Electronic Component Wholesalers

Brief Excerpt from Industry Overview Chapter:

Companies in this industry distribute electronic components including semiconductors, connectors, electromechanical devices, and other similar products. Major companies include Arrow Electronics and Avnet (both based in the US) and WPG Holdings (Taiwan), Future Electronics (Canada), and the Premier Farnell (UK).

Global semiconductor sales, a significant component of worldwide electronic component distribution, generate $300 billion annually, according to the Semiconductor Industry Association. Asia/Pacific represents 54 percent of the global semiconductor market, while the Americas comprise 18 percent.

The US electronic component wholesalers industry includes about 14,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $210 billion and is expected to grow at a high rate in the next two years. Key growth drivers include technology innovations and demand by consumers and businesses for computers and telecommunications devices.

COMPETITIVE LANDSCAPE

Demand for electronic components is driven largely by business and consumer purchases of computers and telecommunications equipment. The profitability of individual companies depends on business volume and correct merchandising, or stocking the products buyers want. Large companies have advantages through buying in high volume at discounted prices, more-efficient inventory management, and the ability to fulfill large customer orders. Small wholesalers can compete by offering specialized products or better service.

The industry is concentrated: the 50 largest companies account for nearly 60 percent of industry revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include semiconductors (computer chips); connectors; and electromechanical devices. Other products include disk and tape drives, computer subsystems,...