A ChangingLandscape

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Another Year of Stagnant Growth

2016 was another tough year for the franchised electroniccomponents distribution industry in North America. The industryfaced several challenges, including shrinking margins, currencyfluctuation, and supplier consolidation, which had a significantimpact on sales growth.

Faced with these challenges, revenues for the top 50 NorthAmerican franchised distributors fell by three percent, aftergrowing only 1.3 percent in 2015. The industry had a five percentgrowth spurt in 2014 but in the prior two years growth wasstagnant. Global revenues of the top 50 North Americandistributors also fell in 2016. Sales dropped by one percent,impacted by macroeconomic conditions and currency exchangerates. About 47 percent of the top distributors’ global sales comesfrom North America.

By component category, the top 50 NA distributors sawsemiconductor sales drop by five percent in 2016 compared withthe previous year, while interconnect, passive andelectromechanical (IP&E) component sales increased by 1.5percent, according to the EPSNews survey of top distributors.Computer product sales slumped by six percent.

The overall distribution industry saw an electronic componentsales decrease of 1.5 percent in 2016 compared with the previousyear, according to the ECIA. While interconnect andsemiconductor sales each fell by about one percent, passivecomponents dropped by 2.6 percent, and electromechanicaldevices fell by 4.4 percent.

Once again, margin erosion was cited as the top challenge facedby the distribution industry, according to survey respondents. Thiswas followed by mergers and acquisitions and regulation andcompliance requirements.

However, the distribution industry saw the first signs of aturnaround during the latter part of 2016 with demand spikesacross a few sectors. Lead times started to stretch for severaltypes of passive components, connectors and memory devices inthe second half of 2016. Rising demand coupled with productioncapacity expansion strategies at component manufacturers arehaving the biggest impact on component availability. Longer leadtimes are expected to continue throughout 2017, which is pullingprices upward.

The complete EPSNews report reviews what happened in theNorth American distribution industry in 2016, and looks at what’sahead for the industry. While increased demand is good news forthe channel in 2017, buyers may face shortages for severalcomponent types as we head further into the year. Thepurchasing community needs to prepare for a different buyingenvironment where it doesn't get the typical annual costreductions they expect with these types of components.

Gina RoosExecutive editor

Contents4. Suppliers and Distributors Realign as MarketPressures Shift

9. Top 50 Survey Results

17. Top 50 Electronics Distributors 2016 Ranking

19. Optimism Grows Among Distributors After DownYear

29. Electrocomponents: Ready for the Encore

31. Distribution Leaders

35. Top 50 Directory

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Sponsor-Digi-Key

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Seismic shifts don’t happen all at once. Year by year there’s a little movement, a little resistance, suddenrealignment, then aftershocks. It’s an apt metaphor for the electronics distribution industry, where there’s continualmovement amongst customers, suppliers and competitors. Key events during 2016 are beginning to change thelandscape for the Top 50 Distributors of 2017.

The semiconductor market last year executed some of the biggest mergers and acquisitions -- Qualcomm and NXP;SoftBank Group and ARM; Analog Devices Inc. and Linear Technology -- in its history. M&A in the supply baseinevitably impacts distribution, and 2016 was no different. “What a lot of this M&A has done is they’ve increased therelevance of certain lines on our line cards,” said Karim Yasmine, corporate vice-president, Future Electronics. At thesame time, M&A could mean some lost revenue and lost technology for distributors. “It’s a major uncontrollable onthe M&A side,” said Yasmine. “We don’t know who is going to buy who today or tomorrow. If it’s a company that wecarry then it’s simple but if we don’t carry the line it could be a distraction to validate why you should get access tothe new technology. But so far from a Future perspective it’s been mainly an upside for us and we’ve seen it as agreat benefit.”

E-commerce has opened up the distribution markets in ways it might not have expected. Online b2c giant Amazonspent 2016 finetuning its entrée into the b2b market, creating price-related headaches for the electronics supplychain. The channel’s inability to raise prices on its customers, coupled with several years of lackluster demand,increased friction between suppliers and distributors in 2016.

Demand signals in 2017 could well reverse a few of these trends. By May, distributors and suppliers were reportinglonger leadtimes, price increases and even allocation. But distribution isn’t just about order-fulfillment, and that’sbeen a cause of some of the friction.

Suppliers merge; policies change

The supply chain’s inability to raise prices for a number of years has had a detrimental impact on profit margins.Suppliers determine the margins they will allow distributors for services such as order fulfillment or assisting anOEM with a design. As fulfillment margins have waned, distributors have allocated more resources toward designassistance – also known as demand creation –which carries a higher profit.

In 2016 Texas Instruments – long known for its distributor-friendliness—officially discontinued its demand-creationprogram. TI, like many suppliers, wanted to retain the margin points allotted to distribution. TI is now calling directlyon customers; distributors will fulfill orders.

TI’s decision has removed millions of dollars’ worth of sales opportunity from the distribution market. Althoughdistributors rarely discuss supplier matters publicly, many are quietly shifting their demand-creation assets towardproducts that compete with TI’s.

The possibility that other suppliers may follow TI’s lead is a big concern for the channel. “We’ll see how it plays out,”Phil Gallagher, recently named president of Avnet’s Core Distribution Business, told EPSNews in March. “It’s a bigmove by TI. That said, we’ve seen this before – TI and other suppliers have emphasized demand creation or orderfulfillment at one time or another. For a distributor, I think it’s all about your ability to adapt in a shifting

Suppliers and Distributors Realign asMarket Pressures ShiftThe semiconductor market last year executed some of the biggest mergers and acquisitions in its history.

Barbara Jorgensen

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environment, the industry is transitioning all the time.”

“While suppliers and distributors both face the problem of price and margin erosion, commoditized products aremost at risk from these factors,” said Frank Flynn, president of Sager Electronics. “While certainly a concern, Sager’sstrategy isn’t focused on how to combat this erosion, but rather how to create value beyond fulfillment for both ourcustomers and suppliers. We’ve built a line card of specialized products that require a technically knowledgeableselling organization and value add services. We’ve invested in a sales engineering team to support this unique sell,and through our Power Solutions Center, we offer value-added design and manufacturing services from simplemodifications to high complexity design.”

All of this investment complements the strength of Sager’s interconnect and electromechanical offering, allowing itto offer customers a full breadth of solutions, added Flynn. “From initial design through the supply chain, we’vepositioned ourselves to help engineers and purchasing with all facets of a program.”______________________________________________________________________________________________________________________

"TI and other suppliers have emphasized demand creation or

order fulfillment at one time or another. For a distributor, I

think it's all about your ability to adapt in a shifting

environment, the industry is transitioning all the time," said

Phil Gallagher, president of Avnet's Core Distribution

Business.

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Distributors are confident that other suppliers will avail themselves of demand-creation programs. “Manysemiconductor suppliers don’t have a large salesforce so they rely on us to reach a wide base of customers,” saidArrow Electronics CEO Mike Long in November 2016. “TI is one company that has a lot of salespeople so theirstrategy is to do [design wins] themselves. We will build a supply chain around that business but with the engineerswe have hired every one of them has been put to use and have moved to new suppliers. Some of our suppliers haveasked us to increase or double down on them and design registrations are up 3 percent in spite of the TI activity.”

One of those suppliers is Analog Devices, which in February announced Arrow would be its sole global high-volumedistributor. ADI had been a longtime supplier to Arrow and its nearest global competitor Avnet Inc. In July 2016 ADIannounced it would acquire Linear Technology. Since Avnet did not carry Linear Technology, ADI consolidated itssales efforts under Arrow.

Distributor-supplier relationships appear to be more tenuous than they have been in a long time. Future’s Yasminedisagrees: “My perspective is that our relationships are deeper than they’ve ever been with our manufacturersbecause the manufacturers we do business with see value. From an industry perspective, it’s a 50-50 mix.”

Yasmine cites TI as an example where distributors haven’t shown value to the manufacturer which has naturallyweakened the relationship. The company’s decision not to “warrant” demand creation in the channel has erodedmargins and “essentially makes the channel somewhat obsolete other than a fulfillment arm for them. But from myperspective that is an eroded relationship because the distributors didn’t show them value.”

He believes that other suppliers now have the opportunity to get closer with their distributors that showdifferentiated value and get more value out of them because they aren’t distracted by a big line like TI on their linecards.

Sager’s Flynn agrees. “In terms of mergers and acquisitions, Sager’s experience has been positive,” he said. “In themajority of cases, acquisitions in the IP&E space have given Sager access to different product lines, enhancing ourability to provide customers with new technologies and expanded solutions. Sager has also been a beneficiary ofsupplier acquisitions where there is a pooling of expertise in terms of people, policies and programs.”

For example, Flynn explained, “Sensata acquired Crydom last year, embracing Crydom’s knowledgeable distributionmanagement team and existing distributor policies into their program. Such a positive integration of Crydom intoSensata has only served to build upon Sager’s existing relationship with both organizations, allowing us to betterserve our customers with a broadened skillset, expanded product offering and stronger programs.”

E-commerce and more competition

Digital services may be one of the areas in which distributors can continue to add value. After a shaky start,electronics distributors have embraced e-commerce as an essential sales tool. Distributors that specialize in low-volume high-mix orders have been especially diligent about the buying experience users have on their sites.

Because much of the commerce in electronics parts is based on negotiated contracts and pricing, distributors havedeveloped dashboards and other tools that reflect customer pricing. Many distributors have also formed tightalliances with carriers such as UPS and FedEx so customers can get components as early as the next day.

Amazon has always been the gold standard for b2c e-commerce. In 2015 Amazon launched b2b site AmazonBusiness, which includes electronic components among its product offerings. By 2016 Amazon had expanded itsbusiness services to reflect customer-negotiated prices on its platform; processing requests for quantity pricing; andproviding and processing large — pallet-sized — orders through its Amazon fulfillment centers. To assure productquality and authenticity, Amazon is now participating in electronics industry standards efforts.

The electronics industry’s biggest concern regarding Amazon is the risk of counterfeits. “Amazon is distributing a lotof products but people are very concerned about compliance, warranty of product, and counterfeiting,” saidFuture’s Yasmine. “Distributors offer many ISO standards and certifications and trade and compliance documents tomake sure that customers are getting warranted product. Conflict minerals and all those things specific to ourindustry is something distributors are expert at because that is what we do and we want to protect our customers.”

Any Amazon seller suspected of dealing in counterfeit products is immediately suspended from the Amazonplatform. To further discourage counterfeiting, Amazon is pursuing accreditation from quality control andstandards-setting bodies — such as the ISO -- across all its product marketplaces.

Amazon does not appear to be siphoning component sales away from electronics distributors. “Today Amazon hasnot made an impact but they will absolutely,” said Future’s Yasmine. “They will continue to invest in this industry. Itwould be naïve to think that they won’t be able to penetrate.”

In the meantime, Amazon is causing problems, particularly in pricing. At a recent industry forum, a componentsupplier said he found his devices on Amazon priced below manufacturers’ cost. Armed with this information, buyerscan call on suppliers and distributors to leverage better prices for their orders.

Still, electronics distributors remain confident in their ability to differentiate themselves from online mega-stores.“The electronics supply chain is more complicated than it probably appears from the outside looking in,” saidMichael Knight, senior vice president, Americas, for TTI Inc. “I can understand why a company with the scope andambitions of Amazon would want to get involved, but given the nature and complexity of the industry, and thesupply chain that supports it, it seems unlikely that Amazon will be able to apply an existing business or industrymodel they have to electronic components.”

Constraints emerge for 2017

The remainder of 2017 could help the channel stabilize pricing and demonstrate its competitive advantages oversites such as Amazon. Distribution’s core business has always been inventory management.

In May, Arrow Electronics’ Long said the distributor has strategically been adding to its inventory in anticipation ofincreasing demand. The portion of Arrow customers reporting low levels of inventory is higher than it has been in a

decade, Long added.

A recent Morgan Stanley survey found growing constraint in the electronics supply chain. Respondents who citedseeing supply constraints in FPGA and analog (57% in Q1 vs 36% in Q4) called out product categories such asmemory, FPGAs, analog, connectors, and discretes, which is impacting companies such as Murata, Xilinx, Maxim andON. Overall lead times are still manageable but 68% of respondents saw lead times extend (up from 49% in Q4) inareas such as memory, FPGAs, analog, and passive components, and mentioned a slight impact to a number ofcompanies including Murata, Xilinx, Avago, ADI, TI, Cypress, Maxim, NXP, ON and Samsung.

Morgan Stanley said 63% of respondents (up significantly, from 37% in December quarter) saw expedited activity inmemory, FPGAs, connectors, analog, discretes, and sensors. Of note, respondents this quarter also saw a slight pickup in double ordering (10% vs 0% last quarter) and push outs (12% vs 8% last quarter). “We have not seen thesecyclical effects in multiple years, and it is something we plan to monitor in the coming quarters, though lead timeextension is likely to continue to drive increased short term business confidence,” Morgan Stanley said.

This year could be a boon for distributors,particularly those that specialize in hard-to-find parts. Some, such as Advanced MPTechnology, have adopted a hybrid modelby selling franchised and non-franchisedlines. “The distribution market is evolvingfaster than ever,” said Kamran Malek,global vice president of marketing /AsiaDirector for Advanced MP Technology.

To increase their reach to customers,suppliers are seeking franchiseagreements with companies such asAdvanced MP that have traditionally beennon-franchised. “We believe in takingdifferent approaches to the marketbecause our customer base is changingso rapidly,” Malek said.

If, as Morgan Stanley suggests, supplyconstraints and double-ordering continuethroughout the year there may beanother seismic shift in distribution’sfavor. Veterans of the electronics industryrecall the last time severe shortages hitthe supply chain. It was 1999—rightbefore the bottom dropped out of themarket and billions of dollars’ worth ofcomponents suddenly became excessinventory. Today’s younger supply chainprofessionals have not experienced anallocation market or faced theconsequences of practices such as double-ordering.

Businesses holding inventory – meaning distributors – have a significant advantage in this type of market. “Rightnow, we are seeing lead times that were six to eight weeks stretching to 18 to 26 weeks and price increases,” saidJohn McKay, president of sales for independent distributor Freedom. “Even if you can get the part, some of the priceshave gone up by 20 percent. TI, Diodes Inc. and Altera parts with leadtimes of four to six weeks are now quoting 12to 20 weeks. It’s a perfect storm, and I think we’ll see much more of this in the next few quarters.”

Sponsor-Mouser

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The electronic components distribution industry faced several challenges in 2016, including lackluster demand,supplier consolidation and currency fluctuations, resulting in negative growth last year. North American (NA)revenue for the top 50 distributors fell by three percent, reaching $30.9 billion; down from $31.5 billion in 2015,according to the EPSNews survey of the electronic components distribution industry.

Semiconductor sales accounted for the bulk of the NA distribution industry, although the component categorydropped slightly in market share from 47 percent in 2015 to 46 percent in 2016. Despite higher tags for memorydevices during the latter part of 2016, which buoyed the entire segment, semiconductor sales for the top distributorsdropped from $12.8 billion in 2015 to $12.2 billion in 2016. Avnet still accounted for the biggest share ofsemiconductor sales in the overall industry with 40 percent of its NA revenues from semiconductors.

Distributors maintained their market share for computer products and passives/electromechanical devices,although sales slipped slightly in both segments. Computer product sales totaled $6.3 billion in 2016 or 24 percentmarket share, down from $6.7 billion in 2015. Sales of passives/electromechanical (EM) devices remained stable at$4.5 billion or 17 percent of total revenues.

The winner last year was interconnect sales, which rose slightly to $2.4 billion or nine percent of total sales. This is upfrom $2.3 billion in 2015 or eight percent of total sales. Sales from other components, including batteries, power,fasteners, test & measurement and other hardware, dropped to $912 million or four percent of total revenue in 2016from $1.1 billion in 2015. Component sales are based on responses from 45 of the top 50 distributors.

Top 50 Survey ResultsGina Roos

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Two of the largest distributors – Arrow and Avnet - reported negative growth last year. NA revenue for Avnet Inc.,ranked at No. 2, dropped by 9.6 percent in 2016, after declining by one percent in 2015. Avnet, in particular,underwent some big changes over the last year. The global distributor acquired Premier Farnell for $907 billion,closing the deal in October 2016, and Hackster.io, bolstering its support in the design community. Avnet also sold itsglobal IT business Technology Solutions to Tech Data for $2.6 billion. The deal closed in February 2017.

NA revenues for Arrow Electronics fell by 2.4 percent in 2016, after dropping nearly four percent in 2015. The globaldistributor, which moved up to the No. 1 position, closed on two acquisitions in 2016 – Distribution Central andUBM's technology media portfolio. The global distributor also increased its engineering and sales resources acrossall three regions – Americas, EMEA and Asia.

There was a bit of a shake-up in the top 10 rankings due to acquisitions. After holding the top position for nineconsecutive years Avnet lost its lead to Arrow, which moved up from No. 2 in 2015 to the No. 1 ranked distributor inNorth America. Future (No. 3), Digi-Key (No. 4), TTI (No. 5), and DAC (No. 6) maintained their rankings in 2016. WithAvnet reporting Newark element14 (part of Premier Farnell) as part of its overall revenues, Mouser (No. 7), AlliedElectronics (No. 8) and Sager (No. 9) all moved up one position, Master (No. 10) joined the top 10 list for the firsttime.

Newark element14 also is ranked at number 9. Avnet acquired Premier Farnell (PF), parent company of Newarkelement14 in October 2016 and included 11 weeks in the December quarter of PF sales in Avnet’s North Americantotal. The Top 50 rankings were not adjusted due to late receipt of PF sales figures.

Three catalog distributors – Allied Electronics, Digi-Key, and Mouser - reported positive growth in NA revenues lastyear. Mouser continues on its steady growth path, posting 4.4 percent revenue growth in 2016. In 2015, Mouserposted 2.4 percent growth after a 21.6 percent increase in 2014 and six percent growth in 2013.

Digi-Key regained its positive position in 2016, recording 6.2 percent growth, after a sales decline of 2.5 percent in2015. Digi-Key also posted a sales increase in 2014 of 11.5 percent and 7.5 percent in 2013.

Allied also made some headway, posting 5.6 percent growth in North America in 2016, after slipping by one percentin 2015. Like the other catalog distributors, Allied posted positive growth over the past several years, increasing salesby 9.2 percent in 2014 and 6.2 percent in 2013.

Several of the small to midsized distributors experienced the biggest gains in 2016. Area-51 ESG (No. 37) posted a13.8 percent increase in sales and Fedco Electronics (No. 47), a battery specialist, grew its sales by 23 percent.

The growth leader was Phoenics Electronics, a semiconductor specialist, which doubled its sales from $51 million in2015 to $102 million in 2016. Phoenics attributes the company’s success to the fruition of long-term design wins,which take between 18 to 24 months to move into production.

Six other distributors – primarily in the interconnect, passive and electromechanical (IP&E) segment - also achieveddouble-digit sales growth last year. Electro Enterprises (No. 16) grew its sales by 23.9 percent in 2016, and derives 70percent of its sales from interconnect products. The specialist also increased its sales in 2015 by 12.3 percent.Another connector specialist, PEI-Genesis (No. 11) grew its sales by 14.8 percent, and NRC Electronics (No. 23), anIP&E distributor, posted 14.9 percent growth.

Other growth leaders include Master Electronics (No. 10), which grew its sales by 12.2 percent; Steven Engineering(No. 18), which posted 12.1 percent growth, and Richardson Electronics (No. 20), which posted 11.2 percent growth.

Overall, 31 of the top NA electronics distributors grew their revenues in 2016, up from 29 distributors in 2015, but itstill wasn’t enough to push the industry’s growth into positive territory. Of the 31 distributors that posted positivegrowth, nine posted double-digit percentage gains, which is up from only three in 2015. Fourteen distributors postednegative sales growth, down from 18 in 2015, and four recorded flat growth.

Due to sluggish growth over the past year, top distributors were conservative in their investments in 2016. Inaddition to Arrow and Avnet’s acquisitions, only two others reported acquisitions last year. PEI-Genesis acquiredFilConn in Chandler, Ariz., and Steven Engineering said it completed an acquisition in the Pacific Northwest.

Only a few reported investments in personnel, offices or warehouses in North America. America II reportedexpansion into new areas in Mexico. CDI also expanded into Mexico. Diverse expanded into western Canada. Flameadded to its headcount in business development, while Phoenics increased its presence in the U.S. with additionalapplication engineers and inside sales.

Distributors also grew globally including America II, Mouser, Phoenics, RFMW, and Richardson Electronics. America IIexpanded into South Africa, N & E China, and India, and added a warehouse in Hong Kong. Mouser expanded intoJapan and Korea, and Phoenics increased its support into Asia and EMEA with warehouses in those geographies.

RFMW also invested additional resources in China, India, Taiwan and Europe. Richardson reported global expansionfor RF & microwave, power electric and industrial products.

Margin erosion continues to be the top challenge faced by the distribution industry, followed by mergers &acquisitions, and the economy, according to EPSNews survey respondents. Other top challenges reported includecompliance and regulations and increased competition. Other concerns cited include erosion of average sellingprices (ASPs), inventory levels, and increased costs.

In 2016, the top distributors derived 28 percent of their revenues from the industrial sector for the third consecutiveyear, according to 37 survey respondents. This is followed by the aerospace/military segment (23%), automotive(9%), computer products (9%), telecommunications (7%), medical (7%), energy (5%), and mobile communications(2%). The remainder came from “other” markets.

The industrial market also is expected to fuel growth this year. Twenty-nine distributors said the industrial sectorwill be one of the biggest growth drivers in 2017. This is up from 26 distributors in 2015 and 19 distributors in 2014.

This is followed by medical, according to 20 distributors, aerospace/military, according to 19 distributors. Eighteenrespondents expect the energy sector to drive sales growth, 15 said transportation will drive growth, while 14respondents believe lighting will be a key growth driver in 2017.

New Products and Value-Added Services Drive Growth

New product introductions (NPIs) continue to be an essential part of the distribution industry, and the number onesales driver in 2016. Many top distributors work closely with their supplier partners to ensure that the latest technicalinformation and samples are available to designers and purchasers at the time of a product launch.

However, there are several distributors that are taking NPIs a step further by delivering solutions-based offerings bybundling several components into a package as a kind of building block. This streamlines the purchasing processand helps designers select the best component options for their applications.

Thirty-seven survey respondents, the same as last year, expect new product introductions to be the biggest growthdriver in 2017. Distributors also expect new markets (31 respondents) and value-added services (27 respondents) todrive sales this year. Eleven respondents believe acquisitions will fuel growth. However, a few distributors cite anincreased need for design and value-added services as a challenge for the industry.

Growing end-markets, led by the Internet of Things (IoT) and energy-efficient lighting, also are forecast to drivegrowth. The IoT is expected to be the biggest growth driver among emerging applications, according to 22respondents, up from 17 respondents last year. Distributors also report the smart grid/smart meter sector will drivegrowth this year, according to 11 respondents.

Although distributors increased their support for energy-efficient lighting, renewable energy waned as a growthdriver in 2017. Fifteen distributors expect the lighting segment to drive growth this year. This is up from ninerespondents last year. Only five distributors expect solar to help increase sales, down from seven respondents lastyear, and only four distributors expect wind to drive growth, down from seven respondents.

The survey also finds that six of the top distributors that posted double-digit gains last year derived the bulk of theirrevenues from IP&E sales and related value-added services. Three of the top 10 leaders by growth derived morethan 70 percent of their sales from interconnects, which may have contributed to the component sector’s boost inmarket share. These distributors include Electro Enterprises, PEI-Genesis, and Powell Electronics.

Value-Added Services

What is the value of value-added services? That’s a question that many distributors are asking themselves as morebuyers and procurement specialists continue to expect “free” services at a cost burden to distributors. Oftenassociated with the design community in terms of component services such as custom assemblies andmodifications, distributors also play a huge role in providing supply chain services to ensure the right product isavailable for production at the right time. This is particularly critical during times of shortages and extended leadtimes.

As a result, more than half of the top distributors believe value-added services will help them grow their sales in2017. The survey reveals that 17 distributors derived 50 percent or more of their 2016 sales from value-addedservices. Nine of the top 10 leaders by value-added services earned 25 percent or higher of their business from theseservices.

Eleven distributors said 20 percent to 49 percent of their sales are derived from value-added services. The remaining14 distributors that responded to the survey question said value-added services accounted for 19 percent or less oftheir sales.

Value-added sales totaled $1.6 billion or 5.2 percent of NA revenues in 2016. This is up slightly from $1.4 billion in2015. Caveat: Only 42 of the top distributors responded to the question, and five out of the top 10 distributors didnot provide the percentage of their sales from value-added services.

Traditional value-added services include cable and harness assemblies, switch assemblies, connector assemblies,military connector builds, device programming, and terminal block assemblies. There are also specialists that focuson battery pack assembly, configurable power supplies, and enclosure modifications. Related services includebarcode labeling, kitting, tape & reeling, lead forming, marking, special packaging, and testing.

Design and Supply Chain Services Grow

Hand-in-hand with a growing need for value-added services, demand for more design help is fueling the distributionindustry’s move into services. Thirty-two distributors said they offer design services, up from 25 last year, which aresupported by one to 150 field application engineers (FAEs) on staff in North America.

Distributors also continue to offer supply chain services to help their customers better manage inventory and keeptheir production lines up and running. Traditional supply chain services center on inventory management andreplenishment programs that include vendor managed inventory (VMI), automated inventory management, bondedinventory, scheduled orders, JIT delivery, and consignment.

Distributors also provide a host of other services such as consulting, materials planning, and forecast managementto ensure continuity of supply. Other services include counterfeit mitigation, product life cycle management, reverselogistics, and electronics asset disposition.

Quality compliance is one area that doesn’t change significantly for distribution. Of the top 50 distributors, 42 ofthem have received ISO certification. Of the remaining eight distributors who are not certified, two are in theprocess, two have plans to be certified, and three have no plans for certification.

To earn a spot on the top 50 North American distribution ranking in 2016, distributors needed to post $5.8 million inrevenue, down slightly from $6.3 million in 2015 and $6.2 million in 2014. The top 50 lost one distributor from the

previous year’s ranking. ARCO opted not to participate this year. However, two new distributors – BenchmarkConnector Corp. and Electronic Connector Company (ECCO) – joined the top 50. Both are connector specialists.

Arrow Topples Avnet From Top Position

Arrow Electronics is now the No. 1 distributor in North America, displacing Avnet for the first time in nine years.Despite the move up one position, Arrow Electronics reported negative growth in North America. Arrow’s NA salesfell by 2.4 percent, reaching $10.5 billion in 2016, down from $10.76 billion in 2015, and up from $10.36 in 2014.However, the distributor grew its global sales by 2.1 percent, reaching $23.8 billion in 2016, up from $23.3 billion in2015, and $22.8 billion in 2014.

Arrow said its customers and suppliers have gained a better understanding of its strategy and are migrating to theglobal distributor. It cited Analog Devices and Cypress Semiconductors as two key vendors that have recentlyexpanded their relationships with the company. Arrow also noted that innovation continues to drive growth in NorthAmerica, although the revenues “don’t always land in the Americas.”

Avnet, ranked at No. 2, with sales of $9.9 billion in the Americas, posted negative 9.6 percent sales growth in 2016,down from $10.97 billion in 2015. Avnet’s global sales also fell in 2016, from $27.4 billion in 2015 to $25.2 billion,posting negative eight percent growth. But Avnet isn't standing still; it formally announced its transformation “toreach further into the conception, design and prototyping processes.” Part of this transformation were severalacquisitions – PremierFarnell and Hackster.io – over the last year focusing on the design community. The globaldistributor recently launched its new “global branding campaign heralding the fundamental reorganization andstrategic business repositioning being carried out at one of the electronics industry’s leading facilitators of designchain and supply chain activities,” reported Bolaji Ojo, editor at large, at EPSNews.

Web Sales Fall Flat in 2016

Sales transactions via the web account for a small portion, 5.5 percent, of the distribution industry's sales in NorthAmerica. This is up slightly from five percent in 2015. Of the top 50, 37 distributors offer online buying. However,several of the largest distributors - Arrow, Avnet, Future, DAC, and TTI – did not provide the percentage of their salesvia the internet.

Ten distributors reported double-digit sales via online purchases. These distributors include Allied Electronics, CDMElectronics, Cumberland Electronics, Digi-Key, Fedco Electronics, Master Electronics, Mouser Electronics, PowellElectronics, Sherburn Electronics, and Symmetry Electronics.

Catalog distributors continue to drive a bigger portion of their revenues through online sales. Digi-Key's online salesincreased slightly to 88 percent of total sales in 2016. The distributor has consistently increased its revenue fromonline sales from 83 percent in 2011 to 87 percent in 2015.

Allied's online sales also increased one percent in 2016. The distributor’s online sales increased to 42 percent of totalsales, up from 41 percent in 2015, 40 percent in 2013, 41 percent in 2012, and 40 percent in 2011.

Mouser increased its online sales by two percent in 2016. The distributor derived 53 percent of its sales via the weblast year, up from 51 percent in 2015. From 2011 to 2014, Mouser increased its online sales from 40 percent to 50percent.

As part of their online ordering services, many websites offer a host of buying tools, including order status &tracking, order history, online quotes, saved parts list, real-time stock status, cart project sharing, online catalogs,lead-time information, bill-of-materials (BOM) uploads, and life cycle notification. Some also allow purchasers to buyin different languages and currencies. Other website resources include parametric search, product training videos,live chat, reference designs and other online design tools, all fueled by the need to help buyers and designers selectthe right components and vendors for their applications. As part of their technical resources, they also providetechnical data not only for components but also for solutions by applications and even vertical markets.

North America Still Dominates

Global revenues of the top 50 North American distributors fell by one percent in 2016, after flat sales in 2015, andgrowing seven percent in 2014. Global revenues dropped to $65.7 billion in 2016, down from $66.3 billion in 2015and $66.2 billion in 2014. The top 50 NA distributors derived the majority of their global sales from North Americawith a 48 percent market share in 2016, compared with 50 percent in 2015. Global sales were impacted bymacroeconomic conditions and currency exchange rates.

Regional revenue breakdowns were based on 48 respondents, the same as last year. The top distributors derived$15.1 billion or 25 percent of their sales from EMEA (Europe, Middle East, and Africa) in 2016, down from $16.0billion or 26 percent of their sales in 2015, and $16.6 billion or 28 percent of their sales in 2014. Sales in Asiaincreased slightly, reaching $14.6 billion or 25 percent of sales in 2016, up from $14.1 billion in 2015 and 2014.Distributors derive about two percent of sales from South America.

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Top 50 ElectronicsDistributors 2016

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Sponsor-Future

Electronics

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The North American (NA) franchised distribution industry shrunk by three percent in 2016, afterbarely posting one percent revenue growth in 2015. Distributors faced the same challenges lastyear as they did in 2015, including lackluster growth, price pressure, margin erosion, and currencyfluctuations, coupled with supplier consolidation, particularly in the semiconductor industry.

Sales for the top 50 North American-based franchised distributors fell to $30.6 billion in 2016, downfrom $32.1 billion in 2015. The top challenges cited by electronic components distributors were slowgrowth, margin erosion and mergers and acquisitions.

Optimism Grows Among DistributorsAfter Down YearThe North American franchised distribution industry has grappled with growth overthe past few years, faced with several challenges including sluggish demand, lowerASPs and margin erosion. This year, distributors expect a shift into positive territory.

Gina Roos

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“The biggest challenge for distributors last year was the same challenge we’ve had over the pastfive or six years, which is a flat market. In fact, over the past couple of years the channel andcomponent manufacturers in North America have been in a down market,” said Michael Knight,senior vice president, TTI Americas. “It has created a very difficult environment for all of us in thesupply chain.”

“Growth has been a challenge over the last couple of years,” said Karim Yasmine, corporate vice-president, Future Electronics. “The number one challenge is understanding where growth is goingto come from and investing in the right customer applications and segments.”

Yasmine also cites challenges around average selling price (ASP) erosion, margins, and monetizingIoT. He also noted several “distractions” that some competitors had to deal with last year includingIT integration issues and changes in channel programs, specifically by Texas Instruments (TI).

In addition, mergers and acquisitions are creating a challenge for manufacturers’ representatives,which are very much part of the distribution community especially at Future Electronics, saidYasmine. “We are seeing a significant consolidation of the marketplace and the struggle for thereps is that most manufacturers do not want competing lines on the rep line card. With all this M&Aevery manufacturer in some way is competing. This makes it very challenging for reps who findthemselves in a position to pick one manufacturer over another.”

“Last year was a challenge,” agreed Alan Bird, president of Arrow Electronics Inc.’s Americascomponents business.

“If you look at 2016, it was no different. You have global economic conditions that were changinghere and abroad, and continued currency fluctuations. I put a lot of these factors under things notunder our control,” said Bird.

“But we continue to drive toward things in our control,” said Bird. “We see that electronic explosionis really starting to increase and our strategy is tying right into that.”

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"IoT is the hot buzzword today but IoT is not a

standalone industry. It cuts across every single

customer no matter what their end product is," said

Alan Bird, president of Arrow Electronics Inc.'s

Americas components business.

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Arrow describes its solutions strategy as providing complete sensor-to-sunset internet of things(IoT) product lifecycle capabilities, called eVolve. This includes all phases of design andmanufacturing, including hardware, sensors, connectivity, analytics and end-of-life assetmanagement. It encompasses all of its businesses – components distribution, enterprise computingand systems integration. However, Arrow continues to focus on supporting vertical markets – suchas lighting, automotive, transportation and industrial – with an IoT overlay.

Supplier consolidation was another big challenge faced by the distribution industry.

“The biggest challenge last year was the continued consolidation within the supplier community,with 2016 seeing the largest acquisition spend in the history of the electronics industry, “ said JeffNewell, senior vice president of products, Mouser Electronics. “Suppliers acquiring one another canwreak some havoc on the distribution channel.”

“In addition, exchange rate fluctuation always presents a challenge relative to global distributorssuch as Mouser,” said Newell. “While the changes weren’t as drastic as we saw in 2015, they didcontinue into 2016.”

Consolidation of manufacturers and the further maturation of the semiconductor marketplace werethe biggest challenges last year, agreed Peter Rooks, president, Phoenics Electronics. “Withacquisitions like Broadcom, Freescale, PMC-Sierra, Linear Technology, and Qlogic, distributors haveless manufacturers to sell and some are losing significant revenue.”

“Coupled with that is further tightening of margins,” Rooks added. “Interest rates going up will beanother factor in margins being squeezed and distributors pushing back.”

“Margin is a challenge in the channel,” agreed Yasmine. “If you don’t sell value you’re going to besqueezed out of this business.”

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"Margin is a challenge in the channel. If you don't

sell value you're going to be squeezed out of this

business," said Karim Yasmine, corporate vice-

president, Future Electronics.

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To avoid margin erosion, Yasmine believes distributors have to derive a significant portion of theirbusiness from value-added services. "From that perspective the customer and manufacturer

recognizes value and you gain incremental margins on the business and parts that you design in.”

Distributors have to offer differentiated value, Yasmine added. For him, this means providing stronginventory management programs, bonded inventory programs, payment terms and other value-added services that validate a better price to the customer and a better service to the supplier toearn higher margins.

Future’s core focus and commitment is to a strong inventory model to deliver continuity of supply toits customers. “Our commitment to a deep inventory model, bonded inventory managementprograms and on-time delivery remains the core success factor for the corporation," Yasmine said.

“As a private company we can take a significant position in inventory and in an industry with a lackof growth nobody is really taking a big position,” he added. “The core focus will always be continuityof supply to the customer base. On top of that we will continue to focus on our digital strategy,offering differentiated services in the IoT space and making major investments in our horizontaland vertical engineering specialist teams to support customer designs and to make sure we areexperts in the applications that our customer designs are working on.”

A Seller’s Market

Knight believes the industry is now in the midst of a strong upswing. “We started moving into anupcycle in the second half of 2016. We’re now in the middle of a strong upcycle going into nextyear."

He sees current market conditions – strong macroeconomic indicators, inventory burn-off, and alack of capacity investment by component manufacturers - coming together as a perfect storm thatis leading to a seller’s market. “Macroeconomic leading indicators are all bullish and we see ittranslating into strong macroeconomic growth in North America and in other parts of the world,”said Knight.

In addition, a lot of slack that was in the supply chain has been removed, added Knight. “As we seeimproving demand remove what is left of the slack, component lead times are pushing out andparts are starting to get scarce.”

“It’s been a strong buyer’s market for about five years,” said Knight. “This year we’ve moved into aseller’s market where demand exceeds supply. As part of this perfect storm, which we haven’t seendue to a flat market, is not a lot of investment in capacity expansion.”

At the same time, there are some changes in the component supply base that is contributing tolonger lead times and even shortages .

Knight explained that passive and connector manufacturers are building two different form factors.They are manufacturing products with legacy form factors such as larger case sizes for passivecomponents and wider pin spacing for connectors, while also building smaller form factors for newdesigns that also are a lot more economical to manufacture.

“As the demand picks up, a lot of our suppliers want to put more of their resources into newer smallform factors,” said Knight. “It’s creating even more tightness of supply for the legacy products,which you normally wouldn’t expect because of shrinking demand.”

“Consequently we see extended lead times – well over six months for a lot of components that havebeen in market for a long time - and coupled with increased demand for the new smaller form

factors, it has created shortages in a lot of commodity passive and even connector products,” hesaid. “It will be a tough adjustment for buyers.”

Lead time extensions and/or shortages are reported for nearly all types of passive components andconnectors. Lead times for some passive components range from the high teens to 40+ weeks,depending on case size, dielectric material, and end market usage. Parts affected includeautomotive-grade resistors, commercial-grade large case size chip resistors, tantalum capacitors,automotive-grade multilayer ceramic chip capacitors (MLCCs), and high capacitance/voltage (CV)commercial-grade MLCCs.

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"Fundamentally what a distributor does or should

do is carry inventory so it's a great situation for the

seller but not necessarily a good situation for a

buyer," said Michael Knight, senior vice president,

TTI Americas.

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Knight also reports that lead times have been moving out for nearly every connector category TTIparticipates in. However, it’s not as severe as deliveries for passive components. In general, leadtimes have stretched from 12 to 16 weeks for connectors.

However, customers haven’t been impacted by the lead-time extensions yet because TTI has had agood inventory position. However, it is being burned off and the replacement inventory is comingin at a slower rate than it has in the past, said Knight. “We’re moments away from customers beingpinched for parts.”

Knight doesn’t expect lead-time issues to ease for connectors until the second half of 2017, and notuntil late 2017 or early next year for passive components.

Mouser’s Newell agreed. “This year I think the biggest challenge will be product availability andlonger product lead times. We started to see some of that crop up last year and I think we will seemore of it this year," he said. “Inventory levels in the channel at present appear to be okay, but withthe onset of some lengthening lead times I would estimate it to get a little worse in the near term."

“The bigger impact will come later in the year as the suppliers adjust their production capacity. Ifthey can get ahead of the supply-chain issues, then we should have a good year with littleoverbuying," he continued. "If lead times continue to stretch and product allocation starts to be

more common, then I would be a little more nervous about supply-chain issues in the industry,especially in APAC.”

The other part of this perfect storm is the end of deflation where costs regularly decrease, saidKnight. "As the industry improved productivity, which was largely implemented in 2013 and 2014,any cost advantages customers received were due to margin transference between suppliers anddistributors," he explained.

“But this is largely behind us and we’ll have to deal with some inflation,” Knight said. Raw materialsprices are starting to swing up and become a little less available because of rising demand.”

“When coupled with the prospect of interest rate increases in the U.S., inflationary pressure on theprices of products and supply, and demand-related pressure, it’s going to create a lot of tensionbetween sellers and buyers because buyers have long been accustomed to purchase price variance(PPV) as a way to help their companies achieve their profit goals and productivity gains,” Knightcontinued.

As a result, TTI is starting to have some very difficult conversations with customers. “We understandthe expectation of the procurement community to continuously take cost out even if the producthas existed for a long time, in some cases for 10 to 20 years. Is it realistic to expect a 10 percentyear-on-year cost reduction? There comes a point where there is no profit left and that is whenprices firm up,” said Knight.

“We understand what procurement’s objectives are and understand how they’re measured andpaid, and we’re not insensitive to that,” he added. “Now more than ever it is time to have aconversation with the purchasing community about the total cost of ownership because there is stillproductivity to be gained from that approach as opposed to a PPV approach.”

“In a market where parts are tight it’s important to pick the right partners,” he added. “The rightpartner is not the one that is just going to give you the cost down you need today; it’s the one thatis going to keep your line up and running. Any cost savings from a cost down goes out the windowpretty quickly when that part takes your line down.”

A New Kind of Distributor

Some distributors are taking a different approach to growth. Phoenics Semiconductors, forexample, is a semiconductor specialist with a twist, focusing on new market segments like datacenter companies and system integrators and resellers. Its strategy is working. The company hasdoubled its sales in the last year from $51 million in 2015 to $102 million in 2016, moving up the top50 ranking to No. 15.

Phoenics' president Rooks attributes part of the company’s growth to new opportunities indifferent markets, particularly in data centers, and finding the right employees.

“People now talk about the good days being in the past but I see a huge future as there aresignificant opportunities in different markets with the same products,” said Rooks. “Where we usedto call on OEMs like IBM, EMC and HP that design their own products from the chip level up, wenow talk to the large data center companies like Amazon, Microsoft and Facebook who are nowdefining and building their own products from the chip level up to fit their exact needs.”

“Further, a whole new market segment including system integrators and resellers who are buyingmore system type products like Ethernet adapters, Fiber Channel HBAs, SSDs, DIMMs, fiber-optic

modules, RAID cards and others have opened up to this type of business,” he added.

Another reason for the huge uptick in revenue is Phoenics’ focus on long term design wins.“Fortunately or unfortunately, we make most of our money on products that take 18 to 24 monthsto design in. That’s the bad news. The good news is that those products also stay in production forfive to seven years. Many of the designs that we worked on several years ago are now hittingproduction.”

“Coupled with this, we are now heavily focused on the data center market segment. Major datacenter companies are buying products that we support with our top manufacturers like Cavium,Micron, Microsemi, Gigabyte and Finisar,” he said.

“Along with semiconductors and board level products, we are now selling Gigabyte white boxservers based on Cavium’s ARM ThunderX processor, which also synergistically allows us to sellMicron, Microsemi and Finisar. A complementary sell whereby we can sell the fries and Coke withthe Big Mac,” said Rooks.

To support the data center market segment, Phoenics has invested heavily in technical and salesresources over the past year. “This amounted to adding 25 percent more people to our team butshould account for a much higher percentage of our sales,” said Rooks.

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"People now talk about the good days being in the past but I see a huge future

as there are significant opportunties in different markets with the same

products," said Peter Rooks, president, Phoenics Electronics.

_______________________________________________________________________________________________________________

Phoenics is still heavily focused on secure networking, military networking, enterprise storage, videoand high performance computing. “However, we will see significant growth again from our datacenter focus. We’d love to be up another 96 percent like last year but most likely we’ll see modestgrowth in the 15 to 20 percent area,” he added.

However, a key challenge is finding the right people. “Focusing on hiring the right people for ourcompany to continue to grow will be the most important thing we do in 2017,” Rooks said.

In 2016, Phoenics expanded to the UK where it opened an office and warehouse. The companyplans to expand into Israel and possibly Germany in 2017, and add more people in APAC and in theUnited States.

“Our strategy will stay constant from 2016 as we need to execute on what we have in place. There’sno doubt in my mind that we should be able to reach $500 million with the suppliers we have if weimplement the right strategies and execute on them,” Rooks said.

“Due to our size and focus, we’re able to adapt a lot quicker than most traditional semiconductordistributors,” said Rooks. “When we see a change in direction of the market, we can move quicklyand refocus our priorities. We don’t have millions invested in brick and mortar, or tens if nothundreds of VPs.”

“We invest in the people and the software infrastructure we need to be successful,” he added. “Welisten to everyone in the company. From operations to sales to warehouse to customer service.Everyone’s input is important and valued. As was our theme from our most recent salesconference, The Time is Now. We have everything we need to raise the bar and increase ourpresence and significance in the marketplace.”

Growth Drivers

Overall, the biggest growth markets this year cited by the top distributors include industrial andautomotive/transportation coupled with the IoT.

The EPSNews distribution survey finds that the top distributors derived most of their sales fromindustrial customers (28%) in 2016. This was followed by military/aerospace (23%), automotive (9%),computer products (9%), telecommunications (7%), medical (7%), energy (5%) and mobilecommunications (2%).

In 2017, the industrial market also isexpected to fuel growth in thedistribution channel. Twenty-ninedistributors said the industrialsector will be one of the biggestgrowth drivers this year, up from 26distributors in 2015 and 19distributors in 2014. Other biggrowth drivers include medical,aerospace/military, energy,automotive/transportation andlighting, according to surveyrespondents.

Historically, the industrial marketfor semiconductors hasexperienced slow and steadygrowth, increasing at a 4.8 percentcompound annual growth rate(CAGR) from 2010 to 2015, andcomprises only 12 percent of totalrevenues, according to SIA/WSTSdata, reported Semico Research.

However, it’s a different story whencombined with the IoT, which isexpected to be the biggest growthdriver among emergingapplications, according to nearlyhalf of the top 50 distributors. Semico estimates that semiconductor sales to the industrial IoT will

grow at a 7.7 percent CAGR over the next five years.

Many distributors, including Arrow and Mouser, expect the IoT to drive their businesses particularlyaround sensors, microcontrollers, and power management. Semiconductor sales for IoT is forecastto grow more than three times faster than the total IC revenues in the last half of this decade,according to IC Insights’ 2017 Integrated Circuit Market Drivers report.

“The demand for electronics and the explosion of smart connected devices continues to representincredible opportunities for our company and the industry overall,” said Bird.

Suppliers are recognizing how well Arrow is positioning them to take advantage of the IoTopportunity but across customer markets, including lighting, transportation, military and industrial– where Bird also predicts growth opportunities this year.

Bird explained that Arrow is not moving away from vertical markets they’ve always supported.There will be an “IoT overlay” that will be an additional investment to support those verticals likelighting, automotive and transportation. “I can’t think of a customer or segment today that doesn’twant some kind of connectivity that they didn’t have in the past.”

“Ecosystem is important,” said Bird. “You need to have an entire solution offering for the customer.It’s very difficult to have as a standalone company or solution.”

Automotive and transportation also continue to drive strong growth in the distribution channelthanks to growing electronics content. New features are forecast to drive $350 billion in incrementalautomotive supplier business opportunities by 2021, according to IHS Markit.

“Design activity in the OEM space, and especially in the automotive and transportation markets,continues to be strong, which helps our growth in all regions,” said Newell.

Transportation and automotive are very strong markets, agreed Future's Yasmine. “Every car hassignificantly more content and even the low-end cars have so much digital electronics content thatit’s driving growth for both semiconductors and passives.”

“Because of this content you’re seeing resistance and capacitance requirements in automotive gothrough the roof, and by default you’re seeing lead times stretch for a lot of resistors andcapacitors,” he added. “Manufacturers that have been used to a flat or slightly up or down markethave reduced manufacturing capacities down to a level that can’t cope with this kind of upside, andtherefore we have these supply constraints. It’s a reality that we are heading into a moreconstrained market based on a lot of that demand.”

Yasmine also reports constrained supply for discrete components including TVS diodes, low- andhigh-voltage MOSFETS, IGBTs as well as MEMS sensors and memory devices including DRAM andFlash memory.

As a result of the extended lead times, manufacturers are getting concerned about doublebookings, which is what usually happens in a constrained environment, Yasmine said.

Newell also expects the availability issue will push growth up a bit. “As products become harder tofind, our significant inventory position generally means that more customers will come to Mouser.”

Sponsor-Heilind

Electronics

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Electrocomponents PLC is on a roll. The benefits of a two-year long restructuring program are pouring in, boostingmarket share, sales, profitability and stock valuation. In only the last year, Electrocomponents' capital valuation hasmore than doubled, making the U.K. distributor one of the best-performing stocks on the British exchange. Financialinvestors and shareholders are naturally pleased with the company’s performance. So are the employees and thesenior executives led by Lindsley Ruth, the North American who joined the company approximately two years ago toengineer the turnaround of the then ailing company.

With its financials in better shape and the turnaround largely completed, Ruth and his team face a more dauntingtask: keeping the company on the growth track. They have also now conditioned shareholders to expect recordperformance. As a result, Electrocomponents will in the future not only have to keep up its market-beatingperformance but also exceed its own sales and profit records. Shareholders also will expect the market value to keeprising. Ruth, in an interview, acknowledged these challenges but noted that the company is already preparing for itsnext growth phase.

“We’ve got momentum,” he said. “We’ve got the model down in terms of execution and now we are looking atother areas to boost growth. I love the position we are in today. All of the challenges we face today are within ourcontrol.”

______________________________________________________________________________________________________________________

"We've had monumental changes and we've become more customer-

focused rather than internally focused," said Lindsley Ruth, Group CEO,

Electrocomponents.

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Ruth’s confidence is built on a solid platform. Over the last couple of years Electrocomponents has gone through aradical restructuring that involved the traditional cost-cutting measures and the appointment of new seniorexecutives to key positions. It has intensified its focus on customer satisfaction and launched new products,including the private label line dubbed RS Pro. On the sales and marketing fronts the company has pushed hard toraise its profile in Europe and appointed a new head for its U.K. division to rekindle growth at the division and takeadvantage of business opportunities across the country.

In the last year, Electrocomponents’ board of directors also approved a set of five strategic priorities for thecompany, giving employees a better grasp of its enterprise objectives and offering suppliers and customers a betterinsight into what they can expect from the enterprise. Ruth repeats the objectives at every opportunity and even

Electrocomponents: Ready for the EncoreBolaji Ojo

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included it in a May 23 press statement announcing the fiscal 2017 results. The “Five Strategic Priorities and GroupTransformation Initiatives” are: Best customer and supplier experience, high performance team, operationalexcellence, innovation, and disciplined investment to accelerate growth.

“We’ve had monumental changes and we’ve become more customer-focused rather than internally focused,” Ruthsaid, ticking off some of the changes made by the company. “We put the focus back on sales and operating incomegrowth; put regional P&L back in place, appointed new leaders in Europe; Asia and North America; reduced thenumber of internal meetings by 75 percent; closed warehouses in Singapore and Hong Kong; reduced costs by £30million; made massive changes to our IT and digital operations; improved inventory turn, and reduced our loss inAsia and reduced headcount. We have fixed all of the problems we said we needed to fix.”

Fixing Electrocomponents’ sales strategy by focusing on measures to improve customer satisfaction has been key toits turnaround. Ruth immediately moved to restore the customer to the heart of its operations after he joinedbecause it had veered from this competitive strategy by becoming process-oriented. It initiated programs internallyto retrain employees and continues to emphasize customer-satisfaction throughout the organization.

The results of these efforts are in. The company’s profits soared 320 percent in the 2017 fiscal year, ended March 30,to £92.1 million ($118 million) from £21.9 million in the 2016 fiscal year. Revenue climbed 17 percent to £1.51 billionfrom £1.29 billion. Each of the company’s operating regions reported stronger sales, led by North America where itsAllied Electronics unit remains a star performer. The region reported a 23 percent sales increase to £393 million, upfrom £320 in fiscal 2016. Electrocomponents expects North American sales to increase strongly in coming years onfurther penetration of RS Pro in the region.

Growth Opportunities

Electrocomponents can do even better in future. The company plays in a huge industry in which it has a minusculemarket share. With legs in both the electronics components and the mechanical and industrial markets, thecompany has only a fraction of an economic segment it estimates at approximately £380 billion “with many potentialopportunities.” Based on this estimate for the addressable market and the company’s annual revenue of £1.5billion, Electrocomponents can potentially grow at an exponential rate over the next several years if it takesadvantage of existing opportunities.

There are basically two ways for the company to grab a bigger chunk of the market. The first is to accelerate itscurrent growth rate. The revival of the private label RS Pro business will help in the attainment of this objectivebecause the division is barely known in the huge North American market. A sustained marketing push of this brandin North America can result in a tripling of the regional sales in only a few years, according to observers.

RS Pro also has enormous potentials in other regions. A breakdown of Electrocomponents’ sales by regions shows itis still a minor player in continental Europe. For fiscal 2017, the company reported sales of £206.6 million in itsCentral European hub, which include Austria, the Benelux nations, Eastern Europe, Germany and Switzerland. That’sa pittance for a market that huge. RS Pro can help boost sales in these countries. Similar opportunities exist for thebrand and other Electrocomponents offerings in Southern Europe (France, Italy, Portugal and Spain – representing20 percent of company sales) and Asia Pacific (13 percent of sales.).

The second option for raising Electrocomponents’ sales and market share is for the company to merge with oracquire similar businesses. Once a voracious acquisition engine, Electrocomponents has not made any majorpurchase of rival enterprises in recent years. With many of the crippling challenges behind it, a lofty stock valuation,low debt and a visionary management in charge, Electrocomponents is already looking at acquisition opportunities.

It is likely the company will first look at opportunities in the U.K., continental Europe and North America beforeventuring farther out. It is also probable that it will seek opportunities primarily in the large maintenance, repairsand operations (MRO) market rather than in the largely consolidated electronics components distribution market.Executives said the company will be highly selective in making any acquisitions to avoid disruptive transactions thatcould derail its growth momentum.

“We would prefer to do digestible, bolt-on acquisitions,” said CEO Ruth. “But that doesn’t mean we won’t look atother types of acquisitions.”

Although interconnects are a small portion of the North American (NA)distribution industry’s total sales, interconnects gained ground in 2016 at theexpense of semiconductor sales. Interconnect sales accounted for 9.2 percentof the total Top 50 NA revenue, or $2.4 billion, up slightly from $2.3 billion oreight percent market share in 2015. Semiconductors still accounted for thelargest share of sales for the top distributors in 2016, reaching $12.2 billion or46.3 percent of NA revenue. This is down slightly from $12.8 billion or 47percent share in 2015.

The remainder of the product categories surveyed remained relatively flatcompared with 2015. Passives/electromechanical devices accounted for $4.5billion or 17 percent of total NA revenues. Computer products held on to its24 percent market share, despite dropping to $6.3 billion in 2016, down from$6.7 billion in 2015.

Sales from “other” components dropped to $912 million in 2016, or 3.5percent market share, down from $1.1 billion or four percent of NA revenue.Other components include batteries, power, thermal products, filtering, handtools, chemicals, automation & control, test & measurement, fasteners, andother hardware.

The charts below show the top 10 distribution leaders by componentcategory in North America.

Distribution LeadersInterconnects Gain Market Share in 2016

Gina Roos

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Top IP&E Leaders

Growth Leaders

Air Electro, Inc.Rank: 32T9452 De Soto Ave., Chatsworth, CA 91311; (818) 407-5400Distributor type: SpecializedManagement: Steven Strull, president; Todd Walk, VP; Ben Strull, salescontactMajor lines: Amphenol PCD, Carlisle Interconnect Technologies, Corsair,Esterline Connection Technologies, Glenair, Radiall, RMSValue-added (product) services: Connector assembly, design and kittingWebsite: http://www.airelectro.com

Allied ElectronicsRank: 87151 Jack Newell Blvd. S, Ft. Worth, TX 76118; (800) 433-5700; (817) 595-Distributor type: BroadlineManagement: Lindsley Ruth, CEO, Electrocomponents plc; Steve Newland,president, Allied; Mark Simon, VP; Andrew Jackson, VP; Kenneth Bradley, VP;Frank Cantwell, VP; Patti Crozier, VP; Nick Hawtrey, VP; Mark Simon, VP; DanStewart, VPMajor lines: Alpha Wire, Amphenol, Belden Wire & Cable, Crouzet(Automation, Crydom, Crydom-Controls, Motors, Switches), Crydom Inc.Danaher, Eaton Cutler-Hammer, Ebm-papst, Fluke (Amprobe, FlukeCorporation, Fluke Networks, Pomona, Fluke Calibration), Honeywell,Keysight, Molex, Omron, Panduit, Pentair (Birtcher, Calmark, HoffmanCooling, Hoffman Enclosures, Schroff), Phoenix Contact, Schneider Electric(Schneider Electric, Schneider Electric Industrial, SchneiderElectric/Magnecraft, Square D, Telemecanique, Schneider Electric IT USA,Inc.), Siemens, SMC, TE Connectivity, VishayValue-added (product) services: Kitting, bar coding, customized shipments,parts customization, bagging & tagging, next plane out, break standardpackaging, and online design toolsWebsite: www.thinkallied.com

Top 50 Directory-

America II ElectronicsRank: 13T

2600 118th Ave. N.; St. Petersburg, FL 33716; (800) 767-2637Distributor type: Broadline

Management: Michael Galinski, CEO; Jed Pecchioli, COO;sales@americaii.com, sales contactMajor lines: Please visit website.Value-added (product) services: Custom cable assemblies and displays.Website: http://www.americaii.com

Area51-ESG, Inc.Rank: 3751 Post, Irvine, CA 92618; (949) 387-0051Distributor type: BroadlineManagement: Steven G. Shammah, president, CEO; Peter Nguyen, CFO;Daniel Nguyen,COO; Miroslav Maramica, VP of quality, PhD;sales@area51esg.com,sales contactMajor lines: 3M, Alpha Wire, Belden, Black Box, Kamaya, L-Com, Littelfuse,Panduit, SemicoaValue-added (product) services: Cable and harness assemblies, switchassemblies, connector assemblies, electronic manufacturing services, deviceprogramming, barcode labeling, kitting, tape & reel, lead forming, marking,special packaging, and testingWebsite: http://www.area51esg.com

Arrow Electronics, Inc.Rank: 19201 E. Dry Creek Rd., Centennial, CO 80112; (303) 824-4000Distributor type: BroadlineManagement: Michael J. Long, chairman, president, CEOMajor lines: Visit website.Value-added (product) services: Design services, programming, assemblyservices, end-of-life services, etc. Visit website.Website: http://www.arrow.com

Avnet, Inc.Rank: 22211 South 47th St., Phoenix, AZ 85034; (480) 643-2000Distributor type: BroadlineManagement: William Amelio, CEOMajor lines: Line cardValue-added (product) services: Value-added and integration servicesWebsite: http://www.avnet.com

Benchmark Connector Corp.Rank: 45T

4501 NW 103rd Ave., Sunrise, FL 33351; (954) 746-9929Distributor type: BroadlineManagement: Wayne Nelson, general managerMajor lines: ADI, Aiconics, Aero-Electric, American Micro, Conesys,Elecsys;Divion of DCX-Chol, Delta Electronics, EMP, J-Tech, Kings RF, Preci-Dip,Step N Components, Spacecraft Components and SPI-ConnectsValue-added (product) services: Custom assemble to customerspecifications (several different types of Mil-Spec electrical connectors),government packaging, kitting, and cable assembliesWebsite: http://www.benchmarkconnector.com

Bisco IndustriesRank: 121500 North Lakeview Ave., Anaheim, CA 92807; (714) 693-2901Distributor type: BroadlineManagement: Glen Ceiley, chairman, CEO; Don Wagner, president, COO;Courtney Cresap, supply chain manager; Regan Robinson, supply chainmanager; Zachary Ceiley, VP and sales contactMajor lines: Acme, Brady, Essentra, Heyco, Kato, Keystone, Mill-Max, Pentair,RAF, SouthcoValue-added (product) services: Kitting, bar coding, customized qualityprogramsWebsite: http://www.biscoind.com

Bluff City ElectronicsRank: 443339 Fontaine Rd., Memphis, TN 38116; (901) 345-9500Distributor type: BroadlineManagement: Alfred L. Cowles III, president; Daniel Cowles, VP; LauraCantrell, chief procurement officer; Barry Gilespie, sales contactMajor lines: Banner, GE, Idec, Pepperl & Fuchs, TurckValue-added (product) services: KittingWebsite: http://www.bluffcityelectronics.com

CDM ElectronicsRank: 28130 American Blvd., Turnersville, NJ 08012; (856) 740-1200Distributor type: SpecializedManagement: Mark G. DeLeo, president; Carmen J. DeLeo, CEOMajor lines: Visit website.Value-added (product) services: Cable assembly, connector assembly,kitting, engineeringWebsite: http://www.cdmelectronics.com

Component Distributors, Inc.Rank: 262601 Blake St., Ste. 450, Denver, CO 80206; (303) 531-1800Distributor type: SpecializedManagement: John Williammee, chairman, president, & CEO; Dan Miller,CFO; Whit Allen, VP; Dough Slansky, VPMajor lines: CML, Gigpeak, Invensense, Mean Well, Skyworks Solutions,Solartron, Sumitomo, TE Connectivity, XicatoValue-added (product) services: Evaluation platforms, kitting, and specialassembliesWebsite: http://www.cdiweb.com

Components Center Inc.Rank: 45T11208 Young River Ave., Fountain Valley, CA 92708; (714) 979-0433Distributor type: BroadlineManagement: Edward Bush, chairman, presidentMajor lines: Belden, Essentra, Mechatronics, NKK, NMB, Panduit, TEConnectivity, Thomas & Betts

Value-added (product) services: Visit website.Website: http://www.componentscenter.com

Cumberland Electronics Strategic Supply Solutions (CE3S)Rank: 382501 Sycamore St., Harrisburg, PA 17111; (888) 565-3026Distributor type: BroadlineManagement: Donald G. Smeltz, president; Jeremy Wagner, VP of sales &marketing; Tom Misiti, sales contactMajor lines: Belden, 3M, Alpha Wire, Aim Solder, Chemtronics, Techspray,IDEC, Dymo, Panduit, Greenlee, Fluke, Desco, PACE, HAKKO, Wieland,SSAC.Symcom, Dremel, EATON, WellerValue-added (product) services: Kitting, production and rework support,wire and tube cuttingWebsite: http://www.ce3s.com

DACRank: 658 Jonspin Rd., Wilmington, MA 01887; (978) 657-4870Distributor type: SpecializedManagement: Robert W. Clapp, chairmanMajor lines: 3M, Accuride, Amphenol, FCI, Helicoil, Heyco, Hirose, JAE, Molex,Omron, PEM, Panduit, POP, RAF Electronics, Richo, Shercon, Southco, TEConnectivityValue-added (product) services: Visit website.Website: http://www.heilind.com, http://www.dbroberts.com,

DEE ElectronicsRank: 292500 16th Ave. SW, Cedar Rapids, IA 52404; (319) 365-7551Distributor type: SpecializedManagement: Todd Gifford, president; Brian Gifford, CEOMajor lines: Visit website.Value-added (product) services: Assembly, Sub-assembly, cable/harnessassembly, control panel assembly, kitting, part/component modification,custom packaging/labelingWebsite: http://www.dee-inc.com

Digi-Key Corp.Rank: 4701 Brooks Ave. South, Thief River Falls, MN 56701; (218) 681-

6674; (800) 344-4539Distributor type: BroadlineManagement: Ronald A. Stordahl, chairman, CEO; Mark A. Larson,vicechairman; Dave Doherty, president & COO; VPs: Chris Beeson, Kevin Brown,Linda Johnson, Rick Trontvet, Mark Blais, Tom Busher, Roy Lunde, TeriIvaniszyn, Rich Myers, Jim Ricciardelli, Chad Broadwell, David Stein, RandallRestle, Paul Dosser; sales@digikey.com, sales contactMajor lines: Analog Devices, Linear Technology, Maxim Integrated,Microchip, Molex, Murata, Panasonic, TDK, Texas Instruments, TEConnectivity, Vishay, etc.Value-added (product) services: Assembly, cut tape, reeling, kitting,programming, and battery packsWebsite: http://www.digikey.com

Diverse ElectronicsRank: 355400 Thimens Blvd., St. Laurent, Quebec, Canada H4R 2K9; (800) 381-7308Distributor type: BroadlineManagement: Rick Masciotra, president, CEO; David O’Brien, COO; JohnMassi, VP; Roussos Koliakoudakis, sales contact; Ingrid Bergh; sales contactMajor lines: Panduit, Yageo, Hitano, SunLED, HSM, Wieland, ECS, ILSI, E-Switch, Apem, Keystone, KangYang, UTC, Henkel-Loctite-Bergquist, Stannol,Apex-Weller, Vision Engineering, Extech, SCS-Desco, MG Chemicals,Chemtronics, Brady CanadaValue-added (product) services: Tape and reeling, component labeling,device programming, pin cutting, lead trimming & forming, BGA reballing,custom packaging, component marking (Kapton/poly labels, laser mark, inkdot), kittingWebsite: http://www.diverseelectronics.com

East Coast Microwave Sales and Distribution LLCRank: 4270 Tower Office Park, Woburn, MA 01801; (800) 786-2576Distributor type: SpecializedManagement: Alan Keith Mond, president & CEO; Jack Barry, chiefprocurement officerMajor lines: Visit website.

Value-added (product) services: Visit website.Website: http://www.ecmstockroom.com

Electro Enterprises Inc.Rank: 163601 North Interstate 35, Oklahoma City, OK 73111; (405) 427-6591Distributor type: SpecializedManagement: Marilyn Enright, president; Andy Enright, COO; Nathan Little,sales contactMajor lines: Amphenol PCD, Array Connector Corp., Corsair ElectricalConnectors, Delphi Connection Systems, DRI Relays, Harbour, HoneywellSensing & Control, RMS Connectors, RSCC Aerospace, Sabritec, Souriau,Sumitomo, TE Deutsch, TE Connectivity, Winchester Electronics, WL GoreValue-added (product) services: Build military connectors, fiber-optic cableassemblies, cut terminal boards to size, and kittingWebsite: http://www.electroenterprises.com

Electronic Connector Company-ECCORank: 49

6332 South Central Ave., Chicago, IL 60638; (773) 767-2000, (800) 742-3262Distributor type: SpecializedManagement: Bernard Gizzi, president; Michele Thelen, COO; Kevin Hayes,quality & assembly director; Marc Natola, product & marketing directorMajor lines: Aero-Conesys, Amphenol Aerospace, Amphenol Industrial,Cinch, Glenair, ITT Cannon, Molex, OttoValue-added (product) services: Connector assembly, custom kitting, cutwire & cable, labeling, laser marking, small component assembly &modifications, switch assembly, and crimping/soldering/weldingWebsite: http://www.eccoconnectors.com

Electronics Supply Co., Inc.Rank: 434100 Main St., Kansas City, MO 64111; (816) 931-0250Distributor type: BroadlineManagement: Joanne LaBelle, chairman & CEO; Janet Niekamp, president;Robert Niekamp, COO; Kirk LaBelle, VP; Donn Weisser, chief procurementofficer; Bill Neustadt, sales contactMajor lines: APC, Belden, CommscopeValue-added (product) services: Panel assembly, kittingWebsite: http://www.eskc.com

Fedco Electronics, Inc.Rank: 471363 Capital Drive, Fond du Lac, WI 54937; (920) 922-6490Distributor type: SpecializedManagement: Stephen Victor, Jr., chairman, CEO; Peter Victor, president;Weldon Peterson, CFO; Thomas Santy, VP; Joel Petersen, VP; Dennis Boelter,chief procurement officer; Joel Peterson, sales contactMajor lines: Enersys, E-One Moli, Panasonic, Saft, VartaValue-added (product) services: Battery pack assemblyWebsite: http://www.fedcobatteries.com andhttp://www.energyplusbatteries.com

Flame EnterprisesRank: 1721500 Gledhill St., Chatsworth, CA 91311; (818) 700-2905Distributor type: Specialized ElectromechanicalManagement: Michael Epstein, chairman, CEO; Neil Rostholder, COO; PeterEpstein, president; Dave Boush, chief procurement officer; Michi Yoshima,sales contactMajor lines: Amphenol PCD, Esterline/Leach, Electrodynamics, Electroswitch,Hartman, L-3, Labinal, Rebling Plastics, Sagem, Sensata Technologies, TEConnectivityValue-added (product) services: N/AWebsite: http://www.flamecorp.com

Future ElectronicsRank: 3237 Hymus Blvd., Pointe Claire, Quebec, Canada H9R 5C7; (514) 694-7710Distributor type: BroadlineManagement: Robert Miller, chairman, president, CEO; Pierre Guilbault, VP;Dan Casey, VP; Karim Yasmine, VP; Sam Abrams, VP; Todd Baker, VP; JoeVincelli, sales contactMajor lines: Visit website.Value-added (product) services: Kitting, technical design support services,lighting solutionsWebsite: http://www.futureelectronics.com

Gopher ElectronicsRank: 40222 Little Canada Rd., St. Paul, MN 55117; (651) 490-4900

Distributor type: Broadline with electromechanical focusManagement: Jeff Mrozinski, chairman, CEO; Whit Carnes, president; SheilaDougherty, supply chain manager; Rick Kosiarek, sales manager; ChrisO’Donnell; Director of IT and Marketing; Dave Mancuso, production andquality managerMajor lines: Aplus, Bussmann by Eaton, Carling Technologies, Eaton,EBM/Papst, Grayhill, Honeywell, Mechatronics, Panduit, TE ConnectivityValue-added (product) services: Flat flexible cable assembly, value-addedcustomization, cable harness, DIN rail/panel build, sensor and switchassemblies, custom “connectorizing of fan and blower assemblies, and heavygauge wire assembliesWebsite: http://www.gopherelectronics.com

Hammond Electronics, Inc.Rank: 314494 N. John Young Parkway, Orlando, FL 32804; (407) 849-6060Distributor type: SpecializedManagement: John Hammond, president; David Klein, CFO/VP Finance;Bruce Garner, director of sales & marketingMajor lines: Hammond Mfg, Honeywell, Indium, Kingbright, Panduit,Pentair/Schroff, Samtec, TE/AMP, TE/P&B TE/RaychemValue-added (product) services: Cable assembly, electromechanicalassembly, UL508A panel assembly, switch assembly, bar coding, wire cutting,stripping & terminationWebsite: http://hammond-usa.com

House of BatteriesRank: 3410910 Talbert Ave., Fountain Valley, CA 92708; (800) 432-3385Distributor type: SpecializedManagement: Don West, president; Maggie West, CEO; Mel Weis, VP; TerryRagone, chief procurement officer; Carlos Gonzalez, sales contactMajor lines: Duracell, EnerSys, Energizer, FDK, Panasonic, Saft, Samsung,Sony, Tadiran, VartaValue-added (product) services: Design and custom assembly of batterypacks for every chemistry, testing and hazmat shippingWebsite: http://www.houseofbatteries.com

Hughes-PetersRank: 19

8000 Technology Blvd., Dayton, OH 45424; (937) 235-7100Distributor type: BroadlineManagement: Michael Okel, president; Donna Hensley, VP; Mike Smith, VPMajor lines: Apem, EBM, Honeywell, Littelfuse, NMB, Schurter, Mechatronics,Omron, Schroff, ZFValue-added (product) services: Visit website.Website: http://www.hughespeters.com

IBS Electronics, Inc.Rank: 303506-D Lakecenter Drive, Santa Ana, CA 92704; (714) 751-6633Distributor type: Broadline specializedManagement: Bob Tavi, chairman, president, CEO; Rob Tavi, COO and salescontact; Yassi Tavi, VP; Ferry Tavakoli, chief procurement officerMajor lines: Ametherm, Analog Devices, Cal-Chip, Diotec, ECI Caps, Etal,Genteq, Henkel, Hi Tech Resistor, Isocom, KEC, Maxim, Molex, Omron, TEConnectivityValue-added (product) services: Kitting and cable assembliesWebsite: http://www.ibselectronics.com

Kensington Electronics, Inc.Rank: 3911801 Stonehollow Dr., Ste 150, Austin, TX 78758; (512) 339-3300Distributor type: BroadlineManagement: Doris Rabbitt, chairman; Patrick Rabbitt, president; CaseyCavender, VP; Terence Rabbitt, VP; Sean Joseph Donovan, sales contact;Bonnie Shores, sales contactMajor lines: Autosplice, Fischer Connectors, Halo Electronics Inc., JAE, SmithsConnectors (Hypertac), StaubliValue-added (product) services: Kitting, cable assemblies, connectorassemblies, special packaging, and customizationWebsite: http://www.keiconn.com

March ElectronicsRank: 32T25 Feldland Street, Bohemia, NY 11716; (800) 444-6056Distributor type: BroadlineManagement: Diane Vilardi, chairman; John Vilardi, president; SteveMendelson, VP; Ron Alonso, chief procurement officer; Matt Parish, salescontact

Major lines: Visit website.Value-added (product) services: Connector assembly, kitting, cableassembly, bar codingWebsite: http://www.marchelectronics.com

Marsh ElectronicsRank: 251563 S. 101st Street, Milwaukee, WI 53214; (414) 475-6000Distributor type: BroadlineManagement: John Casper, president; James W. Banovich, CEO; Jim S.Banovich, VPMajor lines: ASC Capacitors, Eaton Cooper Industries, Otto, United Chemi-Con, Vishay, ZF CherryValue-added (product) services: Cutting/stripping/marking of wire, wireharnesses, cutting tubing, ROHS soldering, light mechanical assemblies,kitting, special packaging, indicator light assemblies, lead tinning (Visitwebsite for complete list.)Website: http://www.marshelectronics.com

Master ElectronicsRank: 101301 Olympic Blvd., Santa Monica, CA 90404; (888) 473-5297Distributor type: Broadline/IP&EManagement: Jamil Nizam, president; Ike Nizam, CEO; Riad Nizam, SVP sales,chief procurement officer and sales contact; Amir Nizam, VP of eCommerce &marketing; Ty McFarland, VP of logistics & global distributionMajor lines: C&K, Honeywell Sensing and Control, Omron, Panasonic, TEConnectivityValue-added (product) services: Custom printing, packaging, fan assembly,cable assembly, and power testing: http://www.masterelectronics.com/vaWebsite: http://www.masterelectronics.com

Metuchen Capacitors Inc.Rank: 482139 Hwy. 35, Ste. 2, POB 399, Holmdel, NJ 07733; (800) 899-6969Distributor type: Limited LineManagement: Gary Ficsor, president; Steve Ficsor, CEO; Lisa Mace, VP;Steven Young, VPMajor lines: Visit website.Value-added (product) services: Testing, soldering, burn-in, filter plates,

marking, specialty capacitorsWebsite: http://www.metcaps.com

Mouser ElectronicsRank: 71000 North Main Street, Mansfield, TX 76063; (817) 804-3800Distributor type: CatalogManagement: Paul Andrews, chairman; Glenn Smith, president,

CEO; Pete Shopp, VP; Mark Burr-Lonnon, VP; Jeff Newell, VP; Kevin Hess, VP;Hayne Shumate, VP; Raju Shah, VP; Todd McAfee, VP; Scott Brown, VP; CobyKleinjan, sales contactMajor lines: AVX, Altera, Amphenol, Analog Devices, Avago Technologies,Kemet, Littelfuse, Maxim Integrated, Microchip, Molex, Murata, NXP, ONSemiconductor, Panasonic, Phoenix Contact, STMicroelectronics, TDK, TexasInstruments, TE Connectivity, VishayValue-added (product) services: Cable assembly, chip and crystalprogramming, kitting, broken pack quantities, local tech supportWebsite: http://www.mouser.com

Newark element14Rank: 9*300 S. Riverside Plaza, Chicago, Ill. 60606; (800) 463-9275Distributor type: CatalogManagement: Graham McBeth, president, Premier FarnellMajor lines: N/AValue-added (product) services: Visit website.Website: http://www.newark.com, http://www.element14.com

NRC Electronics, Inc.Rank: 236600 Park of Commerce Blvd., Boca Raton, FL 33487; (561) 241-8600Distributor type: SpecializedManagement: Dennis Eisen, CEO; Eric Eisen, VP; Tom Consiglio, chiefprocurement officer; Steve Moss, sales contactMajor lines: http://www.nrcelectronics.com/products.aspxValue-added (product) services: Barcoding, testing on demand, FAEsupport, parts standardization (http://www.nrcelectronics.com/services.aspx)Website: http://www.nrcelectronics.com

PEI-GenesisRank: 112180 Hornig Rd., Philadelphia, PA 19116; (215) 673-0400Distributor type: SpecializedManagement: Steven Fisher, chairman, president, CEO; Peter

Austin, VP of product management, marketing & training; John Rozanski,sales director North America; Steve Hutchinson, sales director Europe; DavidShen, sales director AsiaMajor lines: Amphenol, Anderson Power Products, Cinch, Esterline, FilConn,ITT Cannon, Souriau/Sunbank, TE DeutschValue-added (product) services: Connector design & assembly, custompackaging, kitting, custom bar coding, marking, labeling, and specialtyservices (http://www.peigenesis.com/en/value-added-services/custom-packaging-and-kitting.html)Website: http://www.peigenesis.com

Phoenics Electronics Corp.Rank: 1531 Nagog Park, Acton, MA 01720; (978) 856-0111Distributor type: Specialized/limited lineManagement: Peter Rooks, chairman, president, CEO, COO; Sheri Klatsky, VP,chief procurement officer; David Owens, sales contactMajor lines: Cinch, Cavium, Finisar, GE, Micron, MicrosemiValue-added (product) services: Labeling, programmingWebsite: http://www.phoenicselectronics.com

Powell ElectronicsRank: 13T200 Commodore Dr., Swedesboro, NJ 08085; (856) 241-8000Distributor type: SpecializedManagement: Ernie Schilling Jr., CEO; John Barrington, VP and sales contact;Todd Bethea, VP; Rodney Sellers, VPMajor lines: Amphenol, Glenair, Honeywell, TE ConnectivityValue-added (product) services: Kitting, cable assemblies, and connectorassembliesWebsite: http://www.powell.com

PUI Projections Unlimited, Inc.Rank: 3615311 Barranca Parkway, Irvine, CA 92618; (714) 544-2700

Distributor type: SpecializedManagement: David R. Herring, president; David Burgener, VP; Travis Griffin,VP and sales contactMajor lines: Visit website.Value-added (product) services: Fan & fan tray assembly, cable and harnessassembly, tape & reeling, heat sink & thermal management assembliesWebsite: http://www.gopui.com

RFMW Ltd.Rank: 22188 Martindale Lane, San Jose, CA 95119; (408) 414-1452Distributor type: SpecializedManagement: Joel Levine, chairman, president, CEO; Steve Takaki, VP andsales contact; John Hamilton, VPMajor lines: Qorvo, Skyworks, Ampleon, MACOM-Metelics, Rosenberger,Peregrine, Carlisle, Sangshin, P1dB, API, SmithsValue-added (product) services: Cable assemblies, die handling, die visualinspection, special marking, tape and reel, hybrid assembly, custompackaging, parametric test, evaluation boards, partscreening/sorting/binning, and lead trimming/forming/tinningWebsite: http://www.rfmw.com

Richardson Electronics, Ltd.Rank: 2040W267 Keslinger Rd., LaFox, IL 60147; (630) 208-2200; (800) 348-5580Distributor type: SpecializedManagement: Edward J. Richardson, chairman, president, CEO; WendyDiddell, COO; Greg Peloquin, EVP; Robert J. Ben, CFO; Kathleen M. McNally,SVP, Global Supply Chain; Philippe Valy, sales contactMajor lines: Anokiwave, Cornell Dubilier, CPI, Dynawave, LS Mtron, MACOM,Ohmite, Qorvo, Starpower, Tecate Group, Thales, Transphorm, United SiliconCarbide, WanTcom, VishayValue-added (product) services: Private labeling, component sorting,component testing, ECCN/ITAR control programs, and special packaging(military)Website: http://www.rellpower.com

Sager ElectronicsRank: 919 Leona Dr., Middleborough, MA 02346; (508) 947-8888; (800) 724-3780

Distributor type: SpecializedManagement: Paul Andrews, chairman, CEO; Frank Flynn, president; BruceKellar, senior VP of sales; Faris Aruri, senior VP of marketing; Shannon Freise,VP operationsMajor lines: Artesyn, EBM-Papst, Honeywell, Laird Technologies, Mean Well,Molex, Omron, Phoenix Contact, Samtec, Sensata Technologies, SL Power, TEConnectivityValue-added (product) services: Modular power supplies, custommodifications, setpoints and adjustments, power cycling and HALT testing,wire harnessing, series and parallel connections, enclosures, special packagelabeling, bar coding, rail cutting & assembly, switch assembly, bag & tag, cut-to-length services, kitting, engraving, UL certified for repackaged recognizedcomponentsWebsite: http://www.sager.com

Sherburn Electronics Inc.Rank: 41175 Commerce Dr., Hauppauge, NY 11788; (631) 231-4300; (800) 366-3066Distributor type: SpecializedManagement: James Burke, president; John Odenthal, VP; Gerard Barry,sales contactMajor lines: Burndy, EHC, Kilovac, Ohmite, PAAL Technologies, Rayovac,Schneider Electric, Shock Watch, Struthers Dunn, TE ConnectivityValue-added (product) services: Visit website.Website: http://www.sherburn.com

SMD Inc.Rank: 271 Oldfield, Irvine, CA 92618; (949) 470-7700Distributor type: SpecializedManagement: Rich Unruh, president; David Herrera, VP; Pete Ainsworth, VP;Will Kullman, VP; Sean O'Bannon, VP; Paul Klein, VP; Jeni Rodriquez, chiefprocurement officer; sales@smdinc.com, sales contactMajor lines: Cal Chip, CIT, Ecliptek, ECS, EDAC, EPCOS, E-Switch, HellermannTyton, King Cord, Johanson, KEMET, KOA, Kycon, NIC, Novacap, OST, Oupiin,Pentair, RCD, Samtec, Singatron, TDK, World Products, YazakiValue-added (product) services: Cable assembly and testing, kittingWebsite: http://www.smdinc.com

Steven Engineering, Inc.Rank: 18230 Ryan Way, So. San Francisco, CA 94080; (800) 258-9200Distributor type: SpecializedManagement: Bonnie A. Walter, chairman; Paul E. Burk III, president andsales contact; Bryan J. Wolfgram, CEO & COO; Kevin F. Mutto, chiefprocurement officerMajor lines: Banner Engineering, E-T-A, Honeywell, IDEC, Mersen, PhoenixContact, Rittal, Schneider Electric, SMC Pneumatics, Turck, Value AddedServicesValue-added (product) services: Kitting, cable assemblies, rail assemblies,engraving, enclosure modifications, pneumatic assemblies, terminal blockmarking, custom modification, etc.Website: http://www.stevenengineering.com

Symmetry Electronics Corp.Rank: 245400 Rosecrans Ave., Hawthorne, CA 90250; (310) 536-6190Distributor type: Specialized/Limited lineManagement: Gil Zaharoni, chairman, CEO; Scott Wing, president; DavidBeck, VP; Clancy Barham, VPMajor lines: AMD Embedded, Digi International, Fujitsu, LatticeSemiconductor, Mediatek, Micronas, Nordic Semiconductor, Realtek, SiliconLabs, Taiyo Yuden, TelitValue-added (product) services: Cellular and cloud services, testing, customengineered solutions, exclusive development kits, design services, cellularand cloud plans for M2M/IoT applications, programming, kittingWebsite: http://www.symmetryelectronics.com

TTI, Inc.Rank: 52441 Northeast Pkwy., Ft. Worth, TX 76106; (817) 740-9000Distributor type: SpecializedManagement: Paul Andrews, CEO; Chris Goodman, CFO; Tom Vanderheyden,sales contactMajor lines: Amphenol, AVX, Bourns, Delphi, FCI, Glenair, Honeywell, KEMET,KOA, Littelfuse, Molex, Murata, Nichicon, Ohmite, Omron, Panasonic, PhoenixContact, TDK/Epcos, TE Connectivity, VishayValue-added (product) services: Connector assembly, product specialservices, packaging, labeling

Website: http://www.ttiinc.com

URS ElectronicsRank: 50

123 NE 7th Ave., Portland, OR 97232; (800) 955-4877Distributor type: BroadlineManagement: Earl Twietmeyer, chairman; Mark Twietmeyer, president andsales contact; Mark Godfrey, chief procurement officerMajor lines: Axis, Belden Wire & Cable, Cincon, Eaton, Panduit, Pelco bySchneider Electric, Phoenix ContactValue-added (product) services: Kitting, control panel assembly, designsupport, cable assemblies, terminal block assemblies, terminal block labelprintingWebsite: http://www.ursele.com

Waldom Electronics Corp.Rank: 211801 Morgan Street, Rockford, IL 61102; (815) 968-9661Distributor type: MasterManagement: Basel Nizam, president; Peter Rovekamp, VP; Karen Collins,chief procurement officer; Connie Swenson, sales contactMajor lines: Molex, TE ConnectivityValue-added (product) services: N/AWebsite: http://www.waldom.com