After three years of notable growth, the European electronic components distribution market recorded an overall decline of more than 23% in the first quarter of 2024, and is expected to continue to face further declines. “a few difficult quarters”, reports the Dmass Europe organization which brings together around 85% of regional distribution players.
Total sales decreased by 23.3% to 4.58 billion euros. While semiconductors fell 26.5% to 3 billion euros, IP&E components (Interconnect, Passive and Electromechanical) limited the damage by falling “only” by 16.3% to 1.57 billion euros. For Dmass President Hermann Reiter, “ This market consolidation has been expected for some time, so Q1 2024 turned out to be the least surprising quarter I’ve seen in a long time. Although we may face some challenges in the coming quarters, recovery will begin sooner or later, and I am confident that 2025 will be back on track. It would not make sense to overreact now with cost cuts. The multiple crises the world currently faces should hide the simple truth that the electronic revolution is underway: from the all-electric society to artificial intelligence, the world needs more and more innovative components. We will find more opportunities than resources to realize them.”
Concerning semiconductors, only the United Kingdom showed itself “surprisingly resilient” with a drop limited to 15%, while France fell by 23.46% to €214.1 million, and Germany plunged by 30.26% to €837.2 million. In terms of products, only high-power LEDs and microprocessors have progressed; all other product groups and categories declined by 4-37%, with the wooden spoon falling to programmable logic circuits. For IP&E products, the slowdown continued in the first quarter of 2024, but showed a sequential recovery “very positive compared to the fourth quarter of 2023”, comments Dmass. The most notable drop concerns liabilities (-21.18%), with other types of products falling around -13%. By region, two groups are distinguished: on the one hand those who are getting by “surprisingly good” such as the United Kingdom, France (€160 thousand and “only” -12.82%), Italy and the Iberian Peninsula; on the other hand, Central Europe led by Germany (€364.8K, -23.34%), Austria and Switzerland.
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.”
