Market for independent distributors - opportunities for OEMs and EMS.
Gold digging in China: the call of the (Far) East.
 Depending on the region, the entry barriers for western independent distributors into the Asian market are large. The individual markets isolate themselves heavily by means of regulatory requirements. They are primarily interested in companies bringing in technology, and investments into the country.
Procurement activities brought independent distributors to Asia. This area is now turning to be an appealing sales market. This applies not only to western OEMs and EMS, who have relocated their production there, but western suppliers are sought by local Asian EMS companies.
In Gerd Bruegel’s opinion, good business opportunities for independents arise everywhere. Other than those have been covered by western component manufacturers, a niche still exists.
»To prevail the highly competitive European market«, comments Bruegel, »it is often that five or more distributors are involved in the purchase of a particular type of semiconductor. There are lucrative business opportunities in Asia, especially in those sectors served by limited representatives.«
Eastern Europe.
In the eyes of independent distributors, the Eastern European market is increasingly important. Even though fewer personnel is placed in Eastern Europe when compared with the situation in Asia. Eastern European market, where most of the western manufacturers relocate, turns to be attractive market.
Individual local EMS and OEMs, who are interested in low purchasing prices, open the market for independent distributors. While Eastern European countries who have recently joined the European Union, including Poland, Czech Republic or Hungary, have becomes distributors’ focus for quite some time, non-EU countries such as Russia, the Ukraine and Belarus are now also attractive.
A market for Independents.
Experts estimate the share of independent distribution in TAM (Total Available Market) accounting for 8 to 10 percent. This tendency is increasing. In a few years time, 12 to 15 percent could account for this market segment …
(Article "Opportunities for OEMs and EMS" – download in pdf format)
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