Situation of the French semiconductor market in the 3rd quarter of 2023

Paris, November 30, 2023 – The French semiconductor market fell by 13% in the third quarter compared to the previous quarter, to €598 million. This represents a contraction of 5% compared to the 3rd quarter of 2022. This is the first year-on-year decline in the French market since the fourth quarter of 2020.

If the slowdown trend has been perceptible since the start of 2023, growth is still 10% over the first 9 months compared to 2022 for the total market (i.e. +9% for direct sales to the end customer and + 13% for distribution sales).

After three consecutive quarters of decline, the Acsiel index of the French market as an annual moving average weakened slightly, thus putting an end to continuous growth of ten quarters but its level remains historically very high (see graph).

The sequential market decline in the third quarter is mainly due to direct sales to the automotive, industrial (resulting in a sharp decline in analog circuit sales) and IT/consumer segments, as well as sales to distribution. On the other hand, the smart card segment experienced moderate growth and the aeronautics/space/defense segment benefited from particularly dynamic growth for the second consecutive quarter. Direct sales by product family were almost all on a downward trend, with the exception of the MOS logic which saw slight growth. Down 13% like the total market, distribution represented 40% of semiconductor sales in France as in the second quarter, a historic record.

The market decline reflects an adjustment in demand while inventory levels remain high among some customers, including subcontractors. As a positive consequence, this situation has enabled a reduction in delivery times. The industrial segment, spared until the second quarter by its fragmentation and its own dynamics, is now experiencing certain slowdown. For the automobile industry, we are witnessing a rebalancing after more than a year of strong growth in demand in a market which had been marked by a rebound in production and a shortage of components in the post-covid period.

However, the current situation should not lead to pessimism. In the short term, a strong rebound in orders should be noted, particularly in microcontrollers but also in MOS logic circuits, discretes and sensors/actuators. In the longer term, the fundamentals of growth are not called into question for the two segments which constitute the two main pillars of the French semiconductor market, namely automotive and industrial.

Evolution by quarter of the French market since 2010, in index, in annual moving average – Source #ACSIEL