The European semiconductor distribution market has posted record growth in the second quarter of 2015.
According to DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), semiconductor distribution sales in Q2/CY15 grew by 16% to 1.86bn Euro.
A significant part of the increase is again coming from a Euro/US-Dollar swing – a 20% lower Euro drove price increases, accumulated exchange rate effect of other currencies versus the Euro and a higher valuation of transaction performed in US Dollars.
Georg Steinberger, chairman of DMASS, commented: “Although 16% sounds like a healthy increase, we have to keep in mind that not all of it comes from higher demand or organic growth opportunities, but from financial effects. We will see this effect weaken over the course of the year. Halfway through 2015, it seems clear that European distribution will enjoy a double-digit growth across the entire year, provided no massive macro effect will drive the second half into the corner. It remains to be seen how the European export is affected by the weakening of the Chinese expansion.”
Regionally, all countries or major regions except Germany and Russia enjoyed the continued upswing, led by Israel (48%), Turkey (33%) the Nordic Region (31%) and Eastern Europe (29.5%) The major regions clustered around the average growth: the UK grew by 17% to 153m Euro, France by 18.3% to 145m Euro, Italy by 13.6% to 183m Euro, Nordic by 31% to 185m Euro and Eastern Europe by over 29% to 238m Euro. Germany, by far the largest region, only reported a 5.9% growth to 546m Euro. Russia, hit hard by the trade embargo, was the only country to report negative numbers.
Georg Steinberger: “We have seen the currency effects playing out differently throughout the regions, with Italy and Germany obviously affected most by the weaker Euro. This will most probably balance out toward the end of 2015, when the difference between Euro and Dollar will become less of an issue.”
On the product side, there was a clear trend towards more complex components and lower growth of many commodity products (although also distorted by the currency swing): With 41%, Other Logic grew fastest to nearly 100m Euro, followed by Programmable Logic which grew 26% to 150m Euro. Memories rose 16.3% to 143m Euro, Discretes jumped 17.1% to 105m Euro and Sensors grew 17.6% to 41m Euro. Analog component sales were up 15.3% to 543m Euro and Optoelectronics leapt 15% to 191m Euro. Below the quarter average were MOS Micro at 13.9% to 384m Euro, Standard Logic up 8.7% to 32m Euro and Power up 5.3% to 171m Euro.
Commented Steinberger: “In a nutshell, there is a clear difference between high end products and most of the commodities. While standard products lacked in dynamics, the higher end logic, programmable products and MOS Micro products certainly thrived. When the currency effects subside towards the end of 2015, we may again see meaningful organic growth numbers at product level.”
DMASS has started to report on Passive Components, Electromechanical Components and Power Supplies as well, to complete the distribution market picture. Due to the early stages of the reporting, numbers will only be shared among the reporting members. Georg Steinberger onserved: “We still work on DMASS IPE coverage and memberships (distributors and suppliers). It took us 25 years with semiconductors to become the default on distribution reporting, so it may take a while to get there with IPE products.”