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October 31, 2013 
Editor's Note 

Welcome to the premier issue of Electronics Purchasing Strategies IP&E Market Insider monthly newsletter. We plan to profile many of the key players in the interconnect, passive and electromechanical (IP&E) markets including component manufacturers and distributors, as well as provide news coverage on what's happening in these markets, including financial reports, franchise agreements, and new trends and strategies. Here's a sampling of recent news including Vishay's Q4 outlook and its cost-cutting actions, Kemet's new electrolytic innovation center, and Amphenol's Q4 sales report.

 

There is no doubt that the biggest news in this market over the past two months was Koch Industries' $7.2 billion acquisition of Molex, which not only put the limelight on Molex but the entire interconnect industry. On the distribution side, Avnet makes a big case for IP&E. In addition to outreaches to support design engineers, Avnet has been courting purchasing and procurement experts at OEMs and electronics manufacturing services (EMS) providers. Execs say the goal isn't just to increase Avnet's IP&E sales but to also demonstrate some of the value-added services it offers suppliers and customers in the sector.

 

Part of our charter is to provide analysis and discussion of the challenges, opportunities, and issues in the IP&E market. EPS' editor in chief Bolaji Ojo has delved deep into the IP&E market over the past few months, looking into some of the challenges that IP&E component manufacturers and distributors face, including commoditization, market share struggles and the need to innovate. All of these issues have an impact on the purchasing community. We hope these articles shed some further light on what's happening in this market.

 

Over the past month, our managing editor − and distribution guru − Barbara Jorgensen has spent some time talking to distributors about some of their challenging issues. Dave Doherty, vice president of Global Supplier and Product Operations for Digi-Key, discusses the company's expansion from a traditional low-volume high-mix (catalog) order model into a small production and prototype business. Jim Ricciardelli, vice president of e-commerce strategy at Arrow, talks about the company's new tool that acknowledges the link between a product's design and the procurement of devices necessary for final assembly.

 

Speaking of the link between design and purchasing, we'd like to enlist your help with a survey that EPS has launched as part of our efforts to gain a better understanding of the electronics purchasing and procurement community. If you buy or specify components for a manufacturer, we would like to hear from you. The survey won't take more than 15 minutes and we will provide an executive summary of the report to respondents in addition to entering them into a drawing to win one of two mini iPads. 

 

All answers are completely confidential and will be used only in combination with others we receive. Your candid response is critical to the success of this research.

 

Simply click on the following link to get started: 

http://survey.beacontech.com/2328/cgi-bin/ciwweb.pl?studyname=2328&p=3&hid_pagenum=1&hid_link=1&hid_javascript=1 

 

We would also like to hear from you. If you have a story idea, let us know. Interested in a specific topic, contact us. You can reach me at gina.roos@epsnewsonline.com.

 

Gina Roos

Executive editor

Electronics Purchasing Strategies

gina.roos@epsnewsonline.com 

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Featured Articles 
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Arrow Tool Links Purchasing and Engineering

Ever since the Internet became a factor in the electronics supply chain, companies have been trying to figure out the best use for the web. Distributors in particular had a stake in the process because the Internet was supposedly poised to eliminate the need for a supply chain "middleman." The channel instead has harnessed the web to expand services offerings to customers and to boost salesContinue reading

 

Digi-Key Ventures Deeper into Supply Chain

 

One of the most significant recent developments for global distributor Digi-Key Corp.  has been the expansion from a traditional low-volume high-mix (catalog) order model into the small production and prototype business. The two models are very different and traditionally don't sit side-by-side in broadline distribution organizations. Electronics Purchasing Strategies 

managing editor Barbara Jorgensen recently spoke with Dave Doherty, vice president of Global Supplier and Product Operations for Digi-Key, to find out how Digi-Key is managing this growing business. Continue reading

 

Delph: Avnet aims to be even Bigger in IP&E

Avnet Inc. prides itself on being a broadline distributor that's able to supply all the components needed by its thousands of customers globally. That hasn't stopped the company from trying in recent years to stamp its imprint on the interconnects, passives and electromechanical (IP&E) market, a segment where it has an understated position despite being one of the top distributors. 
 
Koch Veers into Electronics with $7.2B Molex Acquisition

Koch Industries has agreed to purchase Molex Inc. for $7.2 billion in a transaction that will bring the 75-year old electronic components manufacturer into the fold of one of the world's biggest and privately-owned industrial conglomerates. The transaction represents Koch's deepest foray into the electronics industry and marks one of the biggest acquisitions in years for an economic sector that is often characterized by rapid technology shifts as well as margin-corroding commoditization. Continue reading


The product platform approach helps enhance the design process by helping to ensure that new and updated designs can be brought to market faster. The ability to design-in a customized version of an already pre-approved sensor often means that design engineers do not have to re-certify the new, upgraded products, saving both time and money.  Continue reading


NKK Switches, a maker of highly engineered switch products, wants to make its products available to as many customers as possible.  The Japan-based component maker, which already sells about 75 percent of its volume through the channel, is increasing that level to reach more product development teams, consolidate market information and ensure the right NKK inventory is in place for its customers. Continue reading

 

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News 

TE Profits Drop on Flat Sales, Charges

TE Connectivity Ltd. said profits fell slightly in the fiscal fourth quarter that recently ended with sales largely unchanged from the prior year. Profits for the quarter were impacted by a sharp increase in restructuring costs and income tax expenses.  Continue reading

Vishay Trims Q4 Outlook as Sales Drop

 
Vishay Intertechnology Inc. today disclosed why it is embarking on a cost-cutting and employee reduction program noting in a release that third quarter revenue and profits came in below investors' and the company's expectations. Its sales forecast for the December quarter were similarly lackluster indicating demand for its products remain weak.  Continue reading

Vishay Unveils Sweeping Cost-Cutting Actions

 
Vishay Intertechnology Inc. has announced a batch of workforce reduction measures to lower its selling, general and administrative expenses as well as actions that would impact its MOSFETs business and result in the transfer of some semiconductor wafer manufacturing to contractors. The program was announced one day ahead of the company's scheduled release of its September results. Continue reading

Amphenol Q3 Sales Up 5 Percent

The proliferation of electronics in all types of devices has spurred Amphenol Corp. to a quarterly sales record, the company reported this week. Sales for the third quarter 2013 reached $1.153 billion, compared with $1.103 billion for the 2012 period. Continue reading

Thermal Management for LED Lighting to Double by 2020

The thermal management materials market for light-emitting diodes (LEDs) and power electronics is expected to more than double from $1.8 billion in 2013 to $4.8 billion in 2020, according to Lux Research. This will be driven by manufacturers looking for more cost-effective ways to improve heat dissipation. Continue reading

 

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