Press Release Q1 2006

European Semiconductor Distribution Market (DMASS) starts into 2006 with double digit growth  

A whopping 15% plus in the 1^st quarter of 2006 has given the European semiconductor distribution market an excellent start. The biggest drivers were Germany (regional) and Standard Analog (product-wise).

London, May 19, 2006 • The European semiconductor distribution industry had a very encouraging start into 2006. According to DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), the usually very strong first quarter of the year (January to March) ended with an increase in sales of 15,34%. This was the strongest growth since mid-2004. In actual numbers, DMASS reported sales of 1,38 Billion €, the highest sales number since the first quarter of 2001.

Georg Steinberger, Chairman of DMASS, commented: “The positive trend from end of last year continued into 2006. It seems that the overall positive outlook for the European economy echoed itself in the distribution customer base. We can only hope that this is not a short-term market reaction but a more substantial trend. However, there seem to be some similarities to 2004, when the business started strong in the first half but flattened out towards the end of the year.”

 Regionally, the market growth showed throughout all regions, however with some very clear winners. Of the big four markets, Germany produced by far the highest growth. With an increase of 21% over Q1 last year, the German market climbed to sales of 439 Million €.  Italy produced sales of 198 Million € (+12%) and secured its number 2 spot. UK (149 Million €) and France (133 Million €) grew by 8% respectively 6,8%. Within the other regions, the strongest growth happened in Czech, Russia, Sweden, Denmark, Iberia and Israel, between 69% and 22%. The only country with a decline in sales was Finland (-13,7%).       

Georg Steinberger: “All countries benefited from the upturn, the old and the new economies, although in a huge growth bandwidth from high single-digit to very high double-digit. The exception of Finland seems to be a technical issue with contract manufacturing leaving the country towards the East and the Baltics. Nevertheless, the strong development in the Big Four • UK, Germany, France and Italy • suggests that the year 2006 may in fact have a good potential for distribution growth. Distribution customers tend to make up over 90% of all known customers.”

Product-wise, the range of growth is similarly mixed. Above average grew areas like Analog, MOS Micro, Standard Logic, Power and Optoelectronics (23,9% to 15,6%). Clear winners in single major product categories were DSPs (+38,8%), Microperipherals (33,2%), Standard Analog (28,4%), Power-MOS (26,7), Couplers (19%) and Microcontrollers (16%). The rest remained healthily positive, slightly below average.

Georg Steinberger: “The product growth across the board indicates some built-in robustness that hopefully lasts beyond the next quarter. The fact that the growth was driven by the major categories like Analog and MOS Micro also shows the substance of the current business. We can say that distribution has bounced back and continues to widen its market reach. Breadth of service & support across Europe have strengthened its position as the predominant source of semiconductor technology for European customers.”

About DMASS

DMASS (Distributors’ and Manufacturers’ Association of Semiconductor Specialists), a European non-profit organisation, is the only industry body that collates detailed semiconductor distribution market data on a quarterly basis by country and product groups such as microcontrollers, flash memories, analog components and many more. DMASS figures are collected and consolidated by Data Dynamics Ltd.

DMASS, founded in 1989, provides its members with a reliable statistical tool to evaluate their relative mass-market performance. The organisation currently consists of 30 active members and represents between 70% and 80% of the total European distribution market, depending on the regions. To continuously increase its European market coverage, DMASS welcomes new membership applications from distributors and semiconductor manufacturers.