European semiconductor distribution market takes a tumble in Q4 2011

According to Georg Steinberger, chairman of DMASS, commenting on the results: “As expected, 2011 remained positive and set another sales record for semiconductor distribution. However, the last quarter displayed very precisely the current market trends of cautious ordering behaviour in some and inventory corrections in some other industry segments. The two halves of 2011 couldn’t have been more different, from 23% plus to minus 7%. Predictions under the current climate would be dangerous, but I would not be surprised to see exactly the opposite in 2012 – weak first half and stronger second half.”

Regionally, there were some islands of growth in Q4, mainly in Eastern Europe and in the Nordic region, but apart from that all the main regions saw a decline. In the UK the market fell back 7.5% and in Austria it slumped 25%. Germany declined by 12.7% to 434 Million Euro, Italy by 17.7% to 118 Million Euro, the UK by 7.5% to 117 Million Euro and France by 14.5% to 96 Million Euro. Eastern Europe grew by 3% in total to 209 Million Euro, Nordic by 4.8% to 142 Million Euro.

“Eastern Europe remains driven by low-cost manufacturing and benefits from ongoing production transfers,” said Georg Steinberger. “The Baltic countries have begun to play a more prominent role now with manufacturing shifting from Scandinavia, therefore DMASS will change the reporting in the future and count the Baltic states as part of the Nordic area.”

On the product side the decline was across the board, between -5.8% for Memories (to 119 Million Euro) and 21.8% for Standard Logic (24 Million Euros). Analogue ICs, by far the biggest product group, dropped by 14.2% (359 Million Euro) and MOS Micro by 13.2% to 279 Milion Euro. Power dropped by 10.1% to 137 Million Euro, Opto by 9.9% to 114 Million Euro and Programmable Logic by 7.9% to 125 Million Euro.

Georg Steinberger concluded: “Significantly more than 50% of the Distribution business comes from design-in efforts with customers across industry segments. It is apparent that the classical model has changed to a more advanced and all-encompassing support model.”

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