Emerging technologies help drive electronics distributors' growth
Electronics distributors focus on new technologies, customer segments to ride out downturn
By James Carbone -- Purchasing, 4/30/2009 2:00:00 AM
Electronics distributors don't know when the downturn will end, but when it does they believe they will outperform the overall electronics industry in terms of sales.
More electronics components will be sold through distribution because it is a cost effective way for component manufacturers to create demand for parts and to service OEM and electronics manufacturing services providers, according to Purchasing's recent survey of electronics distributors. In addition, there are some emerging technologies and growing customer segments that distributors will service such as solid-state lighting and alternative energy.
Some distributors have established business units for solid-state lighting as more lighting systems for home and businesses will transition from incandescent and fluorescent to light emitting diode (LED) technology. Ed Smith, president of Avnet Electronics Marketing Americas, sees growth for Avnet's LED business.
"LED lighting is an adjunct market for us," he says. "Lighting fixture makers are not customers we traditionally called on so there is additional expense, but with the growth in the business it pays for the expense," he says.
Smith adds that Avnet expects to see more business from medical equipment manufacturers. "Medical will be an important segment for us. Equipment like glucose meters and patient monitoring equipment," he says.
Alternative energy, including wind and solar power systems, will be an emerging market for electronics distributors while military and aerospace remain a strong segment.
"Military has continued to lead the way," says Frank Sganga, vice president of corporate product management, passive and specialty products for TTI in Fort Worth, Texas. "The military portion of the business will stay strong."
Craig Conrad, chief marketing and strategic planning officer for TTI, says government policy will dictate where opportunities will be for distributors. "Whether it's alternative energy, some stimulus road construction or broadband infrastructure project, a lot of this will be dictated by government policy," he says.
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