Semiconductor Distributors Enjoy Soaring Sales In China

According to the market research firm iSuppli Corp., semiconductor distributors in the country are expected to enjoy nearly 30 percent growth in 2010, matching the robust and thriving consumer electronics industry in China.

Distributors will account for 51 percent share of semiconductor sales in the worlds most populous country, with sales in 2010 up by 28.5 percent to $33.1 billion. On the other hand, direct sales from semiconductor suppliers will make up the remainderat about $31.7 billionor 49 percent.

Overall, Chinas semiconductor sales from both distributors and chip suppliers are projected to reach $64.8 billion in 2010, up a remarkable 30 percent from $49.5 billion in 2009.

The two channels in 2011 will be virtually tied at $35.4 billion each.

Mergers and acquisitions serve as important growth tool

Distributors were strong in the memory, logic and analog component markets in 2009, said Horse Liu, Manager (China Research) at iSuppli Corp. Distributors also acquired more sensor components business in the industrial electronics and surveillance markets. Semiconductor suppliers, in comparison, continued to implement direct-sales strategies in core chip markets, such as Microprocessor Units (MPU) and Digital Signal Processors (DSP). Among the biggest distributors, mergers and acquisitions have become a favorite tool during the last five years as a means to grow quickly, iSupplis China semiconductor industry research has determined.

World Peace conquers the market

Following the trend, Taiwanese-based distributor World Peace Group (WPG) Holdings has vaulted to a dominant position in China as well as in the rest of Asia. WPGs March acquisition of fellow Taiwanese firm Yosun Industrial Group added to the conglomerates total China revenue of approximately $3.8 billion in 2009.

WPGs continuing efforts to strengthen its role throughout Asia may yet displace New York-based Arrow Electronics from its perch as the worlds largest electronics component distributor. Arrows worldwide electronic component sales in 2009 amounted to $9.75 billion, but WPG is closing the gap fast at $9.57 billion, iSupplis China market figures show. In third place is Arizona-based Avnet Inc., with $9.18 billion. In China, WPG is first, followed by Avnet and Arrow.

The leading global distributors are expected to continue their M&A strategy within the electronic component space in China. The acquisition targets will be the local Chinese distributors, which so far have been exhibiting healthy growth and excellent product resources. To develop business in new markets, the leading distributors are hoping to obtain core product resources from the localsas exemplified by Texas Instruments tapping Beijing-based SEED Electronic Technology Ltd. to be a distributor in the DSP market.

Suppliers win in the end

Despite the rapid growth enjoyed by distributors at present, semiconductor suppliers in 2012 will begin to take increasing control of the distribution process and start accounting for a bigger portion of semiconductor sales, iSuppli China research indicates. Already, suppliers are implementing strategies intended to reduce their reliance on distributors.

For their part, distributors are thought to be coping currently with a number of challenges, including component shortages, lengthening lead times, rising product costs and complex market conditions.
Learn more about the China market with Lius latest report, entitled Distributor Mergers and Acquisitions Prepare Semiconductor Supply Chain for Rebalancing at http://www.isuppli.com/China-Electronics-Supply-Chain/Pages/Distributor-Mergers-and-Acquistions-Prepare-Semiconductor-Supply-Chain-for-Rebalancing.aspx?PRX

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Wouldnt it be great if everyone could just work from home? You wouldnt have to worry about beating the morning traffic, making sure your shirts are pressed and there would be no one to yell at you for wearing your pajamas to work. But is it a reality?

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As long as the employee has the opportunity to go through the necessary in-house training and has management support available to them as needed, working from home can be beneficial to everyone.

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The entire purpose of having a sales representative is to increase the top and bottom line of your company. However, before you begin to see revenue, your employee will most likely go through a sales cycle of about one to three months, if not more. Until then, your sales representative will most likely not be meeting with any prospects.

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