European chip shortage looms for 2021

February 12, 2021 // By Nick Flaherty
European chip shortage looms for 2021
DMASS reports a 12.7 percent fall in semiconductor revenue across Europe last year to €7.7bn and warns of shortages later this year.

The European semiconductor distribution market seems to have seen the worst decline in 2020 and is set for a return to growth and shortages in 2021 says market analysis group DMASS.

Sales in the European Semiconductor Distribution Market fell by 3.8 per cent to €1.86bn in the last quarter, giving total sales of €7.7bn, down 12.7 per cent. The UK was the most badly hit in the quarter.

“While the second wave of the Covid-19 pandemic is still in full swing and transportation hurdles make it difficult to get high-tech goods into Europe in time, the demand of customers – particularly in the automotive sector – is growing strongly,” said Georg Steinberger, chairman of DMASS, which represents 85 percent of chip makers and distributors in Europe. “Longer lead times and price increases from manufacturers will likely dominate the first half of 2021. It remains to be seen if the extremely high bookings level is sustainable beyond summer.”

Germany again declined more than the average in the last quarter, by 8.2 per cent to €487m. Italy did considerably better, with a decline of only 3.9 per cent to €153m. France declined by 10 per cent to €117m, and the UK, despite some Brexit-related pre-shipping, dropped by 15.1 per cent to €118m

The Nordic countries saw a 5.7 per cent drop to €146m, but the entire East region, including Eastern Europe (+2.3 per cent to €356m), Israel and Turkey grew, as did Benelux, with +14.7 per cent to €70m.

 “The most conclusive insight from the data is that, wherever there is strong contract manufacturing, the market recovers faster,” said Steinberger. “The second obvious development is that Germany, as a stronghold for the European market, gets smaller, in part driven by increased outsourcing to Eastern Europe. So far, the UK has been spared any significant Brexit effect although we will no doubt see more impact as 2021 progresses.”

From a product perspective, Q4 showed some positive development

Courtesy: DMASS

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