There are challenging quarters ahead for the European component distribution business. That’s the message from DMASS as it reports a decline of over 23% to €4.58 billion across all components in Q1 2024.
It says the market will contract, and there will be no early recovery.
Hermann Reiter, Chairman, DMASS Europe commented: “This market consolidation was overdue for a while, everyone should have prepared to weather a few quarters of weak bookings and billings. It does not make sense to overreact with cost-cutting now, when there is a huge potential for recovery across all industry segments and technologies. Electronic components will remain the key technology for innovation and transformation for many years to come.”
Semiconductors plummeted 26.5% to €3 billion. This is the first time ever that a first quarter was lower than the preceding Q4. IP&E (Interconnect, Passive and Electromechanical) components skidded 16.3% to €1.57 billion.
Regionally, no country remained positive, with major differences between regions. The UK proved surprising resilient with a decline of only 15%. In the other major markets, the news was gloomier. Germany nosedived 30.3% to €837 million, France fell 23.5% to €214 million, Italy declined 19.8% to €323 million and Nordic region crashed 32.3% to €229 million.
The product segments mirrored those dismal numbers. MOS Micro Logic drooped 23.3% to €671 million. Analog’s €829 million showed a 31% decline, a Power cut of 20.5% delivered €367 million and Memory faltered 19.9% to €267 million.
In IP&E, the slowdown continued in Q1 2024, but showed a very positive sequential upturn against Q4/2024. The IP&E distribution market declined by 16.3% to €1.57 billion. The slowdown between the three major product groups differed significantly, with Passives under higher pressure than Emech and Power Supplies.
All three product groups remained in the lower double digits. At the country-level, Central Europe (Germany, Austria, and Switzerland) suffered most, UK, France, Italy, and Iberia did surprisingly OK, says DMASS.
Reiter concludes: “It is becoming increasingly clear that the components market is much more complex than what you may see in global market predictions. For example, the AI hype is not happening everywhere and only involves a few component types. Our market, a.k.a. the mass market needs to full portfolio of leading-edge and mature technologies, involving many sources and manufacturers. For this complexity, distribution is the only reasonable and resilient answer.”
