European component distribution sales fail to meet expectations - Embedded.com

European component distribution sales fail to meet expectations

LONDON — The European electronic component market available for distributors (DTAM) has shown a quarter-on-quarter growth in the first quarter of 2008 but below the expected level according to figures from The International Distribution of Electronics Association (IDEA).

According to IDEA President, Silvio Baronchelli, the long term trend (the ratio to the same quarter of the previous year) is in fact showing a significant decline confirming the overall trending down. The other important indicator, the book-to-bill ratio, in Q1 remained slightly above unity at 1.01:1 giving the hope of a not too much declining Q2.

“Q1 has historically been the leading growth quarter in Europe, however global economic forecasts suggest that overall economic activity is likely to decline, which may impact electronic component markets and restrict growth in 2008,” said Baronchelli. Total European distribution bookings (net sales orders entered) in Q1 2008 increased by 3.8 percent when compared to Q4 2008 but declined by 9.1 percent when compared to the same period last year.

Sector specific Bookings changes in Q1 2008 compared to the previous quarter were: semiconductors grew by 9.0 percent; passives increased by 0.6 percent; whilst electro-mech and other components increased by 4.3 percent. Compared to the Q1 2007 figures are semiconductors down 12 percent, passives down 0.2 percent and e-mechs and others down 6.9 percent.

Total European distribution billings (net sales invoiced less credits) in Q1 2008 grew by 8 percent, when compared to Q4 2008 but declined by 8.8 percent when compared to the same period last year.

Sector specific billings changes in Q1 2008 compared to the previous quarter were: semiconductor down by 9 percent; passives down 4.7 percent; electro-mech and other components down by 7.2 percent.

“The overall economic conditions are impacting the electronic world as well, forcing an intense competition between manufacturers who are attempting to maintain their market share in a declining market,” said Baronchelli. “In addition to that there is still some production migration toward Est-European Countries.”

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