M A R K E T W A T C H

Distr ibution in the future

Avnet Electronics Marketing EMEA

is a group of spe cialised pan

European electronic components

distributors and service

organisations. The group’s

distribution divisions – Avnet Memec, Avnet Time, Silica and EBV – offer

customers specific technology and market know how, complemented with

cross functional and synergistic services, such as logistics, product

modification and supply chain consulting. For more, see www.avnet.com

The iSuppli mission is to reduce the

overall cost of acquisition for

electronic components, whilst

improving the continuity of supply

and simplifying supply chain

processes for ems, oem and supplier

communities. Market Intelligence Services provide critical information

designed to enrich tactical decisions and strategic plans. Visit

www.isuppli.com

41

After the meltdown

The first two quarters of 2009 showed a

downturn of more than 25% across all

regions and expectations for the rest of

the year are of the same magnitude (claims

Henderson Electronic Outlook), so it appears a

return to normal is almost out of the question.

From a macro perspective, Europe will

certainly lose out to other regions of the world.

Consuming 15% of global components before the

meltdown, Europe’s share will decline. The US

market normally rebounds much faster and is

more innovative in the short term and the Asian

market – the workbench of the world – wasn’t

affected so hard, so sheer maths speaks against

Europe as a long term strategic region for large

scale or large platform electronics innovation.

The two bastions of Europe’s electronics

leadership and the largest TAM/DTAM

contributors – automotive and industrial – are

facing tough times; not because of lack of

innovation, but because of lack of global demand.

Many leading industrial equipment companies are

part of the automotive or the overall electronic or

industrial production food chains and are

suffering from the reluctance of their customers

and their customers’ customers to spend money.

The broad industrial sector is, therefore, the

last one where electronic components could play

a role in innovative ideas for sectors such as

lighting, environment, medical, measurement,

energy, sensor technology, infotainment,

automation and dozens of others.

Innovation has, in the past, been driven by a

huge variety of companies in as many segments.

But consolidation means big companies have

moved their design and manufacturing to

cheaper and faster growing regions of the world.

While European engineers are as smart as

any, they may not find the same fruitful

environment. Europe – more design heavy and

less manufacturing driven – will probably see as

many design starts as before, but these designs

may only be manufactured here in prototype

quantities. This leaves a smaller components

market to be shared amongst the same number

of participants (manufacturers and distributors).

How can the provision of demand creation,

technical support and design help for engineers

work under such conditions? The only meaningful

answer can be through technically apt distributors.

While suppliers may choose to regard Europe as

‘sub strategic’ and leave for bigger opportunities

in Asia, distributors will not. Our market is Europe

and our customers’ fate is our fate.

This is why Avnet invests in Europe: Avnet

acquired Abacus to secure its leadership position

beyond semiconductors. Avent Europe’s 300

application engineers, a comprehensive reference

board strategy and vertical market segmentation

may be well suited to win semiconductor designs

– long proven by EBV, Silica and Avnet Memec –

but customers also want a full portfolio of ‘other’

components – passives, connectors, quartzes,

motors and more. So Avnet has created Avnet

Abacus, the new IP&E specialist. And customers

may want higher levels of hardware integration to

concentrate on their core competencies. So Avnet

has created Avnet Embedded – represented in the

UK by Trident and TDC.

Europe’s minor ‘volume’ role may become

reality in a few years, but what will remain are

innovative customers who need innovative

support, aggregative buying power and fair and

flexible partnership. They will find it in Avnet and

its Speedboats, which are in it for the long run.

Author profile:

Georg Steinberger is vp communications for

Avnet Electronics Marketing Europe.

How will demand for electronic components from Europe’s industries change after the worst ‘meltdown’ in

demand for a decade? And what does it mean for distribution? By Georg Steinberger.

Georg Steinberger: “While suppliers may choose

to regard Europe as ‘sub strategic’ ... distributors

will not. Our market is Europe.”

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P041_NELE_JUN23.QXP:MARKET WATCH 17/6/09 16:19 Page 33

ANALYSIS

Connectors

Prices for the two main raw

materials in connectors – copper

and gold – continue to increase.

Copper has almost doubled in

price since December and was

$0.14/oz in May. Gold,

meanwhile, increased to $970/oz

in May. Despite these increases

and a small, but significant,

increase in demand, iSuppli

believes connector prices will

remain flat in Q2, but could see

upward pressure beginning in Q3.

Standard logic

Q2 component shipments are

expected to be just above those

of Q1 as slower end equipment

demand means it is taking longer

for inventory to flush through

the supply chain.

Standard logic prices continue to

be under pressure, but declines

at the low end of the price range

have slowed and there is no

evidence of predatory activity.

A modest price increase is being

forecast for Q3 and Q4 as lead

times extend and the purchasing

focus moves towards making sure

that components are in hand to

support equipment builds.

NAND flash

Prices increased substantially in

May as channel companies and

OEMs restocked inventories.

However, now inventory levels

in the channel are high, prices

are expected to decline in Q3 as

suppliers ramp production.

Note:

Component prices were reset at

zero in September 2007 and

now show percentage changes

per month. Increasing prices

are highlighted in red.

CATEGORY DESCRIPTION MAR APR MAY

Analogue Monolithic Amplifiers and comparators -2.2 -2.0 -0.3

Analogue Monolithic Analogue interface ics -1.9 -1.3 -0.6

Analogue Monolithic Voltage regulators and references -2.2 -2.1 -0.7

Capacitors Aluminium -0.5 -0.8 -0.6

Capacitors Ceramic -1.4 -1.2 -1.4

Capacitors Tantalum -1.5 -1.3 -1.0

Connectors -1.7 -1.2 -0.6

Resistors SMD flat chips -1.1 -0.8 -0.5

Filters -1.0 -0.6 -0.4

Crystal kHz -1.2 -1.0 -0.6

Crystal MHz -1.1 -0.7 -0.7

Oscillator TCXO -1.4 -1.2 -1.2

Oscillator VCXO -1.1 -1.1 -1.1

Oscillator XO -1.3 -1.0 -1.4

Magnetics Ferrite beads -4.5 -2.3 -1.7

Magnetics Fixed inductors -2.7 -1.8 -1.8

Standard Logic General purpose cmos -3.2 -2.1 -0.7

Standard Logic General purpose bicmos -3.4 -1.8 -1.1

Standard Logic General purpose bipolar -1.8 -1.1 -0.8

Rectifier Schottky and ultrafast -1.6 -1.4 0.1

Transistor Bipolar power -2.1 -1.4 -0.6

Transistor Power mosfet -1.8 -1.0 -0.3

Transistor Small signal -3.1 -1.0 -0.3

Memory Dram -9.4 1.3 -0.2

Memory Eprom/eeprom 1.5 -0.7 0

Memory sram 0 -0.4 -0.3

Memory flash – NAND 10.2 5.4 20.4

Memory flash – NOR 1.5 1.4 -1.8

M A R K E T W A T C H

Component pr ices

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