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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…

Distributors see increased opportunities from automotive

Some distributors say their sales to the automotive supply chain are rising because of semiconductor shortages, rising electronic content in cars and the trend towards electric vehicles. Automotive represents a small percentage of electronics distributors’ overall sales, but distributors say there has been a sharp increase in demand by automakers and their key systems suppliers and contract manufacturers fueled by severe shortages of some semiconductors. Some distributors say demand by automotive customers may be short lived while others say there is a paradigm shift occurring and automotive OEMs will continue to use the distribution channel even after shortages abate. Catalog…

Small, specialized distributors deal with disruptions caused by the pandemic

Long lead times, transportation delays, and finding new customers are some of the issues that small, specialized distributors face. Last year was a challenging time for most distributors, including small, specialized distributors which have smaller line cards and fewer customers and resources than larger broad line distributors. But such distributors have risen to the challenge and have managed to be competitive and in some cases grow sales despite the impact the coronavirus pandemic has had on the overall electronics supply chain. With fewer customers and limited line cards, it would seem that specialized distributors would be more at risk when…

Distributors rise to the occasion in managing supply chain risk

Distributors are bearing more of the responsibility of managing risk in the supply chain, as more semiconductors and other components are sold through the channel. Helping OEMs and electronics manufacturing services providers manage supply chain risk is not a new task for distributors, but that role seems to have become more important and is now an integral part of the distribution business model. Outsourcing, shorter product lifecycles, increased government regulation, trade wars and tariffs have increased risk in the supply chain. That’s in addition to “normal” supply risks caused by supply/demand imbalances which can result in longer lead times, shortages…