Avnet looks to programmable IC market with latest acquisition

By Suzanne Deffree, Managing Editor, News -- 7/1/2008

Looking to the programmable IC market, distributor Avnet Inc Monday announced its latest acquisition, Source Electronics Corp.

The acquisition of Source, a provider of outsourced custom programming services for ICs, represents the continuation of Avnet’s extension into adjacent service markets, as well as its efforts to create sales opportunities for its semiconductor distribution products.

The electronics supply chain giant did not disclose what it paid for the Hollis, NH-based company, but stated that Source generated $82 million in revenue in 2007.

As described by Avnet, the newly acquired company provides programming services using technically advanced proprietary programming processes that result in industry-low defect rates and rapid order fulfillment.

Source supports its OEM (original equipment manufacturers), contract manufacturer, and component manufacturer customers from facilities in Brazil, China, Mexico, Singapore, and the United States. Its customers span a variety of end markets, including consumer electronics, automotive, mobile communications, telecommunications, networking, computing, and enterprise storage.

Source will be integrated into the services operations of Avnet Logistics, a division of Avnet that delivers logistics and programming services globally.
 
“The combination of the extensive programming operations of Source and Avnet Logistics will create an industry leader with global scale and scope advantages,” Jim Smith, president of Avnet Logistics, said in a statement Monday. “It will also strengthen our competitive position with regard to outsourced service offerings while positioning Avnet Electronics Marketing as the primary global distributor serving the programming needs of the electronics industry. In addition, we will deepen our involvement with many of our suppliers as Source is the programming partner for many IC manufacturers’ direct sales.”
 
The programmable IC market is forecasted to reach approximately $50 billion in 2011, a unit compound annual growth rate of more than 17%, according to research cited by Avnet in its statement.
 
“With the acquisition of Source, we gain significant technical expertise and an experienced management team that has earned an excellent reputation in the programming services market. We also expand Avnet’s presence in the growing South American market through Source’s Brazilian operations located in Sao Paulo and Manaus,” Smith said.

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