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North American distribution sales growth will slow in 2022

However, while component demand won’t be as strong as 2021, distributors say high single-digit to double-digit growth is possible. Some distributors reported more than 40 per cent sales growth in North America in 2021 because of surging component demand, higher prices and double-ordering of some parts by buyers fearful that their companies production lines would shut down because of a lack of components. Distributors expect sales growth will continue in 2022 but acknowledge that growth will not be as robust as last year. Some predict mid-to-high single-digit growth, while others say double-digit growth is possible because durable demand and tighter-than-normal…

Distributors expand warehouse facilities, enhance web capabilities

Electronics distributors are enlarging distribution facilities or building new ones to attract new customers and better serve existing ones. Many electronics distributors are adding warehouse space, investing in automation equipment and enhancing their website capabilities to make it easier for buyers and engineers to find and purchase components. While there are allocations or long lead times for a wide range of semiconductors, passives and connectors, distributors say shortages won’t last forever. The extra warehouse capacity will be needed as more electronics is used in more products. Many distributors are expanding existing warehouse facilities and equipping facilities with a range of…

Semiconductor distributors see strong demand, higher sales

Integrated circuit and discrete semiconductor revenue growth for distributors may top 25 per cent in 2021. Distributors that specialize in semiconductors or derive a large percentage of their revenue from sales of integrated circuits and discretes are posting strong revenue growth in 2021 and some may post record chip revenue. Demand for semiconductors is robust across a wide range of customer segments including industrial, wireless communications, consumer, computer, automotive, commercial, aerospace and defense. Strong demand has outpaced production capacity resulting in higher prices, which is contributing to revenue growth for distributors. Distributors are seeing strong sales of microcontrollers, MOSFETs, power…

Business booms for high-service distributors

An increase in design engineering activity and tight supply of chips and other components is resulting in skyrocketing sales for high-service distributors. High-service electronics distributors have weathered the coronavirus pandemic with some reporting a 50 per cent increase in sales during the first five months of 2021. Most high-service distributors focus on design and sell small quantities of parts to engineers designing new products. Design activity has increased significantly in the first half of 2021. However, high-service distributors also report they are seeing strong sales from buyers at OEMs and electronics manufacturing services (EMS) providers who are looking for shortage…

It’s not just about inventory and timely delivery anymore

Buyers need distributors to provide more technical advice, market intelligence and cost-reducing value-added and supply chain services. In the not-so- distant past the expectations that many electronics purchasers had of distributors were that distributors had the parts buyers needed in stock and would be able deliver them in a timely fashion. But times have changed and buyers now expect much more from distributors. Some buyers regard their distributors as strategic partners and rely on them not just for parts and timely delivery, but also for cost-cutting value-added and supply chain services and for need-to-know market intelligence about the supply chain….

Distributors expect 5G will boost business for years

Fifth-generation wireless technology’s speed and low latency will enable new applications and increase component demand. Industrial, defense and aerospace and communications have always been important customer segments for electronics distributors, but technologies such as 5G, alternative energy, and artificial intelligence will likely have a significant impact on distribution over the next five years. Those technologies will result in many new products that will create sales opportunities for distributors. For instance, 5G is usually thought of as the next generation mobile phone technology. However, once 5G networks and infrastructure are built out, they will enable a plethora of new commercial industrial…