Avnet's Harley Feldberg: embedded in the electronics supply chain
Avnet’s Harley Feldberg discusses serving the embedded design community as part of the overall electronics supply chain.
Interview conducted and edited by Suzanne Deffree, Managing Editor, Online -- EDN, November 17, 2011
Harley Feldberg, president of Avnet Electronics Marketing, global,
spoke with EDN following his recent ARM TechCon keynote
presentation, “Staying Ahead of the Technology Curve.” Feldberg
discussed the changing nature of the electronics supply chain,
distribution, and the semiconductor market, as well as the new
Embedded Software Store, an information
and e-commerce-based Web site focusing on the embedded-design
community. Avnet and its partner, ARM, announced the initiative
at the Santa Clara, CA, event. Excerpts of that interview follow.The topic of your keynote was the changing, evolving market. And the market is constantly changing, more noticeably since the economic shifts that began in late 2008. Where is a distributor like Avnet in all of this, and how does the partnership with ARM fit into long-term strategy?
A: Although distribution covers about 25% of the $300 billion global semiconductor TAM [total available market], we support about 90% of the customers. Distribution’s role is the mass market—that broad amount of small and midsized customers in the tens of thousands. Simultaneously with that large market position that global distribution fills, ARM has been having tremendous success in the last couple of years in expanding its market position out from its traditional, legacy success in smartphones and tablets. We are coming together with ARM [because] its goal is [for] the architecture that originated in those couple of technologies to permeate out to a much wider, broader customer base; that is, the intersection of ARM’s aims and desires and Avnet’s market position.
The launch of the Embedded
Software Store is really
the outgrowth of our having
been working more and
more with ARM on different
initiatives. One thing that has
become very clear to both of
us is that what’s a little different
about the embedded
space is that the companies
developing software to support
embedded designs are
generally small and dispersed
all around the world. If you
use my example of distribution’s
serving 90% of the
customer base, the same
phenomenon exists here. A
main motivation behind this
joint initiative between us is to
create a more efficient connection
between the tens of
thousands of customers and
the hundreds or maybe even
thousands of small embedded-software developers.Being that our intent is not to become a software distributor but rather to continue to be a hardware distributor, we recognize that supporting software is critical to selling hardware. This [site is] all part of ARM’s desire to make it even easier to choose ARM as the design architecture by creating some efficiency on the software-development side. It fits Avnet’s goals because our goal is always to sell more components, more semiconductors.
How are you feeling about the electronics supply chain overall? Many are asking the classic “Are we recovered?” as we move into the fourth quarter and see various financial and analysts’ reports that call supply-chain matters into question.
A: It’s not an industry secret that things have clearly moderated. The $64,000 question out there is, Is this a slowdown, a pause, or just lower demand? Or are these recessionary trends we are seeing? Our opinion continues to be that this [situation] is not a 2009 redo. The things we track—like excess inventory, cancellations, schedules—have remained moderate. They are higher than anyone would like, but that is primarily because demand has come down not because inventory is piling up. My opinion is that although the technology industry has traditionally grown … at a rate higher than the GDP, it’s not immune to the effects of the GDP. I think we’ve hit a soft patch for a while. I don’t see any reasons why things are radically going to change tomorrow, but we are running our business frugally and making sure we make good business decisions. Overall, there is $300 billion of something out there, and it’s not going to $200 billion, but the growth is going to be muted for a while.
Are we talking about a change in the global market, not just a slowdown in demand?
A: Because of the nature of my job, I get to see all regions. If your job was only America for the last five years, [you might feel as if we] were in a recession. I have felt for a while that these [changes] are the natural impacters from what I would call a global realignment. There is still a lot of product being consumed, but it’s not all in the same spot anymore. The long-term winners in distribution have to be global because you have to follow where the business goes. If you fixate on a couple of quarters [of semiconductor-industry growth], it may cause you to make short-term decisions. Clearly, it’s going to be awhile before electronic and semiconductor proliferation goes down, but we are not immune to global impacters.
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