Microchip ends Arrow distribution relationship, expands reliance on Avnet, Future
The provider of microcontroller and analog semiconductors has added Avnet Memec, a subsidiary of Avnet Electronics Marketing throughout the Americas, as a new distribution partner.
By Suzanne Deffree, Managing Editor, News -- EDN, February 4, 2008
Ending its relationship with Arrow Electronics, Microchip Technology Inc today announced it is expanding its use of the distribution channel through Avnet Electronics Marketing and Future Electronics.
In doing so, the provider of microcontroller and analog semiconductors has added Avnet Memec, a subsidiary of Avnet Electronics Marketing throughout the Americas, as a new distribution partner. Chandler, Ariz-based Microchip already has Avnet Silica serving its European customer base and Avnet Electronics Marketing in Asia serving its Asian customers. Microchip said Avnet Memec's focus and select line card of semiconductor suppliers, concentration on demand creation, and dedicated field application engineers fit its worldwide technical customer support model.
"With this change today, Microchip continues to build on its technical customer support focus with two global distributors, Avnet and Future, in its lineup,” Steve Sanghi, Microchip's president and CEO, said in a statement. “These two global distributors, combined with our regional and specialty distribution partners, support more than 60% of our worldwide business. The entire worldwide distribution network remains fully committed to addressing the needs of Microchip's more than 60,000 customers worldwide."
Roy Vallee, chairman and CEO of Phoenix-based number one distributor Avnet Inc, noted that Microchip has consistently grown market share in its served markets and that Avnet has grown its global presence as needed to better serve the electronics supply chain. "Avnet's global footprint comprised of regionally specialized businesses is ideally suited for meeting the dynamic needs of Microchip and our customers," he said in the statement.
Today’s news, while less focused on Canada-based Future, is also good news for the smaller, global distributor, which has enjoyed a close working relationship with Microchip since the early 1990s.
“We were the first distributor to sell their products to a global customer base,” Robert Miller, president and CEO of Future, said in the statement. “We are excited about Microchip's new global distribution program and the opportunities that it presents to Future Electronics."
Today’s news, however, was not good for Arrow, as Microchip announced that it has terminated its relationship with the Melville, NY-based distributor effective immediately. The relationship with Arrow was limited to Europe and the Americas, and represented approximately 7% of Microchip's sales.
Similarly, in December 2007, analog company Maxim Integrated Products announced it would end its agreement with Arrow in favor of Avnet Electronics Marketing. That agreement also made note of demand creation as a reason behind the change.
Microchip said it is working with all of its channel partners to ensure that its customers have continuity of supply and support through this transition phase and estimated delivery times for most of its products will remain at less than three weeks.
"We believe that today's changes will have substantial long-term benefits to serving the technical and commercial support needs of our customers,” Sanghi said. “This change adds Avnet Memec to our large network of regional distributors that create demand for our products around the world. Additionally this change enhances the strong relationship that we have enjoyed with Future Electronics for the last 17 years. From the corporate revenue perspective, the positioning of our proprietary products will allow a seamless transfer of customers to the new distributor network in Americas and Europe."
