After the sharp decline recorded in the 4th quarter of 2023 (-17.3% year-on-year), the European electronic components distribution market continued its plunge in the 1st quarter, with a decline of 23.3% in annual variation, according to Dmass Europe, which invites players in the sector not to overreact.
The almost three-year period of unprecedented growth experienced by the European electronic components distribution market, which ended in the second half of 2023, now seems far away. According to the latest figures just communicated Dmass Europe for the 1st quarter of 2024, this market fell by 23.3% year-on-year, to stand at 4.58 billion euros. This is the third consecutive quarter of decline over one year, after the declines of 5.6% in the third quarter of 2023 and of 17.3% in the last quarter of 2023. And the sector will still be faced with a few additional difficult quarters, warns the professional organization.
In the first quarter of 2024, the decline reached 26.5% year-on-year for semiconductors, to €3 billion, and 16.3% for IP&E components (connectivity, passives and electromechanical components), to €1.57 billion. Regarding semiconductors, no country escaped a sharp decline, except Turkey which fell by only 4.41% (see the tables at the bottom of this article). France shows a decline of 23.46% over one year. All major categories of integrated circuits are also trending downward. Dmass Europe notes, however, that the microprocessor and power LED subcategories have progressed.
Regarding IP&E components, Turkey is once again the country that fared best in the first quarter, being the only one to avoid the decline (+8.98%). With a decline of “only” 12.82%, France limits the damage. Here again, the decline affects all major categories of IP&E components.
“It doesn’t make sense to overreact”
Faced with these results, the boss of Dmass Europe invites the sector not to overreact. “This market consolidation was long overdue and everyone should have been prepared for a few quarters of low bookings and billings.assures Hermann Reiter, president of Dmass Europe. It makes no sense to overreact by cutting costs now, when there is enormous recovery potential across all industry segments and technologies. Electronic components will remain the key technology for innovation and transformation for many years to come. »
And Hermann Reiter concludes: “It is becoming increasingly clear that the components market is much more complex than what can be seen in global market forecasts. For example, the hype around AI is not happening everywhere and only concerns a few types of components. Our market, i.e. the mass market, requires a comprehensive portfolio of cutting-edge and mature technologies, involving many sources and manufacturers. Faced with this complexity, distribution is the only reasonable and resilient response. »
© Dmass Europe
