LONDON The European Distributors’ and Manufacturers’ Association of Semiconductor Specialists (DMASS) has seen the steepest decline of semiconductor distribution revenue since the Internet bubble burst in 2001/2002.
No region or technology was spared in the first quarter of 2009 which ended with consolidated sales of DMASS members through distribution of €992 million (about $1400 million), the lowest quarterly result since Q4/2003. Compared to Q1/2008 this represents a decline of 26.3 percent.
All regions were affected almost equally. Instead of winners, the market had from a regional perspective at best some 'luckier losers'. Of the major countries only France declined less than 20 precent (-17.3 percent) to €91 million (about $128 million) compared to Q1/2008, though due to acquisitions an accurate historical comparison cannot be made.
The U.K. declined by 24.6 percent to €86 million (about $121 million) and Germany 27.2 percent to €329 million (about $464 million). The biggest hit was dealt to the Italian market with a decline of 34.3 percent to €116 million (about $128 million).
The Eastern European economies ran into over-proportional trouble with a decline of 29 percent to €93 million (about $131 million), falling in total size behind Nordic at €94 million (about $ 132 million)), which only declined by 23.4 percent.
“Customers in the European market reacted almost digitally to their own market downturns, ‘slamming on the brakes with both feet’ in ordering new products,” said Georg Steinberger, chairman of DMASS.”While this kind of reaction might be understandable from a purely commercial viewpoint, the cumulative effect of capacity and inventory reduction at manufacturers and record lows of inventory levels in distribution could lead to a reversal of fortune and severe availability problems once the market returns.”
Steinberger added, “It does not look as if any market really will be spared in 2009. Even Eastern Europe, for many years one of the constant growth drivers within DMASS, lost its edge, with Russia and Czech Republic being the downturn leaders beyond the minus 40-percent-mark. Just as a somewhat positive side-note, Norway only declined by 4.9 percent and Poland by 13.1 percent.”
Product-wise, all major product groups went down in Q1/2009 compared to Q1/2008. Only memories, other logic and programmable logic came in with less than 20 percent decline while analog and MOS micro logic, by far the biggest product groups, declined by 25.2 percent percent and 29.4 percent respectively to € 275 million (about $388 million) and €221 million (about $312 million) respectively. Among the biggest losers were standard logic (-34.8 percent) and discretes (-31.8 percent). The only products that declined 'only' single digit were LEDs, flash memories and DSP, none of which represents any specific positive trend.
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