Distributors toughed it out in 2003; see growth in 2004
Staff -- Purchasing, 4/15/2004 2:00:00 AM
Electronics distributors struggled through 2003 as sales of the Top 75 distributors fell seven percent. However, that sales loss was down considerably from the 22% decline of 2002 and the 24% drop seen in 2001. In addition, sales picked up markedly in the fourth quarter.
"2003 started at the bottom of the downturn and ended quite strong for us," says Bill Mitchell, CEO of Arrow Electronics. "We saw a strengthening market in North America and we had a bang up fourth quarter. That strength continued into 2004. We are looking at a different world this year than we were looking at in the beginning of 2003," he says.
Twenty-two of the Top 75 reported sales declines in 2003. That's down from 62 in 2002 and 65 in 2001. Only six of the Top 75 distributors reported percentage sales declines in the double digits, down from 45 in 2002. Those who reported the biggest declines include California Eastern Laboratories whose sales dropped 40.9% over the previous year and Taitron Components, whose sales fell 29.3%. Rad Mil-Aero's sales fell 29.2% and Marlac Electronics reported a sales decline of 23.6%.
Because of a strong fourth quarter, sales of active components among the top 10 distributors increased 20%. Chip sales by the top 10 totaled $7.7 billion in 2003, up from $6.4 billion in 2002. That's an increase of 20%, but still down from $10.9 billion in 2001.
Computer product sales increased 26.5% to $4.3 billion, after falling dramatically to $3.4 billion in 2002. Passive/electromechanical parts posted $2.0 billion in sales, up 5.3% from $1.9 billion in 2002.
Many of the largest semiconductor distributors rebounded slightly in 2003, after big double-digit declines reported in 2002. These include Memec, whose sales increased 2.5% and Jaco, which grew revenue a hefty 23.5%. Other semiconductor specialists saw increases. Arrow's sales grew 17.8%; Dependable Component Supply grew 24.4%; Digi-Key, 9.6%; Richardson, 2.1% and Bell Microproducts, 1.3%
There were also a few semiconductor distributors that saw negative growth. All American's sales dipped 5.1% and Nu Horizon's fell 1.5%.
Independent distributors also struggled to keep sales from declining significantly last year. While three of the top independent distributors experienced losses, four of them grew their sales. Fusion Trade, new to the top independent list this year, led the pack in sales increases with a growth rate of 298.7%. The company posted a tremendous sales increase due to the fact that it started trading in June 2002.
Other winners include America II Electronics, which posted a 15.1% sales increase followed by Smith & Associates, whose sales rose by 8.2%. Classic Components reported a sales increase of 5.9%. The decliners include Consumer Electronics (SND and VCE), whose sales fell by 7.1% and Commodity Components, whose sales shrank by 15.4%. Converge's sales declined slightly by 2.7%.
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