Signs of a seasonal weakness occurred in semiconductor distribution during the Spring quarter. According to DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), sales in the second quarter grew by 2.15% to 1.86bn Euro in Q2/CY16 over the same quarter last year. Currency effects have eased out in the meantime.

Georg Steinberger, chairman of DMASS commented: “The second quarter ended a bit below our expectations, but bookings are still holding up. The first half of 2016 ended with a healthy 5.2% growth at the EMEA level. We would expect 2016 in total to remain solidly positive, as the slowdown did not occur across the board but was driven by a few special effects, like business having been taken direct by some manufacturers.”

Regionally, the differences in Q2 performance were considerable. While Eastern Europe, Germany, Austria, Iberia and Turkey held up quite nicely, France and Italy finished on average and the UK, Switzerland, Norway, Sweden, Belgium + Luxembourg, Russia, Poland and Israel came back negative. Germany, by a country mile the largest market, grew 5% to 575 Euro, while Italy nudged ahead 2.3% to 182m Euro.

The UK market slipped 1.7%  to 141m Euro which means France is breathing down its neck on 137m Euro, an increase of 1.6%.

Nordic sales plunged 10.7% to 161m Euro and Israel suffered a 5% decline to 68m Euro.

Observed Steinberger: “What we are seeing from a regional perspective is a weakening market in the UK, more production transferring from Nordic to Eastern Europe and strong growth in some low-cost manufacturing countries in Eastern Europe. There is a lot of movement but, on the positive side, Germany returns a healthy, organic growth and so does Italy. The question is ‘are we seeing now the end of a long positive streak for distribution or is it just a normal slowdown’? I would tend to believe that in spite of a slowdown, the opportunities for organic growth are still excellent in the mature economies.”

On the product-side, the picture is as mixed as at the regional view. While Power, Sensors, Opto and MCUs grew way above average, Discretes (here RF) and Logic returned negatively. Analogue and Memory grew slightly above average. In detail, Analogue products grew by 3.8% to 559m Euro, MOS Micro was up 3.9% to 387m Euro. Optoelectronics sales rose 9.9% to 198m Euro, and Power turned in a 6.3% uptick to 185m Euro. Memories grew 3.2% to 146m Euro.

Discretes tumbled 4.2% to 96m Euro, Programmable Logic plummeted -14.8% to 123m Euro and Other Logic fell 9.5% to 91m Euro.

Steinberger concluded: “There are clearly some special effects at work that hit some distributors in certain product areas, like RF, Programmable Logic and Other Logic, some of which are due to manufacturers having taken distribution business direct. Without these effects, Q2 would have ended at around 4%. However, that is part of the game.”



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