Business is booming for the distribution sector. At the ecsn dinner in Brighton last week analyst Aubrey Dunford reported a 17.1 per cent increase in UK/Ireland distribution sales in the first quarter of 2017 compared to last year. Indications are that April sales were eight per cent up.
European semiconductor distribution has also hit the 2017 ground running. According to DMASS , the quarter was10.5% higher than the last record quarter, Q1/2016, clocking up 2.17bn Euro in sales.
Georg Steinberger, chairman of DMASS: “The signals at last year’s end did not really point to such a dynamic growth. Our outlook for 2017 was actually rather modest, given that there were not too many growth signs in the major regions of Europe and considering the macro-economic dangers looming all around us. So, the record quarter came as a bit of a surprise. As to the reason, all industry segments seem to contribute, from automotive to industrial. The bookings are also quite strong, lead-times of various product families are moving out, prices are increasing. All in all, 2017 could bring a strong growth throughout the year.”
Eastern Europe and countries like Israel, Russia and Turkey again led the growth, followed by Iberia and some selected countries in the Nordic region.
The most interesting country in Q1 was Poland, which has become the fifth-largest country in semiconductor distribution in Europe.
Of the major regions, Germany grew below average, but UK, France and Italy remained in the low single-digits. In detail, Germany grew by 7.2% to 650m Euro, Italy by 2.2% to 205m Euro and France was up 3.8% to 152m Million Euro overtaking the UK which grew 3.3% to 151m Euro. Nordic grew by 8.6% to 178m Euros.
Georg Steinberger: “Eastern Europe’s strength is not surprising, given that the majority of the countries there act as lower-cost manufacturing region for Western Europe. The recent years have seen a huge production shift, predominantly from Germany, which explains why the growth in Germany has been rather moderate compared to the dynamics of its entire industry. Anyhow, over the next 12 to 18 months, we expect some serious channel shifts (distribution to direct, but also in the other direction) that could influence the overall development of the distribution market.”
The last quarter was clearly showing a general uptick in distribution friendly products like memories, analogue, MOS micro and logic, followed by power. On the negative side, programmable logic shrunk, discrete and standard logic grew very moderately. Sensors and opto grew nicely but below average. Analogue sales soared 13% to 654m Euro, MOS micro wasn’t far behind at 11.6% to 435m Euro, power grew 11.2% to 207m Euro, memory was up 13.4% to 174m Euro. On the downside programmable logic shrunk by 3.1% to 135m Euro. Other logic rocketed 18.2% to 114m Euro.
Adds Georg Steinberger: “One quarter does not prove a trend, so let us be cautious here with an interpretation. What is interesting, though, is that rising stars like LEDs or Programmable Logic have not participated in this overall upswing last quarter, despite the fact that these technologies appear in many industry segments. It remains to be seen how these fields develop over the course of the year.”