Europe fails to keep pace with chip revival race

Europe's semiconductor market is struggling to keep pace with the rest of the world as the industry's recovery gathers pace.

The Semiconductor Industry Association's (SIA) most recent monthly survey revealed that Europe is not recovering as fast as other semiconductor markets.

While the sector showed sales of $11.28 billion in May, a year-on-year growth of 11.8 per cent, Europe only managed a 3.2 per cent upturn in sales, taking $2.41 billion compared with $2.34 billion for the same period last year.

Asia Pacific was the fastest growing market with sales rising 17.9 per cent from $2.35 billion to $2.77 billion.

Europe was also the only market to show a decline in sales from the previous month, dropping 2.8 per cent from April.

Sukh Rayat, general manager of Flashpoint, said: 'This is bad for distributors and resellers in Europe as it depresses margins. But it does at least point to better times ahead, as Europe generally lags about six months behind the dominant and influential US market.'

He added that recession in several European countries had led to the lacklustre performance.

But industry figures believe the SIA numbers did not add up and that Europe was not as sluggish as suggested.

Alan Stanley, general manager of Dane-Elec, said: 'Some firms are trying to hold the price up in certain areas, such as Europe, by slowing production.

It seems product is being sold in the Far East, but imported to Europe.

If you look at figures for PC volume sales, where most of the chips go, I suspect the differences are not so great.'