Passive components drive German distribution markets in Q3

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Passive components drive German market in Q3

Passives are driving the 2018 third-quarter components distribution market in Germany. Per a report from Fachverband Bauelemente Distribution (FBDi e.V.) members, Q3 sales tracked from July through September 2018 reflected a 4.7 percent sales increase, hitting 980 million euros.

The order trend reportedly followed previous quarters, with the rate of incoming orders increasing at a much faster rate than sales – by a noteworthy 9.5 percent to 1.08 billion euros. Overall, the book-to-bill rate spiked to 1.1.

Technology Breakdown

When categorized by technology, passive components showed the biggest increase across the board at 12.1 percent (to 141 million euros). Semiconductors increased 3.5 percent (to 682 million euros), followed by electromechanics, up 2.4 percent (to 99 million euros).

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Power supplies showed an eight percent spike to hit 27 million euros and displays increased 1.9 percent to hit 21 million euros. Market share sales percentages remained the same with semiconductors capturing 69.6 percent, passives claiming 14.4 percent, electromechanics at 10.1 percent, power supplies at 2.1 percent and everything else claiming 3.2 percent overall.

An Optimistic Outlook and Cautionary Risk

As a member of the International Distribution of Electronics Association (IDEA), FBDi exchanges key market data with fellow federation members. Collective sales reported by FBDi during the first nine months of the year present an optimistic outlook in Germany. Overall, a 5.5 percent increase (which pushes the tally to 2.9 billion euros), a robust, category-wide order backlog, and a notable 21.6 percent order growth in passive components are positive milestones.

FDBi Board of Directors Chairman Georg Steinberger talked about how the increase in orders has only been partially reflected in sales for the past two years in a statement. He also expressed concern that the record-breaking 2018 hike in orders could be stunted in the fourth quarter and offset by the risk of postponements and cancellations, which could “curtail the backlog.”

He noted, “The poor delivery situation and long delivery times are dampening any expectations of further significant progress in the fourth quarter, which means that 2018 will draw to a close with sales growth of 5 to 6% and many unfulfilled expectations on the customer side.”

Industry Revolution Will Fuel Positive Industry Future

Overall, Steinberger’s positive general industry outlook is bolstered by his belief that high-tech is a “hot topic” and components will play an important role in the new tech revolution. He also notes growing urgency for Europe to make advances in “digitalization, smart infrastructure and energy transition” should also bode well for component industry growth.

“There is also the fact that industry is currently undergoing a new revolution: Robotics, machine learning and artificial intelligence are set to fundamentally change the way we live and work – all of which calls for the right hardware,” Steinberger said.