New-Tech Europe Magazine | Q4-2020 | Digital Edition

at the moment, and we continue to focus on the breadth of inventory from all the suppliers, which means that it's there for the engineer to buy. On one of our regular supplier calls, the CEO of one of our major interconnect suppliers commented that he believed that there is a tidal wave of innovation about to happen, and that it is a once in a lifetime opportunity that is driven by electronics. We share his thoughts. His insight resonates with what we’re experiencing at Mouser, we see a lot of potential for us going forward. There is a hotbed of innovation happening in engineer’s homes at the moment, and much of that will come out into the prototype stage soon. As we entered 2020, we knew that with 5G and other major market trends the next couple years would be good, but because of COVID, there are innovations in many other areas of our industry too. Have you noticed any specific changes in the medical electronic sector and the demand for components? Mark: Medical has always been a good sector for us, but unsurprisingly we've seen a huge increase in demand, particularly across all types of sensors. Microcontrollers, analog, LCD displays, and pretty much anything that goes into a ventilator have grown significantly. Demand has been well above normal and maintaining our high inventory levels has meant we can deliver from stock – something that we are particularly pleased to be able to offer considering the intended purpose and urgency of these components. What is the forecast looking like for the remainder of 2020 and into 2021? Are there any predictions you are confident about? Mark: We started the year forecasting 8% growth overall, being equal across our three regions of Asia, the Americas, and Europe. As of

eval kits are all showing strong sales for us this year. Interestingly, these dev tools are easy for engineers to buy themselves, so some engineers, say a hobbyist working for an OEM, can work on a design idea from home. I’d say we’re shipping more development tools now than we ever had before. How are your customers responding to changes COVID has forced on them, and what are you doing differently? Mark: We’ve certainly seen a lot of design engineers set up their bench at home. California, for example, has been badly hit with virus cases, but there is a lot an engineer can do from home. I think some of those design engineers are happy because they're sitting at home doing their work and nobody is disturbing them. Some testing might be a challenge to achieve at home, but some engineers appear to go back to the office lab just to perform specific tests before returning home. Jeff: On that note we know that suppliers say they are having very effective calls with their customers on new design starts, using Zoom and Microsoft Teams etc. Calls appear to be very productive in that you can quickly navigate through the social introductions and get to the detail really quickly. Customers can have the right people on the call, so the decision- making process can move forward quickly. We think even suppliers have found that doing design work in a virtual setting actually works. Whether this is going to be the way it's done moving forward remains to see, but it is very clear that the design process hasn’t stopped because they can’t physically meet in the same room. Mark: One key decision we took was to maintain our inventory levels. It’s probably not unique, but there's not a lot of distributors who have kept the inventory levels as high as ours. We have around $800 million in inventory

down significantly in 2019 because of its strength in 2018. And everybody that I was talking to, internal and external, expected that to come back. That has not happened. While the sales are down considerably, the volume sold is only down by about 3%, so we are still shipping a lot of product. A lot of growth was predicted to come from the automotive sector, but clearly that isn’t doing so well now. We’re still shipping a lot of different product lines into our automotive customers, but the quantities are relatively small, highlighting that it is more likely to be design activity rather than consumption for production. Another category of products worth mentioning is discretes. They were up a lot in 2018, down in 2019 and have yet to recover their position. We can’t work out why, and the discrete suppliers we talk to share the same concerns. It probably requires more research and insight to make a valued judgement on this, but since discretes go into pretty much everything, it is odd for one technology to be down so much while other areas of our business are not. The only conclusion we can make is that there is either a glut of inventory, or the industries that were affected negatively; automotive, industrial, oil and gas must take a decent amount of that product, and they're just not buying right now. On the positive side, we expected to see growth coming from microprocessors, microcontrollers, analog, and interconnect. Those categories are up this year, and even some passive areas, such as resistors and inductors are doing very well. Another area we wanted to focus on this year is dev tools. We’ve signed new suppliers, new lines, and many of our existing suppliers are coming out with new dev boards and evaluation tools too. The industry continues to make it easier for design engineers to design in new products, so dev boards and

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