European distribution market shrinks by 30 percent - supply chain

“Covid impact until 2025”

November 4, 2024, 12:15 p.m. | Karin Zühlke

According to DMASS Europe, corrections in the European component markets continued in the summer quarter. The distribution industry is falling victim to its previous success and is declining disproportionately.

According to data from DMASS Europe, the European components trading market contracted by 30.2% in the third quarter of 2024, with consolidated sales of 3.64 billion euros. DMASS Europe represents about 85% of the European components DTAM.

IP&E (interconnect, passive and electromechanical components) fell “only” by 12.3% to 1.37 billion euros, while semiconductors recorded a further slump of 38% to 2.27 billion euros, the lowest sales value since Q1/2021.

Hermann Reiter, Chairman of DMASS comments: “2024 remains a challenging year. The correction we are seeing after the recent squeeze is no surprise, but the decline is, however, sharper than expected. The positive news is that the IP&E components appear to be past the worst and showing a manageable slowdown. However, semiconductors continue to decline sharply due to high customer bases and low momentum in new business. Given the low order books, the outlook for 2025 could be better, especially as the main drivers – automotive, industrial and export – all show weaknesses. Nevertheless, we are convinced that in the long term electronic components will play an important role in the transformation of the industry and the distribution industry will play a central role in the implementation.”

Semiconductors in Q3

Semiconductor distribution sales in Europe fell by almost 38% to 2.27 billion euros, the lowest sales value since Q1/2021. The worst of the major countries was Germany, with a decline of almost 50%. Things fared significantly better only in the United Kingdom and the Iberian Peninsula.
On the product side, the weakest sales were for Programmable Logic, MOS Micro and other logic products (ASSPs) with a decline of over 40%. Only optoelectronics performed better than average with “only” a 20% loss.

Interconnect, passive and electromechanical components in the third quarter

In IP&E, the worst appears to be behind the distribution market. The slowdown continued with just -12.3% to 1.37 billion euros. Only Germany, Austria and Türkiye recorded a disproportionate decline. In terms of products, the passive sector recorded a larger decline than electromechanical components and power supplies.

“Covid 19 has caused a major disruption that will continue to be felt throughout 2025. Broadly speaking, our industry’s average growth rate from 2019 to 2024 was positive and will continue to stabilize in the coming years.
In order to realize the enormous innovation potential of our industry, we need to focus on the challenges in our economy, the biggest of which are structural change in the industries and the lack of qualified workers. Innovation needs innovators and entrepreneurs, young people who we must encourage to get involved with technology. Sales is an excellent career opportunity for people who love versatility, flexibility and quick decisions,” sums up Hermann Reiter.