German distributors see 2024 fall
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After a record year, German electronic component distribution firms see a fall in 2024.
In the fourth quarter, the weak order intake of the last few quarters clearly hit sales with the revenue of FBDi’s registered distributors falling by 20.1% to €1.08bn. Very weak bookings down 56% to €507m and a book-to-bill ratio of 0.47 indicate a difficult market situation for the coming quarters says the German distribution trade organisation FBDi.
Nevertheless the full year 2023 remained positive with 4.4% growth to a record €5.37bn.
The year for distributors was dominated by semiconductors. Although sales in the fourth quarter also fell by 21% to €745m, for the year as a whole they grew by more than 10% to a record €3.73bn.
Passive components and electromechanics performed less well, and have been doing so for some time. These markets shrank both in the fourth quarter and for the year as a whole, with passives down 15.9% to €136m in the fourth quarter (full year: -5.6% to €669m) and Electromechanics down 18.1% to €128m (full year: -7.3% to 620 million Euros). Similar declines were recorded for sensors, displays, power supplies and assemblies. The distribution of sales by component group remained almost unchanged.
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“The figures are not surprising, neither for the fourth quarter nor for the year as a whole,” said FBDi CEO Georg Steinberger. “2023 can be summarized by saying that it already includes a lot of business brought forward from 2024 and was therefore unrealistically high, which is exactly what will be missing in 2024. The next few quarters are likely to see a low level of new orders in the existing business, so the focus should clearly be on developing new designs and projects, which have probably not been a priority for customers due to the difficult delivery situation over the last two years.”
“The positive outlook of most market researchers for 2024 mainly concerns one area that could serve as a driver – memory and processors that support AI applications in data centres,” he said.
“This market is likely to be driven mainly by the US. The reality in Europe is different: We are facing a weakening industrial sector and an automotive sector under pressure, which are the two main customers for components and the main customer groups for distribution. The outlook for Europe this year is therefore rather moderate, with the hope of a turnaround after the summer. Our appeal would be not to get involved in pointless price wars, especially as component production costs are not getting any lower, but to focus on Europe’s innovative strength and inspire the market with new ideas”.
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