A LESSON IN LATERAL BUSINESS How are topical, domestic and environmental factors affecting the industry?

Christian Lynn, editor of Electronics, speaks with Mike Britchfield, vice president of sales, EMEA, Analog Devices, on the recent statistical feedback from the component market and how concerns, such as Brexit, are affecting the market’s trajectory

Christian Lynn: With recent stats showing a 1.3 per cent decline in billings for components, there is a blip on the electronics radar. Do you think the industry is in a positive or negative position moving into the next 12 months/long term?

Mike Britchfield: Having worked within the industry for over 35 years, I’ve experienced many economic cycles. These cycles present variations in terms of business activity, as highlighted in the recent case study that you refer to. The lasting effects of these troughs and upswings can vary. In this case, the European context is significant. For example, the 5G cycle is underway: a communications ‘explosion’ with an increased number of base stations, which has had a surprisingly positive impact on the European market, despite the apparent decline. Indeed, the recent 5G Trial Snapshot Report from the GSA (Global Mobile Supplier Association) identified that over 326 separate 5G trials and demonstrations have been identified globally to date, with some 134 mobile operators announcing 5G trials in 62 countries, setting the stage for the wireless standard that will carry us into 2030 and beyond. Looking forward, we see no slowdown in the generation and consumption of mobile data. But the future of connectivity is also about connecting to the world around us, as we enter the emerging age of machines. As with the communications market, the industrial market and the encouraging influence of Industry 4.0 - the digital factory and its focus on Industrial IoT technology - is driving the European market, providing new levels of productivity. So, why are we seeing this decline in billings? There’s the intimation of a decline in economic activity, though not as serious as previous instances, which is causing a flattening of demand.


There could still be an impact on supply chains, although work is currently being undertaken to prevent any disruption to these. Ultimately, in the medium term, the UK has a large enough economy, and its businesses are innovative enough, for Analog Devices’ to remain optimistic in terms of future business activity.

However, in terms of a positive or negative position, I believe that the net impact on ADI is minimal, as the drop has not been particularly dramatic to date. We’re taking a metaphorical breather before the positive market trends - such as Industry 4.0 and 5G - start driving demand once more.

CL: A cause for the decline could be Brexit - the strain it’s applying to outsourcing perhaps? Or, alternatively, it could be the EU - the burden of regulation compliance could be a persistent issue? Does Analog Devices hold an optimistic or pessimistic perspective on Brexit and its effects on the market decline?

MB: Uncertainty is never good for business and there is an uncertainty surrounding Brexit. There was some pre- emptive inventory building ahead of the original Brexit deadline but now, due to the postponement, there has been some consideration as to how companies can manage the inventory that they already have, to prepare once more - this could explain the billings decline. In terms of the regulations, the reality is that companies have grown accustomed to dealing with this legislation, so it isn’t an issue. With regards to Brexit, Analog Devices’ will find a way to adapt to the outcome of UK-EU negotiations.

Analog Devices’ new office block in Hayes, London

CL: How is Analog Devices trying to establish and/or differentiate itself from the market, in spite of Brexit? Considering the new office in Hayes, London, it appears that the company is prioritising its UK exploits?

MB: As the person responsible for the EMEA region, I focus on finding an opportunity for our business, irrespective of whether it’s the UK or any country within the EMEA area. A quarter of our business is driven from Europe, so it remains key to our company prospects. Our differentiation within this market is our ethos - a focus on innovation – which will drive our growth in the long-term: ADI spend 20 per cent of turnover on R&D, in areas such as 5G transceivers/power amplifier controllers and electrification. Returning to the subject of the UK outlook, I believe our ethos is complemented by forward-thinking companies within the UK, who are seeking growth. There are a lot of ecosystems that stem from within the UK, covering the gamut of emerging technologies. As such, the chance to open a new and significant office building in Hayes helps Analog Devices establish a presence within those ecosystems, not least as a potential employer for talented engineers, out of education, with the know-how to work with the newest technology, and on the latest research.

Analog Devices


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