A new report has thrown up some intriguing results regarding the strength of the European semiconductor market.
A report by DMASS (Distributors’ and Manufacturers’ Association of Semiconductor specialists) suggested that the market shrank in the third quarter of this year, but is still up by 13.2% on the first nine months of 2011 compared to the same period last year.
Georg Steinberger, Chairman of DMASS, was cautionary when commenting on the results.
“While 2011 is set to be a growth year, the decline in the summer quarter shows that the overheated market comes back to normal. It remains to be determined whether or not the current weakness was just an inventory correction and, therefore, short term,” said Steinberger.
Interestingly, Eastern Europe was the only region that actually grew in the third quarter of 2011. Steinberger suggested that “while the majority of Eastern European countries are low-cost manufacturing-driven, Russia is the only one genuinely growing out of its own market demand.
“Interestingly, the Baltic countries play a more prominent role now with manufacturing shifts from Scandinavia,” he continued.
The areas which saw the most growth included; Fibre optics (9%), Power (3.6%), Flash memories (3.2%) and LEDs (1%).
Mixed news continues
According to leading market analyst IHs iSuppli, component inventories held by semiconductor suppliers during the second quarter of this year increased to levels not seen since the start of the last downturn in 2008.
At the end of June this year, official semiconductor stockpiles with suppliers stood at 83.4 days of inventory (DOI).
This exceeds the previous record of 83.1 DOI from the first quarter of 2008.
IHS iSuppli claims the news is “raising concerns over the near-term outlook for the chip market.”
The level is 11% higher than the historical average which is usually recorded for this period. The last major oversupply, seen in the first quarter of 2008, signalled the beginning of a 2 year downturn in the semiconductor industry.