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The return of the ‘A’ word?

Demand for semiconductors from companies in the UK and Ireland has grown by 30% over the past year, according to figures from the International Distribution of Electronics Association, or IDEA, with billings in Q3 of 2017 reaching £167million. And passives showed the same kind of increase in demand.

The picture has been repeated across most of Europe, where an increase of 16% in sales of electronic devices has been seen since Q3 2016. The figures reinforce the opinion expressed recently by DMASS chair Georg Steinberger that 'the dynamics of growth are unbroken'.

Yet is there is a hint of trouble ahead in the data released by IDEA? While semiconductor billings are well ahead of this time last year, they have declined slowly throughout this year on a European basis. And those figures are mirrored by passives and emech.

IDEA's editor in chief Gary Kibblewhite said: "Despite Q3 being historically a poor quarter, total components bookings continue to grow, with every region - apart from France - posting a growth of at least 15% in total component bookings over the same quarter last year. France still grew, but at a lower rate. However, the continuing gradual drop in the semiconductor book:bill ratio throughout the year could well give us problems for 2018."

Adam Fletcher, IDEA's chairman, says terms such as 'constrained supply', 'tight market', 'undersupply' and 'demand-supply imbalance' are becoming heard more widely. Does this mean that companies are over ordering in anticipation of future supply problems? And could that mean allocation?

Graham Pitcher

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