The Covid-19 pandemic has dramatically impacted markets all over the world, and the electronics sector is no exception. Despite the complexity of the situation, the data of the first quarter are not to be interpreted negatively. But there will be difficult months in the near future...
The Covid-19 pandemic has dramatically impacted markets all over the world, and the electronics sector is no exception. Despite the complexity of the situation, the data of the first quarter are not to be interpreted negatively. But there will be difficult months in the near future.
The latest market report from Assodel (Electronic Districts Association – Italy) presented at the association meeting on May 19th, which was held in “virtual mode” for the first time, discussed the general electronics market. Electronics distribution is closing the first quarter with a turnover of €360.5 million, up 25.6% compared to the last quarter of 2019 but down 3.5% compared to the first quarter of 2019 (figure 1).
Semiconductors: negative turnover, good amount of orders
Semiconductors closed the first quarter of 2020 at just under €230 million with a decrease of 4.5% over the first quarter last year. Almost all product families contributed to this negative result. Among the worst, we can find optoelectronic devices with a 10% decrease and logic devices with a 9% decline, excluding discrete components and sensors. The former only averted the minus sign, while the latter recorded an excellent +18.3%. Despite a poor turnover, orders have recorded a positive turnover ratio — book-to-bill — of 1.20.
A fact did not surprise Assodel’s president Maurizio Maitti: “In the first months of the year, we all went out of our way to collect orders to avoid stock-outs and supply problems during the relaunch phase, assuming that the virus problem would remain limited to Asian productions.”
Subsequently, the generalized lockdown effectively rendered all previous forecasts futile and prompted the market (customers, in this case) to reposition itself, both in terms of production organization and supplies. “The positive figure depends on the growth of wireless systems, which has approached a tendency close to +60%, possibly thanks to the spread of IoT [internet of things] systems.”
What to expect in the coming months
Considering the particular context we are experiencing, the data for the first quarter are not too negative, but there is real concern for the immediate future, since most of the Assodel shareholders announced that on April and May orders were lower than 40% of the expected performance levels. As Maitti confirmed, “The booking in Q2 will be affected by a strong contraction, and only after the summer we will be able to witness a return to normality,” with the hope of a more favorable scenario.
Maitti continued: “I am happy to notice that there is more positivity than negativity within our panel. On the other hand, the electronics sector is increasingly pervasive, and the post-Covid-19 era will lead to a stronger presence of technology in our lives. We can foresee many new opportunities.”