“For designers we’re a one-stop shop”

Avnet, a global marketer and distributor, has two operating groups: $5.9 billion Avnet Electronics Marketing, specializing in electronic components; and $4.4 billion Avnet Technology Solutions, specializing in enterprise computing products and embedded subsystems. EDN Asia recently spoke to Stephen Wong, President, and Ravi Kichloo, President, South Asia & Korea, both of Avnet Electronics Marketing Asia. Excerpts:



What is unique in Avnet’s takeover of Memec?

The acquisition was unique in terms of size and geographical coverage. In terms of size, the acquisition was worth $2 billion. In terms of geographical coverage, Avnet has now spread far and wide across many markets. Memec has a strong presence in Japan, China, Korea, New Zealand and Australia. Japan is a very tough market. But Memec had $160 million revenues in Japan in the last 12 months. Avnet had almost no presence in Japan before the takeover.

From the perspective of the electronics designer, what more should he expect from Avnet now than before the merger?

Avnet and Memec are complementing their strengths to offer customers wider range of products and services. Avnet is strong in supply chain, while Memec in demand creation. Together they are able to offer the complete range of products and services to the designer. An important transition is taking place in the design industry. The number of ASIC design starts is falling while FPGA design starts are rising. Before takeover, we had five technical application centers. Now we have added a sixth one. This is in Hong Kong and deals with FPGAs and ASICs. Programmable design starts present a different set of challenges. We can now provide design references for more areas, at lower cost, in shorter time. Besides reference designs, we also provide training. For the designer we are now a one-stop shop for his entire needs all the way through production.

Are any more consolidations taking place in the distribution market?


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We think of acquisitions every day. Avnet has made some 50 acquisitions in the last 20 years. Acquisitions are a part of our life. Talks are going on in Asia-Pacific for more cooperation and acquisitions. We know for sure that other distributors are also talking on similar lines. Asia is the battlefield for production and growth. So distributors are naturally looking at Asia for growth.

The role of distributors today is far beyond that of merely a distributor of products. How do you see the role of distributors evolving?

Distributors are evolving in two main lines of activities—supply chain and design chain. In the supply chain, distributors need to provide a wide range of products over large geographical areas in minimum time. In the design chain, distributors need to guide the designer to the most appropriate components available for him.

Do you envisage that this evolution will go on to put distributors in competition with ODMs and design houses, just as ODMs have evolved to be in competition with contract manufacturers?

Not in the foreseeable future. We provide reference designs for the customer to customize the design as per his specific needs.

What is your technology mission in Asia?

Avnet Technology Solutions, Asia, is evaluating its options for expansion in Asia, having set up six technical design cells here. It hopes to establish a strong presence throughout Asia via a combination of generic growth and acquisitions, building on Avnet’s relationships with global trading partners. Avnet has defined four Asia regions—two in China, one in South Asia and one in Taiwan. In China, Avnet offers one-stop-shop design services through design centers established in Shanghai and Shenzhen, and through cooperation with more than 20 independent design houses to develop projects, including network solutions, consumer electronics, audio and video products, digital graphics, etc. Singapore is Avnet Asia’s international headquarters. Singapore’s Economic Development Board has awarded Avnet Asia two grants—one for a Low Power Wireless LAN project and another for Bluetooth. In Asia Pacific we are focusing on two fundamental strategies—design chain/demand creation and supply-chain management.