DIGITIMES Asia | Tuesday 20 August 2024

The global electronic component distribution landscape shifted in the first half of 2024, with WPG Holdings and WT Microelectronics rising to the top two positions. Meanwhile, Avnet and Arrow Electronics dropped to third and fourth, reflecting varying recovery speeds in the Asia-Pacific and Western markets.

In 2022, Arrow Electronics led the rankings, followed by Avnet, WPG, and WT Microelectronics. In 2023, Avnet overtook Arrow for the top spot. However, by the second quarter of 2024, WT Micro, after acquiring Future Electronics, surged to the top position, followed by WPG, Avnet, and Arrow, as the Asia-Pacific market began to recover from an inventory glut, while Europe and the Americas have been slower in inventory adjustments.

WT Micro chairman Eric Cheng observed that Europe remains in the inventory adjustment phase in the third quarter of 2024 due to weak demand in the industrial control and automotive markets, with completion expected by year's end. WT Micro's industrial control business experienced a quarter-on-quarter increase in the second quarter, benefiting from early inventory adjustments and a gradual recovery in demand in Asia. The company anticipates that third-quarter revenue will primarily come from its core operations, while Future Electronics' revenue is expected to remain flat compared to the previous quarter.

WPG vice president Scott Lin stated that inventory glut in the industrial control and automotive sectors persist, and overall demand remains uncertain. The company expects to benefit from the recovery of server, notebook, and smartphone demand in the second half of the year and growth in North America and Southeast Asia.

Both WT Micro and WPG have continued to focus on the automotive sector. Despite recent challenges in the global automotive market, both companies remain optimistic about the long-term growth of the automotive semiconductor market.

Avnet and Arrow have a pessimistic outlook on the industrial control sector. Avnet CEO Phil Gallagher noted that the European market is underperforming compared to seasonal norms, with significant declines in demand within the industrial and transportation sectors. Although Europe hasn't hit bottom yet, the weakness in its industrial market is putting pressure on overall business.

The North American market is also facing challenges. Although conditions in the Americas have stabilized compared to the previous period, the outlook for the coming quarters remains uncertain due to global economic instability.

Avnet has observed some signs of recovery in the Asia-Pacific region. Gallagher noted that while the recovery in the Asia-Pacific market, particularly in China, is limited, it shows a steady growth trend driven by improvements in the transportation and industrial sectors.

Gallagher believes that recovery in Asia often signals a potential global market turnaround. As the Asian market grows, other regions may gradually follow suit. However, the situation in the coming months requires close observation. The growth of AI is anticipated to positively influence vertical market sales, contributing to an overall optimistic demand outlook.

Arrow CEO Sean Kerins highlighted the recovery in the Chinese market, which has spurred growth in the company's Semiconductor and IP&E (interconnect, passive, and electromechanical) segments.

Kerins anticipates the third quarter will exhibit more typical seasonality in the Americas and Asia. He expects the Americas to remain flat or show slight growth while Europe will continue to decline, albeit at a slower rate than in the second quarter. Overall, the second half of 2024 is projected to outperform the first half.

Source: compiled by DIGITIMES Asia, August 2024

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