On the Front Line: Tech Companies Weigh in on Covid-19
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Component makers that are expanding their market reach often find their internal resources can’t support every market or every customer that could benefit from their technology. The distribution channel evolved – in part – as an extension of their suppliers’ sales teams.
But distributors are also finding they have to do more with less and rely on suppliers to provide the training and infrastructure they need to support a growing customer base. FPGA maker Microsemi Corp. has recently enhanced its channel support structure to drive its technology deeper into the market.
Jorgen Makitalo, Microsemi’s global channel director for Avnet EM Worldwide
“We are taking a more focused approach to the distribution market,” said Jorgen Makitalo, Microsemi’s global channel director for Avnet EM Worldwide. Microsemi has recently opened three new technical support design centers and has trained and certified more than 200 distributor partner field application engineers. Microsemi also distributes through global distributors Arrow Electronics Inc. and Future Electronics Inc.
As far as distribution in concerned, not all supplier-support programs are created equal. Electronics distribution’s business model is based on sales and the engineering support required by many suppliers and customers is expensive for distributors to support. Suppliers look to their channel partners to create demand for their products by getting them designed into a customer’s end product. Distributors often end up focusing these demand creation efforts on the brands and products that are most profitable for them.
Microsemi began reevaluating its channel strategy as its traditional military-specification and high-reliability products found applications opportunities in the commercial market. “I think Microsemi’s penetration into the communications market has developed over the years and with the Igloo2/SmartFusion2 FPGAs and Power-over-Ethernet products, it has put us in a position to compete very well,” said Makitalo. “New development such as the need for security and lower power in both industrial and communications helps us as well. Our distributors are looking for FPGAs that fit into a systems solution and we need to showcase our product offerings.”
Component makers by necessity focus on their largest volume accounts. Distribution manages small and midsize customers. The channel is adept at spotting commonalities among customers that if aggregated can create a high-volume opportunity for suppliers. “Microsemi was traditionally in the military and high-reliability space but applications for FPGAs are exploding,” said Rondekka Moore, vice president, demand creation at Avnet Electronics Marketing Americas. “Microsemi is seeing more and more spots where they fit in with security features and low power, so it is time to go after those applications.”
Ideally, all semiconductor suppliers want distribution to focus on their particular product or technology. Engineering resources are expensive, however, so channel partners look to offset these expenses. Some suppliers will provide distributors a financial reward for creating demand in the form of sales commissions on volume orders or price and margin protection for a period of time. In other cases, support and training are means of compensation.
“One of the reasons major distributors are paying more attention to us is because of our award-winning SmartFusion2 SoC FPGA and IGLOO2 FPGA product lines,” said Farhad Mafie, vice president, worldwide product marketing, for Microsemi.
"In its class of FPGA products, IGLOO2, in addition to a series of mainstream features, offers customers the lowest power consumption, best-in-class security technology, and highest reliability that they can use to significantly differentiate their products and gain a substantial market advantage," added Mafie. "In the FPGA market the leading-edge security features that Microsemi’s SmartFusion2 SoC FPGA and IGLOO2 FPGA product lines offer can’t be matched by anyone in that class of FPGA products. Distributors see the significant value for customers that help them to gain more market share.”
Distributors – which have been struggling to grow in a relatively flat market – are increasingly providing reference and board designs that help customers improve their time to market. By proving a component solution rather than pushing a single product, broadline distributors such as Avnet can sell a suite of components.
“We are focused on the customer,” said Avnet’s Moore. “We have field resources and we have an understanding of what the customer needs. What Microsemi is doing is seeing a broader base of customers that can use its technology and we can marry those two [efforts]. We expect to gain through mutually beneficial agreements and we will continue to invest in those types of programs.”
Microsemi’s three design centers are situated to provide technical support and resources across geographies. Along with Avnet, the company does a lot of hands-on training. “We’ve trained more than 1,000 engineers worldwide since this date last year,” said Makitalo. “All our distributor FAEs go through our certification process, and through Avnet’s Speedway programs engineers get hands-on opportunities – they come and can ‘play’ with our products and evaluation boards.”
Ultimately, of course, both companies need to drive sales. “The flow of information [between suppliers and the channel] is getting better and as we gain mindshare we think the opportunities will only increase,” said Makitalo. “It is this kind of proactive thinking about market applications that will drive revenue.”
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