Distributors and manufacturers organised in DMASS reported consolidated sales of 4.45 billion Euro in Q4/2023 (a fall of -17.3% compared to Q4/22).
Semiconductors dropped to 3.1 billion Euro (-18.5%), while IP&E (Interconnect, Passive and Electromechanical) components declined by 14.3% to 1.35 billion Euro.
However, across 2023, DMASS was able to report consolidated sales of 21 billion Euro (+0.2%), beating the record set in 2022 by a narrow margin. All the 2023 growth came from semiconductors (+4%), while IP&E dropped by 7.7%.
Commenting Hermann Reiter, chairman of DMASS said, “The expected slowdown was softened by a very good first half of 2023, resulting in another record year. Admittedly, distribution revenues were driven by orders and sales brought forward from 2024, inflating 2023 results significantly. The consequence is that we are now facing a market contraction which bring the business back in line with long-term growth averages.
“Our hope for 2024 resides with an overall market upside through the hype around artificial intelligence that could pull the entire market along. For Europe in general and components distribution and their customers in particular this effect will occur at best towards the end of 2024.
“The focus of distributors now must be on helping customers to develop new markets and accelerate innovation opportunities.”
Semiconductor distribution sales in Europe shrank by 18.5% to 3.1 billion Euro. While no country remained positive, there were major differences between regions.
In IP&E, the slowdown continued in Q4. The IP&E distribution market declined by 14.3% to 1.35 billion Euro in Q4. The slowdown in all 3 product groups remained in the lower double digits.
Country- and region-wise, quarterly development was ‘all over the place’, with only two countries remaining positive (Turkey and Romania), while all others declined between 5 and 25%. On an annual basis, the regional situation is nearly the same, at a product level, Passives suffered more than the other two product groups.
“As clearly as the trend may point downwards now and as much as this was visible and to be expected for quite some time, we must be careful with predictions,” said Reiter. “The challenges and opportunities in this market have become less readable than in the past and the dynamics today are influenced by political as well as technological factors that are by nature disruptive, possibly in both directions. Unpredictability notwithstanding, we are convinced that distribution will remain the stabilizing and balancing force in the market.”
