COVID-19 has hit the European semiconductor distribution market hard. What looked like a mix of market- and pandemic-driven uncertainties in Q1, turned out to be a real, directly COVID-19 and lockdown-related downturn in the second quarter of 2020.
According to DMASS, sales in the European Semiconductor Distribution Market fell by 20.7% to 1.82bn Euro.
Said Georg Steinberger, chairman of DMASS: “As feared in our Q1 figures, the COVID-19 pandemic and its economic aftermath, starting across Europe in February and March, hit the electronics industry with full force in the second quarter. Manufacturing shutdown, economic uncertainties among consumers and companies and lack of supply chain visibility drove many customers to step on the ordering brake and led to a lot of pushouts on existing orders. Ironically, it could have been worse, and we do not really know what will come at us in the second half of 2020 – Rally or Rafting.”
At a country or regional level, the situation was equally bad across the board and major regions and markets ended with a double-digit decline, except Ireland, Netherlands, Austria and Russia.
Germany plummeted 21.6% to 528 million Euro, Italy ended down19.3% at 161 million Euro, France fell 21.4% to 121 illion Euro, the UK collapsed 23.6% to 119 million Euro. It gets worse. Eastern Europe crashed 30.6% to 279 million Euro and the Nordic countries dived 33.2% to138 million Euro.
Concluded a gloomy Steinberger: “It is almost impossible to find anything positive or less negative in Q2, but clearly countries that are predominantly contract manufacturing-driven suffered most.”
There was no positive news on the product side, except that more design-oriented and exclusive products declined less than standard products.
Of the major product groups, Standard Discrete fell 31.4% to 87 million Euro, Discrete Power declined 23.5% to 196 million Euro, Opto dropped by “only” 17.1% to 164 million Euro, Analogue dipped 22% to 534 million Euro, Memories plunged 32.4% to 141 million, MOS Micro decreased 15.3% to 383 million Euro, Programmable Logic tumbled 12.8% to 128 million Euro, Standard Logic sank 18.2% to 27 million Euro and finally Other Logic descended 14.5% to 112 Million Euro.
“Besides Covid-19, you also see some special effects of product categories slowly deteriorating – arguably legacy technologies like SRAMs and EEPROMs – or disappearing from distribution as an effect of suppliers taking some business direct, like Digital Signal Processors (DSPs),” added Georg Steinberger. “But none of those have a major effect on the totals. However, the fact that standard products are suffering more than expensive specialties is strange, as the financial risk on the customer side is rather low. We will see how this pushback on standard products develops, once the market turns around.”
2020 will be a year of significant double-digit decline, “whether we like it or not”, said Steinberger, “and it could, no, should be the beginning of a reassessment of how we operate as an industry and at a larger scale, as society in general. It is clear that resources become scarcer and the throwaway mentality of the last 50 years will lead to disaster. Technology can play a major part in recreating a sustainable world, but as we can see by its interrupted supply chain, it is also part of the current problem. The big question is: how can the significant influence of technology be used to make changes to a sustainable better world? Can it?”