LONDON The first half of 2005 showed signs of weakness for the European semiconductor distribution. Against a record first half in 2004, which was mainly driven by inventory increase in the industry, 2005 seemed to have returned to a normal cyclicality, in which the usually weaker 2nd quarter declined by 6.59% over record Q2/2004, according to the Distributors’ and Manufacturers’ Association of Semiconductor Specialists, a European non-profit organisation.
Semiconductor distribution sales, according to DMASS, from April to June 2005, closed at € 1.153billion. The first half of 2005 resulted in €2.34billion Euro semiconductor components sales by DMASS members, which is 4.5% lower than the first half of 2004.
Gary Nevison, DMASS Chairman, said, “The signs of slowdown that we experienced in the first quarter, continued in the latest reporting period. 2005 seems to become a transition year, driven by a slow market and some uncertainties, which the EU-Directives RoHS and WEEE impose on the industry. But we all are long enough in the industry to understand that components are a cyclical business.”
Regionally, the countries with a positive development were Czech Republic (14.2%), Russia (13.8%), Israel (5.5%) and Austria (1.8%). All of the Western European countries declined between 3.5% (Italy) and 25.3% (Sweden).
Germany with €342million sales and Italy with €166millio managed to maintain their positions as the leading markets, followed by UK (€138million) and France (€116million). With combined revenues of around €100 million each, both Scandinavia and Eastern Europe represent increasingly strong sales regions for distribution.
Nevison added, “The regional picture shows the usual signs of seasonal swings but has in total not really changed a lot for several quarters. Germany, Italy, UK and France continue to represent two thirds of the European market. The only significant ongoing trend is that Eastern Europe starts to challenge Scandinavia as the next largest market region after the big four. Some Western European markets slowly but steadily turn into design-only regions.”
Product-wise, the first half of 2005 is not backwards comparable due to a reclassification of some major product areas – Analog, MOS Micro and Other Logic have been affected by those changes quite dramatically. Unaffected by changes, LEDs and DSPs could maintain a healthy growth, with cumulative 6-month growth rates of 17% and 7,4%. Power MOSFETs did slightly better year-over-year and also sequentially. All other product areas were either flat, in decline or affected by changes and therefore not comparable.
“The total components market in Europe will stay flat in 2005, and distribution is no exception here. However, we are convinced that breadth of service & support as well as the broad presence will help distribution to further improve its position as the predominant source of semiconductor technology for many, if not most of the European customers,” said Nevison.
DMASS has added two new members at the beginning of 2005 (Intel and NEC) and therefore restated the entire year 2004 to the status of the expanded membership. DMASS only reports industrial semiconductor sales, defined as all semiconductors, excluding the PC channel.