still on – represented by extremely high bookings, huge backlogs and lead-times well into 2023 – our optimism for the new year is accompanied by some concern about the effects of the shortage on the growth rates of our customers,” says Hermann Reiter, chairman of DMASS, in a press release.

The chairman also points out that while growth opportunities are huge, so are also the accumulated risks – such as double-ordering. Not to mention potential new risks, such as further pandemic-related supply chain disruptions and geopolitical conflicts.

Semiconductors

Digging deeper into the numbers from DMASS, we see that semiconductor distribution in the different regions and countries across Europe experienced a rather large spread of growth rates during the last quarter of 2021, ranging from 16% to 55%. 

The major countries however, all ended up in the same zone. Germany grew by 44.4% to EUR 707 million, Eastern Europe by 30.5% to EUR 467 million, Italy climbed a whopping 50.9% to EUR 233 million, France by 43% to EUR 170 million and the UK by 42.8% to EUR 174 million. At an annual level, almost all countries grew by a double-digit percentage.

Product and product group-wise, Memories were the fastest growing semiconductor product group during the quarter, DMASS reports pointing to an increase of 64.3% to EUR 284 million. The group was followed by Discrete with 54.9% growth and total resales of EUR 155 million. The major product groups, Analog and MOS Micro, grew by 39.3% and 34.5% respectively to EUR 729 million and EUR 517 million respectively. 

DMASS also reports that Power, Sensors and Standard Logic remained above average with Opto, Other Logic and Programmable Logic were below average. At an annual level, the big winners were however, Discretes, Memories, Sensors and Power Devices.

Interconnect, Passive and Electromechanical Components

Looking at Interconnect, Passive and Electromechanical (IP&E) components we see parallels to semiconductors and the group even outgrew them on an annual level. An annual growth of 32.1% to EUR 4.36 billion represents a new record since the start of IP&E reporting. In Q4, IP&E grew 39.5% to EUR 1.13 billion Euro. 

Regional growth was equally spread, except for a trailing Russia, DMASS says. On the product side, Passives remained the biggest group, with an increase of 40.6% to EUR 534 million, followed closely by Electromechanical products (including Connectors) which grew by 38.7% to EUR 525 million. Power Supplies (including Batteries), the smallest group, remained steady at 36.9% growth and EUR 68 million turnover. At an annual level, both Passives and Electromechanics, showed a balanced growth performance.

“Great to see our market performing so well, we out-performed our recent expectations by some degree. It was interesting to see that IP&E sequentially fell back behind Q3 while Semis remained strong through the year-end.We expect 2022 to be another strong year and would hope that supply chain issues, as recently reported from China, with production stops due to CoVID-19 infections, will evaporate soon,  Hermann Reiter concludes.