The European semiconductor distribution market seems to have seen the worst decline in 2020 and is set for a return to growth and shortages in 2021 says market analysis group DMASS.
Sales in the European Semiconductor Distribution Market fell by 3.8 per cent to €1.86bn in the last quarter, giving total sales of €7.7bn, down 12.7 per cent. The UK was the most badly hit in the quarter.
“While the second wave of the Covid-19 pandemic is still in full swing and transportation hurdles make it difficult to get high-tech goods into Europe in time, the demand of customers – particularly in the automotive sector – is growing strongly,” said Georg Steinberger, chairman of DMASS, which represents 85 percent of chip makers and distributors in Europe. “Longer lead times and price increases from manufacturers will likely dominate the first half of 2021. It remains to be seen if the extremely high bookings level is sustainable beyond summer.”
Germany again declined more than the average in the last quarter, by 8.2 per cent to €487m. Italy did considerably better, with a decline of only 3.9 per cent to €153m. France declined by 10 per cent to €117m, and the UK, despite some Brexit-related pre-shipping, dropped by 15.1 per cent to €118m
The Nordic countries saw a 5.7 per cent drop to €146m, but the entire East region, including Eastern Europe (+2.3 per cent to €356m), Israel and Turkey grew, as did Benelux, with +14.7 per cent to €70m.
“The most conclusive insight from the data is that, wherever there is strong contract manufacturing, the market recovers faster,” said Steinberger. “The second obvious development is that Germany, as a stronghold for the European market, gets smaller, in part driven by increased outsourcing to Eastern Europe. So far, the UK has been spared any significant Brexit effect although we will no doubt see more impact as 2021 progresses.”
From a product perspective, Q4 showed some positive development in Discretes, Power and Sensors, as well as in Flash Memoríes and Microcontrollers, while most other products – Opto, Analog, Memories and Other Logic (ASSPs etc.) saw average declines.
“In general, if there is a trend to be seen at all, it seems that in 2020 standard products lost more than complex products or technology categories that require more support,” he said.
“As with the overall market, 2020 was a year of significant double-digit decline for distribution. However, we see that bookings are strong and demand is returning, with some likelihood of shortages through the first part of the year.
Related DMASS articles
- ISRAEL SHRUGS OFF COVID-19 AS EUROPEAN DECLINE SLOWS
- COVID-DRIVEN UNCERTAINTIES MAKE FOR DIFFICULT GUESSES
- POWER, ANALOG AND LOGIC HOLD UP IN MARKET SLOWDOWN
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