Israel shrugs off Covid-19 as European decline slows

Israel shrugs off Covid-19 as European decline slows

Business news |
By Nick Flaherty

The European Semiconductor Distribution industry saw an easing of the Covid-19 market decline in the third quarter of 2020, with Israel bucking the trend with a 17 percent increase.

Sales in the European Semiconductor Distribution Market fell by 12.1 percent to €1.85bn, compared to a decrease of 20.7 percent in Q2 says DMASS, which covers around 85 percent of the market.

“With the second wave of the Covid-19 pandemic now rolling over Europe and many countries going for anything between full and soft lockdown, it is hard to interpret what the Q3 numbers really meant, but it will be even harder to predict what will happen in Q4 and in 2021,” said Georg Steinberger, chairman of DMASS. “From our perspective it really seemed that -12.1 percent decline is actually not that bad, given that compared to Q2 revenues actually grew. We saw slight improvement across the board and a positive booking situation. Now we hope that the current wave will not affect the high-tech industry in the same way as did the first wave in Spring 2020.”

At a country or regional level, Q3 displayed every scenario, up 17 percent in Israel and down nearly 30 percent in the UK.

  • Germany landed close to the average and declined 13.5 percent to €534m,
  • Italy shrunk by 16.7 percent to €141m,
  • France dropped by 16.9 percent to €109m.
  • The UK dropped by 27.4 percent to €116m
  • Eastern Europe declined by 11.8 percent to €334m
  • The Nordic countries dropped by 24 percent to €139m

The growing markets were Benelux, up 6.1 percent to €67m and Israel with +17 percent to €78m. Positive developments were also seen in Ireland, Switzerland and Turkey said DMASS.

“Compared to Q2, there was in total more positive news than expected at a single country level, however the general trend in the majority of major markets is still concerning, specifically in the UK and Nordic, although reasons might be completely diverse,” said Steinberger.

In the product groups, Analog declined by 11.6 percent to €548m, MOS Micro by -8.4 percent to €382m, Power Discrete by -13.3 percent to €208m, and Opto by -9.3 percent to €173m.

“It is nearly impossible to read a trend out of this quarter. On a year-to-date basis, you could argue that some areas like MCUs, Opto, Other Logic or Sensors are less affected, while Memories, Standard Logic, Discretes, Power and Analog found themselves in the centre of the Covid-19 impact,” said Steinberger. “2020 will be a year of significant double-digit decline for distribution, and since the pandemic is anything but over, further effects might occur during the next quarters. While the hope of recovery is big for 2021, it may take a while until it starts. Hopefully, some political developments can help global and European trade pick up speed again, provided society gets control over the Covid-19 situation.”

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