Slow demand, combined with general economic uncertainties produced a slow start for the European component market in the first quarter of 2020.

And then came the global pandemic a.k.a. COVID-19 to dampen any potential spark.

As DMASS gloomily reports sales in the European Semiconductor Distribution Market fell by 11.7% to 2.19 billion Euro.

Says Georg Steinberger, chairman of DMASS: “Predictions are difficult, particularly about the future… while our expectation was clearly that Q1/2020 would not be a new record, we deemed it to be the end of the last down cycle. COVID-19 is not only assaulting the health of people around the world, it has created a situation where economies will suffer for some time. The shutdown in many countries and the slowdown of industrial production is affecting the electronics industry quite severely, with the biggest impact yet to come in the next quarters. What it also did was distort the visibility in the supply chain, which makes it hard to predict what the industry might need in the next few quarters.”

Country-wise, the results in Q1/20 are quite diverse.

While France, UK, Nordic and Benelux show above average decline, Germany ended at average and Eastern Europe did much better.

UK sales plummeted 19.4% to 129 million Euro, Sales in Germany drooped 11.8% to 646 million Euro, France plunged 17.7% to 140 million Euro. Nordic sales off a cliff finishing 38% down at 154 million Euro.

Surprisingly sales in Italy fell just(!) 6.5% to 203 Million Euro, while Eastern Europe showed a 4% decline to 389 million Euro

Only a few countries showed positive numbers.

Steinberger remarks, “Same old, same old – Germany right at the average, Eastern Europe gaining more traction, Southern Europe surprisingly resilient and the rest struggling. We have yet to see how 2020 unfolds, as usual there could be surprising effects. Also, not to be forgotten should be the fact that some DTAM has been turned into direct business by manufacturers, strongly visible in the Nordic numbers.”

On the product side, the positive news is that some product areas were not as heavily affected as the others. Commodities such as Discretes, Analogue, Memories and Standard Logic were impacted more.

As the biggest product group, Analogue ICs declined by 12.2% to 647 Million Euro, MOS Micro fell 9.9% to 427 Million Euro, Power Discretes dropped 10.3% to 247 Million Euro, Opto weakened 6.3% to 202 Million Euro, and Memories sagged 18.2% to 186 Million Euro.

Programmable Logic dwindled 6.2% to 155 Million Euro, Advanced Logic fell by 8.6% to 119 Million Euro and finally, Discretes slid 24.9% to 114 Million Euro.

Adds Steinberger: “After one quarter, the only indication of a slight trend is that commodities have struggled more than complex products, which is no surprise in a downturn and can easily change. Notable may also be the fact that MCUs have done significantly better than Microprocessors or DSPs.”

As for 2020, Steinberger dampens his previous optimism: “At the beginning of the crisis, it was the disruption of production in Asia that was a concern, now it is the other end of the supply chain – the customers and their uncertainties in their end markets. The loss of visibility both from a customer side and at the supplier end will undoubtedly lead to a few quarters of head scratching. While governments jump to rescue the economy, it would be wise to look at the long-needed innovation of public infrastructures for a more sustainable basis, which in turn could drive a lot of growth for the digital industry.”


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