The global financial crisis is now being felt in the European semiconductor market. Sales of semiconductors through distribution channels dropped by 8.2% in the third quarter, according to DMASS, representative group of distributors and manufacturers.
"The world finance crisis took control over many markets, including the electronics business," said Luciano Sandrini, the new Chairman of DMASS.
A lack of customer confidence in future business is putting a brake on bookings and billings and this could lead to further declines.
"The downturn was almost unanimous, driven by a combination of less demand and further price erosion. Everything that still was right a quarter ago now seems to be uncertain, exacerbated by the fear of a global recession," said Sandrini.
"However, we still think that the fundamentals of the European electronics industry, which is highly specialised and export-oriented, are still right and will bring Europe back on track soon," added Sandrini.
Regionally, the only positive news comes from Eastern Europe, which was 4.3% up on the third quarter in 2007.
Everywhere else saw declines ranging from 4.7% down in Germany to a 15.8% drop in the UK and -11.5% in France.
Total revenues for DMASS' semiconductor distributor and manufacturer members was euros 1.22bn during the third quarter.
"Apart from some countries in Eastern Europe and to some extent Nordic and Germany, the re-fuelled downturn has hit every market. While the UK suffers from a currency weakness that makes the numbers look worse than they are, the other markets really experience a renewed slowdown in demand," said Sandrini.
The product breakdown in Q3/2008 shows two camps and one exception: the product group Other Logic was the only one growing, although only by 1%.
The first camp contains the product groups that declined the least: Discretes (-4.5%), Analog (-6.1%), Programmable Logic (-6.5%) and Optoelectronics (-7.8%).
In the second camp all product groups declined by double digits: Memories (-10.5%), MOS Micro (-13.4%) and Standard Logic (-17.8%). For individual products, only IGBTs, Rectifiers, DRAMs and DSPs reported positive developments, with growth rates ranging from 1.5% to 15.9%.