© dmitry bomshtein dreamstime.com Analysis | May 17, 2021
DMASS: '2021 to bring more of what we've seen'
The European semiconductor distribution market started 2021 with a “flat tyre”, despite a significant increase in bookings since last quarter. According to DMASS, sales in the European Semiconductor Distribution Market fell by 1.6% to EUR 2.17 billion. Sequential growth of 15.6% however, indicates strong turnaround.
“While 2020 certainly was influenced by the COVID-19 pandemic and Brexit anxieties, these factors seem to have disappeared completely from the current market development. Now, it is all about components shortage and strategic dependencies on Asian production. Booking levels are crazy and availability has become a revenue-limiting factor for distribution and their customers. The sequential growth indicates the direction the rest of the year might take,” says Georg Steinberger, chairman of DMASS in a press release. At a country or region level, the market situation varies significantly and does not show any clear direction. While Eastern Europe, UK, Italy, Switzerland, Nordic and Benelux showed positive development, Germany, France, Iberia, Israel and Russia declined in the low to high single-digits. Germany ended with a decrease of 8.7% and EUR 594 million. France declined by 5.9% to EUR 135 million, while the UK increased by 8.7% to EUR 143 million. Italy went up by 3% to EUR 212 million. Eastern Europe continued to grow in a stable way by 3.2% to EUR 398 million and the Nordic region by 4.9% to EUR 164 million. Georg Steinberger: “Q1 is not really a great trend indicator, considering the major sequential swing and the giant semiconductor shortage, accompanied by significant price increases. As it stands, the current constraints may last well into the later part of 2021, if not beyond.” Evaluation at a product group level is similarly difficult, and can be summarised in one word: disparity. While for example Discretes, Power and Sensors grew nicely, Opto, Analog and MOS Micro declined slightly and Programmable Logic, Other Logic and Standard Logic tanked. Ranked by size, Analog components declined by -3.8% to EUR 627 million and MOS Micro by -0.7% to EUR 430 million. Power grew by 6.8% to EUR 266 million, Opto stayed flat with -0.3% to EUR 205 million and Memories grew by 1.2% to EUR 191 million. Discretes grew by 14.6% to EUR 130 million and overtook Programmable Logic, which decreased by 20.5% to EUR 124 million. Other Logic recorded a decrease of 13.7% at EUR 105 million and finally Sensors increased by 15.7% to EUR 64 million. “Funnily enough, some standard products like Discrete and Power did much better in Q1 than Logic in general or Analog, quite the opposite of last year. However, with a market in turmoil (or boost mode, depending from which perspective you view it) the situation will change during the course of the year. And, as the sequential growth shows, the limiting factor in the coming months may be availability rather than demand,” says Georg Steinberger and continues. “What 2021 will bring is more of what we have seen for a few months, which is over-the-top bookings, price increases, shortage and a reconciliation of procurement strategies to longer-term ordering. The furore with which politics are now trying to tackle the dependency of Europe on Asia when it comes to semiconductor production shows the strategic significance of this technology for many sectors of the European industry. It can be expected that the shift in awareness will not have any short-term impact on supply.”