Distributors add design to wish list

Distributors add design to wish listSuppliers and customers are demanding more from distributors and they are responding in style. Mick Elliott says the times are a changing
A distributor designing and manufacturing customised chips for its market-place!! Veteran distribution market watchers must be shaking their heads and wondering.
Or as Fred Trueman might put it, “What the bloody hell’s going off out there.”
What’s going off of course is the firework of dynamics in the component distribution business. Margins are falling, and distributors need to add services which improve profits.
Suppliers are demanding more and more from distributors. Customers, some of whom have joined the distribution channel from being a direct client of a supplier are also more demanding. Supply chain management has long been an important item on their agenda.
Now Avnet is hoping to put chip design and manufacture onto the customer’s tick list when choosing a distributor.
Through its Avnet Design Services unit it will help small to medium size OEM customer design chips using licensed IP cores and then manufacture the parts too. “Its chip design for the masses,” commented Avnet chief executive office Roy Vallee.
The business has its genesis in a long-standing agreement between Avnet and LSILogic. under the deal Avnet has helped customers design custom chips using LSI Logic devices.
The new strategy broadens that approach by adding semiconductor product technologies such DSP and microcontrollers.
Imminent is a license agreement to use Motorola’s MCore IP core, and talks are being held with a raft of other semiconductor makers, including Philips Semiconductors as well as IP core design specialists.
The distributor is also talking to Cadence about franchising its range of design tools.
Avnet Design Services is already in the market supporting customer designs. It has design centres in the US, India and New Zealand to support the effort. It will also open similar design centre to support the European market.
Tesfaye Embaye, vice-president of Avnet Design Services in Europe also plans to hire more engineers to support the new business.
The strategy is intended to strike a chord in Avnet’s target market which is essentially small to medium size enterprises (SMEs) who do not have sufficient design resource in house nor the financial clout to become direct customers of the component supplier.
It also currently takes Avnet further down the road of technical support than its closest competitors.
None have revealed similar plans, but many broadline distributors are beefing up the design support efforts. In the past these have been less than substantial.
Now distributors are deliberately targeting design engineers in OEMs, “those who have got the hands dirty on system design” says one distribution executive.
In reorganising its UKbusiness Arrow established a unit called Arrow product Services. Within that unit resides the design services team which offers design support to all the broadliner’s customers in the UK.
David Spragg, general manager in Arrow Design Services stresses the importance of software expertise within the distribution channel. “There are not that many pure hardware design engineers around nowadays,” he points out.
WBC, which is part of the Veba Elektronik Group, takes a similar tack. “We aim to be at the genesis of a customer’s product design and see it through function definition and function implementation and right on through to the compilation of a bill of materials and production,” observes technical director Stephane Rosa.
How much of this distribution design/sell concept is really new? One UK-based distributor can claim to have been designing customer silicon and getting it manufactured for the past seven years.
Sunrise Electronics, based in Milton Keynes markets and sells exclusively for NEC Semiconductors. It now has a number of UKAsic designs in customer’s equipment which it helped develop and then collaborated with NEC on the manufacture of the devices.
What’s new this time is the sight of a volume distributor making such a commitment in an area which in the past was the domain of the specialist distributor.

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