European semiconductor distribution industry grows

The majority of the increase is due to a massive swing in the Euro/USD exchange rate, with the Euro losing 17% of its value, compared to Q1/CY14. As a significant part of billings to European customers are done in USD, there is an artificial growth effect of ~50% of the total growth in Q1.

Georg Steinberger, Chairman, DMASS, commented: “This is the opposite of what we have seen over previous years, when the Euro became stronger and stronger. We estimate that ~50% of the growth is a pure currency effect, either by customers buying in USD or by price increases that almost match the Euro/USD upswing. Nevertheless, even neglecting exchange rate effects, the distribution market enjoyed a stable sales growth. The downside certainly is a wave of price increases from overseas suppliers that occur all over the place to compensate exchange rate effects.”

From a regional perspective, the growth leaders in Q1 were to be found in the Eastern Regions and the Nordic countries. While Israel and Turkey grew over 30%, Eastern Europe in total grew by 29%, with the exception Russia, which experienced a loss of 15%. Nordic countries grew by 23%. Of the major regions, UK (16.3%) and France (17.2%) grew above average, while Germany (5.8%) and Italy (8.4%) trailed the trend. In absolute numbers, Germany reported €544m, Italy €171m, UK €158m and France €146m.

“Growth rates in the major markets are differently influenced by the currency effects: Eastern regions and Nordic countries either account more strongly in Dollar or in local currency and therefore show higher increases. Germany, Italy and a few smaller markets have been more Euro-focused, with the effect that their single-digit growth rates are more in line with a realistic market growth,” added Steinberger.

Almost all major product categories stayed in line with the general growth corridor, except power (6%), sensors (9%), MOS micro (10.5%) and standard logic (6.7%). Programmable logic and analogue grew by 16.2%, opto by 15.4%, discretes by 14.2%, memories by 13.9% and other logic by 18.5%. In absolute terms, the biggest product groups reported as follows: analogue grew to €537m, MOS micro to €371m, opto to €185m, power to €175m, programmable logic to €145m, memory to €139m, discretes to €105m and other logic to €91m.