According to DMASS, the global economic crisis is hitting the electronics components distribution market with full force.
DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists) is a European non-profit organisation that collates detailed semiconductor distribution market data on a quarterly basis by country and product groups such as microcontrollers, Flash memories, analog components and many more.
Founded in 1989, DMASS provides its members with a reliable statistical tool to evaluate their relative mass-market performance. The organisation currently consists of 33 active members and represents between 80% and 85% of the total European distribution market, depending on the regions.
According to the organisation’s latest statistics, the EMEA region’s downturn trend from the previous quarters continued and in fact accelerated in the fourth quarter of 2008 for which DMASS reported a decline of distribution revenues of 11,4% versus the fourth quarter of the previous year. The combined membership achieved quarterly distribution revenues of 1,09 billion Euros. For the full year, DMASS reported revenues of 5,02 billion Euros, a decline of 7,9% versus 2007.
Georg Steinberger, the new chairman of DMASS, commented, “Components distribution could not escape the general downturn. With the economic crisis expanding far beyond the banking sector into the production industry, customers throughout all industry segments were affected. There is a lack of confidence in a fast recovery, therefore orders are postponed and bookings held back. Inventory levels at customers are extremely low. At the same time, suppliers are reducing capacity and spending for new fabs, so we would not be surprised to see availability trouble as soon as the market comes back.”
All regions were affected, with even Eastern Europe declining for the first time in years, falling 1,4% in Q4 2008 compared to Q4 2007. The only countries with growth over the same quarter in the previous year were Austria, Poland, Hungary and the emerging countries in Eastern Europe. Russia, star of the first half of 2008, had a double digit decline and came out only slightly positive for the full year.
Of the bigger regions, Germany declined least in Q4 (-7,8% to 352 million Euros), followed by France (-9% to 93 million Euros) and the UK (-13,4% to 100 million Euros). The UK also suffers a severe currency effect that diminishes the local market value quite significantly. Italy, the second biggest major region in Europe, took a dive of 20,8% in Q4 to 119 million Euros. All other regions or countries except Israel (-1,9%) and Sweden (-8,1%) declined in double digits. For the full year, Eastern Europe remained positive (5,8%), while Germany only declined by 5%.
According to Steinberger, “This time, there was almost nothing to gain for any region. The food chain of electronics production is so tightly coupled that even the production regions this time suffered almost in the same way as the rest of Europe. But these numbers are the past. Our concerns should be with future developments, and so far, from a booking perspective, 2009 has not started positively. As the end demand normally cannot disappear overnight, our hopes remain strong that the decline in the market is to a large extent panic rather than real.”
Product-wise, all major product groups went down in Q4 compared to Q4 last year – between 3,1% for memories and 17,4% for standard logic. Only slightly affected was programmable logic with -4,2% (102 million Euros), while the biggest sectors reacted differently. Analog components only declined by 9,3% (to 304 million Euros), while MOS micros went down by 14,9% to 254 million Euros. Only three products grew at all in Q4 compared to Q4 last year; these were DRAMs, SRAMs and DSPs. Annualised, all the major product groups were negative, between 5,6% for discretes and 14,8% for standard logic.
“The fact that over the year, the downturn spread evenly across all products and technologies shows that this is a problem for all industries and applications,” said Steinberger. “I continue to believe, however, that fundamentals of the European electronics industry, which is highly specialised and export-oriented, are still right and that Europe will be back on track soon.”
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