Emerging and developing markets grab headlines because of opportunities for rapidly boosting profits and gaining marketshare. Meanwhile, the mature European (EU) market tends to be seen as one of the more slower-moving markets with ongoing challenges flowing from the global recession of 2008. Certainly, all this is true, but to cast the EU semiconductor and electronics market as a slow-moving market would be a serious error and would overlook the source of regionalized, double-digit gains for the industry this year. Notable also is the EU strength during what has been a global high-point in semi sales, as the SIA recently reported.
EU's double-digit growth
The European Semiconductor Industry Association (ESIA) this week published the July 2014 data for European sales of semiconductors, noting a 14.9% year-over-year (YoY) increase. That is a significant growth factor, particularly coming out of a mature market with high saturation and penetration levels for the semiconductor and electronics industry. As ESIA reported, "The high Year-on-Year growth in Europe, well above the worldwide average, confirms the continued and sustainable growth of the European semiconductor market." While the year to date (YTD) growth counterbalances the prominence of EU growth, placing the EU third after Asia Pacifica and the Americas, respectively, the continued strengthening of the EU markets for semiconductor and electronics sales is important, significant and underscores the overall recovery path that supports continued growth, particularly when we consider the positive trend YTD. Honing in on the product categories to determine particular areas of growth, the data show a broad range of positive movements, again supporting sustainable market improvements:
Robust growth was observed across the main product categories in Europe, with discrete devices, optoelectronics and MOS MPU performing particularly well. Semiconductor devices designed to be used in specific applications saw an increased demand in July with sales of devices to be used in computer and automotive applications growing particularly strongly.
European semi distribution sales data show a similar pattern of positive, sustainable momentum, as reported by DMASS in Evertiq's recent news. The drilldown into growth areas by DMASS highlights the following:
Product-wise, Optoelectronics grew over-proportionally (13.5% to 164 Million Euro), driven by LEDs, as did Discrete components (13.6% to 89 Million Euro). Power grew by 8.2% to 162 Million Euro, Analog components by 9.5% to 472 Million Euro and MOS Micro by 6.4% to 336 Million Euro. Behind the curve remained Memories with -1.8% to 122 Million Euro and Programmable Logic with -6.9% to 118 Million Euro.
Georg Steinberger [chairman of DMASS]: "We observe for some time now clear growth spots like High-end-MCUs, High-end Analog and LEDs, while other mainstream technologies – former shooting stars like Programmable Logic, Other Logic, DSPs or Memories seem to go through a weak period; arguably, an interesting development that has to be watched more closely."
LED and Smart City strengthen EU
In part, behind the LED growth, is likely the large-scale, LED roll-outs being seen across EU in line with major municipal sustainability and cost-savings programs, such as the one in Holbaek, Denmark near Copenhagen.
These programs are part of larger Smart City projects that will tie together various sustainable and smart (IoT) projects to not only improve municipal savings, lower carbon emissions, and increase demand management capabilities, but these projects will significantly improve growth for the semiconductor and electronics industry because the projects rely directly on the hardware and components that go into Smart City devices and infrastructure. The last mile, of course, will be moving the municipal projects into individual homes and businesses saving energy and interconnecting devices and people to realize Smart City plans.
We look forward to the November 11-14, 2014 Electronica event in Munich, Germany where among the many focal points will be the "energy-efficient solutions for the industry and consumers." Of course, EU along with North America lead in automotive semiconductor solutions for safety and efficiency, these solutions will also be showcased and promise to continue to support EU semi growth this year and going forward.