There is no short-term prospect of an improvement in the German components distribution market as the COVID-19 crisis continues to bite. That is the bleak assessment of the FBDi, the German component distributors’ association.
Sales of the FBDi’s component distribution members fell by 15% to 818 million Euros. While this represents a sequential improvement over the fourth quarter of 2019, it remains considerably below Q1/2019.
By comparison orders fell by “only” 2%, which is a noticeable improvement in the book-to-bill rate to 1.03, albeit it a low level.
However, there were differences between the product groups: semiconductors, sensors, electromechanicals and power supplies were affected below average, but passive components, displays and assemblies in particular suffered losses, some of them significant.
Semiconductor sales shrank by 13.2% to 562 million euros, passive components plummeted 28% to 95 million euros, and electromechanics declined 12.4% to 101 million euros.
Sensors (excluding semiconductor sensors) remained almost stable at -0.3%, power supplies at -9.2% at least kept losses in single digits.
Display sales drooped 15.1%, assemblies and tools were down 17.7%.
This results in a slight shift in market weight: semiconductors fall to 69% share of the total market, passives to 11.6%, electromechanics rise to 12.4% (overtaking passives for the first time) and power supplies to 3.5%, the highest value since the 2003 survey. All other product groups together account for 3.7%.
FBDi Chairman Georg Steinberger observed: “While in February we were still concerned with the question of how COVID-19 will influence production in China and what possible bottlenecks this might cause in the supply chain, now – at least as virus-affected – the European and American industry are challenged for recovery. As a result of the partial plant closures in Europe and the USA the overview in the supply chain is rather lost – who needs what when is probably not clear until autumn 2020. The presumed bottlenecks will most likely come later, but then with more force.”
“Since February the mood in Europe and the USA has deteriorated massively,” Steinberger continued. “A PMI (Production & Manufacturing Index from IHS Markit) of 34.5 in May (50 is the threshold to positive) speaks volumes – the economic crisis squared. However, for the time being only in the mood, the year will show how bad it really gets. Basically, we still believe that in the long term our industry will play a key role in the technical and eco-friendly renewal of society”.
“The COVID-19 crisis would have the potential to show the entire society, and thus of course the economy, the way to a more sustainable future, believes Steinberger: “What Corona has shown? We can not only wear masks and keep our distance, but we can also operate digitally! This decade will show whether we can make the transition to a more conscious, economically sensible, environmentally compatible and fairer way of doing business. Politics have to rethink their way of catering only to strongest lobbies and to invest in infrastructure that will take us to the next level of digital society. 15 years of public inertia are enough!”
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