The European semiconductor distribution industry continued on a solid yet slow growth path through Q2/2018. Despite (or because of) severe allocation issues in many key technologies and products, the market according to DMASS*, grew 5.7% in Q2/2018, to 2.32bn Euro.
Commented Georg Steinberger, chairman of DMASS: “A record quarter, no doubt, but in times of allocation you would have expected more dynamics in the market. It is a bit of a paradox, but it seems that the massive shortage in capacitors with no end in sight is starting to limit growth potential in semis, as customers do not want to build inventory that cannot be put to production. It also seems that the growth is mainly driven by price rather than volume.”
Regionally, the clear growth leaders were low-cost manufacturing regions or countries, with the exception of Austria and Benelux. While UK and France grew around the average, Italy ended shy of double-digit.
After a solid Q1, Germany only grew by ~2% in Q2. Nordic countries on average grew by 8.1% while Eastern Europe steamed ahead with 14.4% plus. In numbers, Germany posted 671m Euro sales, Italy by 9.2% to 224m Euro, UK by 6.9% to 166.9m Euro, France by 5.4% to 161m Euro, Nordic by 8.1% to 200m Euro and Eastern Europe (w/o Russia) by 14.4% to 386m Euro.
Steinberger observed, “It is always hard to judge the market by quarter, if you find a lot of side-effects like channel-shifts, exchange rate and allocation. However, the long-term trend is clear: low-cost manufacturing regions continue to win, while the major markets tend to stall at a high level.”
Product-wise, the surprising strength of commodities were the highlights of Q2. Discretes, Power Discretes and Sensors grew in double digits, so did some programmable Memory technologies, Standard Logic, MPUs and High-end-MCUs. At a product group level, Discretes grew by 20.2% to 138m Euro, Power Discretes surged 16.4% to 245m Euro, Opto edged up 3.8% to 223m Euro.
Analogue ICs grew 3.2% to 679m Euro, Memories rose 5.5% to 194m Euro and MOS Micro progressed 6.4% to 479m Euro.
Programmable Logic declined by 3.4% to 150 Million Euro and Other Logic by 4.3% to 115 Million Euro.
“Technologies at the moment do not really allow a proper trending or a conclusion on end markets,” said Steinberger. “The only two positive constants for the last quarters were Power Discretes and 32-Bit-Micros (MPU and MCUs), the latter one looking like a generation shift from 8- and 16-Bit as well as from DSPs towards standard architectures like ARM. In general, too much depends on other than demand-creation-based factors to see a real trend. Given the supply situation, 2018 should provide mid-to-high single-digit growth for the industry.”
*DMASS claims a coverage of 80 to 85% of European Semiconductor DTAM.)