2020 Predictions: What Manufacturers Need to Know
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Following two consecutive quarters of growth, U.S. distribution sales of electronics components declined in Q3, according to Electronic Components Industry Association (ECIA). On a quarter-to-quarter basis, sales slipped 1.5 percent in the third quarter, and declined 2.2 percent from the comparable period of 2015.
On a more positive note, the ECIA and the industry's largest publicly traded electronics distributor, Arrow Electronics Inc., both saw their book-to-bill (btb) ratio in positive territory for Q3. ECIA reported a btb of 1.07 compared to the negative btb in Q2 of 0.99; Arrow's Q3 global components btb reached 1.04. This data augurs well for the fourth quarter: the strong book to bill that distributors saw in Q3 of 1.07 should help bring Q4 back to a growth mode and possibly bring distributor sales in slightly above the 2015 close, according to ECIA. Arrow’s btb expectations for Q4 are at parity, executives said, at 1.00.
Information from Avnet Inc., the industry's second largest publicly traded distributor, was less positive; global calendar Q3 component sales declined 9.3 percent. Avnet is in a transitional period with the sale of its Technology Solutions business and its acquisition of Premier Farnell.
Only one component category -- electromechanical components-- had a strong third quarter, reported the ECIA: sales were up 3.2 percent compared to Q2. Within that category, circuit protection, frequency control, magnetic and filter devices grew 1.5 percent in Q3 compared with Q2. Quarter over quarter, semiconductors and embedded processing devices saw growth of 4.8 percent and analog, including sensors, saw growth of 1 percent, reported ECIA. Sales of power supplies were up 5.9 percent; relays up 2.8 percent and the category including batteries, motors, fans, heatsinks and sensors was up 3 percent from Q2, ECIA said
Calendar year-to-date (YTD) sales through Q3, compared to the same period in 2015, are down 2.3 percent, according to ECIA. Interconnect sales were down 1 percent; passive components, down 3.8 percent, semiconductors, down 5.7 percent; electromechanical, down 5.7 percent and displays up 3.9 percent. The first two quarters of the year saw growth over the previous quarter, but still ran behind the same period in 2015.
Quarterly comparisons by product category are listed in the chart below:
| 2016 Distributor Sales | Q3'16 vs Q3'15 | Q3'16 vs Q2'16 |
| % Change | % Change | |
| Interconnect | -0.6% | -0.2% |
| Passive Components | -4.5% | -1.9% |
| Semiconductor-IC | -3.4% | -2.7% |
| Electromechanical | 3.7% | 3.2% |
| Displays | 1.7% | 0.6% |
| TOTAL SALES | -2.2% | -1.5% |
ECIA members can view an Executive Summary of the Distribution Sales Report on the ECIA Website in the Knowledge Center section. Distributors that contribute data to the report can view the complete report.
About ECIA
The Electronic Components Industry Association (ECIA) is made up of the leading electronic component manufacturers, their manufacturer representatives and authorized distributors. ECIA members share a common goal of promoting and improving the business environment for the authorized sale of electronic components to the end customer. Comprised of a broad array of leaders and professionals representing all phases of the electronics components supply chain, ECIA is where business optimization, product authentication and industry advocacy come together. ECIA members develop industry guidelines and technical standards, as well as generate critical business intelligence. For more information, visit http://www.ecianow.org/or call 678-393-9990.
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