Strategies this week released its first-ever survey of electronics
procurement professionals. Some of the data should be of particular interest to
distribution. For example, buyers source more than half (54 percent to 63
percent) of their semiconductors, passives, interconnects and electromechanical
devices through franchised distribution. In power, that proportion is slightly
lower: 49 percent is purchased through authorized distribution.
The other sources of supply
in the survey include supplier-direct, independent distributors and "other."
Buyers source between 22 percent to 29 percent of their semiconductor and
IP&E products directly from suppliers and 34 percent of the power products.
Independent distribution claims roughly 13 percent to 14 percent of purchases
across all product categories.
A couple of notes on the
customers surveyed: they are largely based in the Americas and are considered
small to midsized OEMs/ EMS. EPS plans to take its next survey
The channel data wasn't
particularly surprising: we know small to midsize companies buy more through
distribution than do larger OEMs/EMS. Suppliers generally don't support this
mid-tier directly. What we found interesting was the roughly 13 percent of spend
directed toward independents. For decades, independent distribution has been
associated with the spot market - buyers turn to independents when they fall
short of something or a product is hard to find through other channels. If
nothing else, we'd expect the portion of spend in the independent channel to
differ between semiconductors and, for example, interconnects.
As a reality check, I
reached out to several sources in the industry. While they were hesitant to draw
any solid conclusions from the data, they made some educated guesses: Buyers
aren't just using independents for the spot market; some place scheduled orders
with independent distributors. Other buyers frequently shop for advantageous
pricing through the independent channel. In other words, independents appear to
be a regular stop in the electronics procurement process. At the same time,
sources warn because of spot-market buying, a solid share of spend in the
independent channel is likely an estimate.
Independent and authorized
distributors continually battle for a bigger share of the buyer's pocketbook. A
few more years of data will be necessary to identify a trend or shift in buying
patterns. We do think, however, the overall survey provides insight into today's
electronics procurement professional. You can download the survey