Independent Distribution
growth of the year will be slow, but business will pick up in the second half. However,Magee does not expect growth to be as strong in 2011 as it was in 2010.
interconnect areas," saidMagee. Still,Magee says the outlook for the year is positive. "I view
it as first half correction and a second half pickup." Andrea Klein, CEO of independent distributor Rand
"I thinkwewill have a big second half and I think itwill surprise everyone and therewill bemore shortages," said Andrea Klein,CEOof Rand Technology
"America II has been in business for
22 years and last year was our second largest year ever. It was only surpassed by 2000," he said.
Capacities cut
Magee said growth for independent distributors was driven by production cutbacks by component manufacturers in 2009. "The supply chain was in flux. Decisions were made to cut capacities and there was an unanticipated spike in demand," saidMagee.
He said business actually started to
pick up in the second half of 2009. "We had a 15-16month period where eachmonth was better than the previous.With employee layoffs and capacity reductions at suppliers, lead times stretched to 30 ormore weeks for some parts andmany parts were on allocation," saidMagee.
Such a supply scenario is always
good news for independent distributors -- and bad news for buyers -- because it bringsmore buyers into the openmarket and prices increase.
However, the scenario has now
changed. "Through Januarywe have not seen the same robustmarket," said Magee. "Themarket is receding and has been for a fewmonths. The fourth quarter of 2010was good, but not at the same level as Q2 and Q3. That trend continued in January," he said.
He said lead times have eased back.
Semiconductor lead times are about eight to ten weeks and inventory levels are higher than last year.
"The only area where we see some difficulty delivering is passive and
March 2011 | 35
Technology in Irvine, Calif., agrees that the second half of the year will be strong. She says business will likely be slower in the first half asmany companies "take a breather" from
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