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Future Electronics Inc. has been adding to its roster of component suppliers and expanding franchise distribution contracts with existing vendors on rising demand for the services of the global distributor and as the electronics industry prepares for what forecasters see as a renewed burst of growth in several market sectors.
After several years of slow to tepid growth across the electronics industry, OEMs and component vendors now see demand picking up steadily in many promising segments and especially in products related to the connected world of Internet of Things (IoT), automotive/transportation, communication, medical, industrial, power supplies and security. Analysts at IHS Inc., for example, had predicted demand for IoT and other connectivity products would expand sharply in line with rising awareness at consumer and enterprise buyers.
Future Electronics is tapping into this vein by signing up a wider range of suppliers and beefing up existing agreements. This year alone, the company has signed numerous new component suppliers and strengthened existing ones, including relationships with companies like Gemalto, Delta Electronics Group, Ecliptek, Smartrac, TE Connectivity and Pericom, which engaged the services of Future after being acquired by Diodes Inc.
“Future Electronics is a proud strategic global partner of Diodes Inc,” said Karim Yasmine, corporate VP at Future Electronics in a statement announcing the agreement with Pericom in June. Their recent acquisition of Pericom represents a major opportunity for us to deepen our existing customer engagements as we offer more complete solutions in the analog and mixed signal space.”
Montreal, Canada-based Future has always been active in adding new suppliers but the company seems to have gone into overdrive this year with at least one major announcement each month. Executives say the company has been growing strongly this year and has taken steps to cement existing relationships with suppliers by adding new products to enable them enter new, faster-growing segments of the electronics industry. Other companies that Future has signed up this year include Advantech B+B SmartWorx, Nichia Corp. and OriginGPS. The company has also expanded existing agreements with companies like Microsemi.
Some of the agreements signed recently have been aimed at positioning Future to benefit from the recent wave of mergers and acquisitions in the semiconductor market. Industry observers believe, for instance that a recently announced expanded distribution agreement with NXP Semiconductor can open up new opportunities for Future with Qualcomm, which has agreed to purchase the Dutch chipmaker for $47 billion.
The global agreement deepened the relationship between the two companies and can be leveraged by Future in any negotiations for additional engagements with Qualcomm, a company that is not currently noted for a big presence in the distribution channel but which observers said purchased NXP to diversify its revenue stream from the consumer electronics market and may rely more upon its new acquisition. \
“We are thrilled to establish this enhanced level of partnership with NXP Semiconductors” said Future’s Yasmine in a separate statement announcing the agreement with NXP in October. “We have a long, strong and collaborative relationship with NXP and look forward to offering an even broader portfolio of NXP’s industry leading products for our Industrial, Automotive, Medical, Consumer Aerospace, and Security customers on a global basis.”
Sources at Future, which typically does not comment on strategic management developments, said the company has seen sales strengthening in the last year and expects further growth ahead. The decision to add new franchise lines and expand existing agreements with suppliers should position the company for further growth as the electronics industry strengthens over the coming years, they said.
“We are growing and relationships are important to the company,” said the senior executive. “The growth we are experiencing is in all the regions and our strategic supplier agreements confirm what we’ve always known that manufacturers want to work with Future.”
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