DMASS reports a decline of 8.9% in semiconductor revenue in Q3/2019. Germany, France and Italy affected most. Discrete, MOS Micro and Logic shrink double-digit.

The summer quarter of 2019 provided a significant decline in sales for the European components distribution market. According to DMASS, sales in the European Semiconductor Distribution Market fell 8.9% to 2.11bn Euro. The first nine months of 2019 still benefitted from a stronger first half and “only” declined by 0.5% to 6.93bn Euro.

Commented Georg Steinberger, chairman of DMASS: “A slowdown in customer bookings throughout the year now materialised in a not surprising revenue decline. It is a mix of factors that is driving the slowdown – external and internal – and most of them will accompany us for a while. There is more caution and scepticism in the market than necessary, as we think that the opportunities for technology are still great. We expect the market to return during 2020.”

At country and region level, the situation is rather uneven. While in Q3 Germany, France and Italy declined double-digit, the UK actually grew by 1.6% and Eastern Europe held up with 0.5% growth.

Among the major markets, Germany fell by 12.9% to 618m Euro, Italy dropped 13.1% to 168m Euro, France shrank by 15% to 132m Euro while UK sales rose 1.6% to 159m Euro. The Nordic countries (including the Baltic states) by 3.7% to 183m Euro. Eastern Europe edged foreard 0.5% to 380m Euro.

Added Steinberger: “No big change to previous quarters. Countries with a huge share of contract manufacturing continue to grow or at least maintain their momentum, while OEM-driven markets experience a bigger slowdown or lose more business specifically to Eastern Europe, which has a strong contract manufacturing base. The most surprising aspect of this quarter is the resilience of the UK against the current Brexit frenzy.”

The market decline spans all technologies and products. Analogue products drooped 8.65% to 618m Euro, MOS Micro fell 11.7% to 413m Euro, Power Discretes declined 2.6% to 241m Euro, Opto products were down 7.5% to 194m Euro and Memories dipped 6.9% to 195m Euro. Other Logic was a stalwart losing a mere -0.6% to 123m Euro.

“The quarterly view does not really allow much insight as the situation is different in almost every country,” is Steinberger’s assessment. “Over the first nine months however, we see that some areas are over-proportionally weak – like Discretes, Opto, MOS Micro, Standard Logic and Programmable Logic, while Analogue, Memory and Power hold up nicely. What is hard to estimate is the impact of suppliers taking business from distribution direct. We know that areas like Analogue, Programmable Logic or MOS Micro are affected by it and will be more so in the future.”

With 2019 almost done and most probably finishing slightly negative, the question is what 2020 will bring.

Says Steinberger: “We believe that we will see more disruptive innovation in the next few years and more opportunities for Distribution.”


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