Mouser Electronics is reporting global sales up 6% so far this year buoyed by strong performances in Europe and north America.
“Europe is up 8.5% and the US is up 9%,” says Mark Burr-Lonnon, Senior Vice President, EMEA, Asia and Global Service. “Asia/Pacific is down 2%, driven by the impact of Coronavirus in China, all other countries in the region are reporting increases.”
Poland, Israel and surprisingly Italy have been making the running in Europe. UK sales are up 4.1%, and even with its automotive industry ailing, Germany is up 7%.
Eyeing the probable impact of Coronavirus on supply chains, Burr-Lonnon explains, “In the short-term its good news, we have lots of inventory so we can help customers with any supply chain worries over the next three to six months. We can spread the inventory, especially the new product introductions. We want to seed the market so it’s not in our interest to sell the lot in one go.”
He has two concerns. One is the availability of passive components made in China, most notably multi-layer ceramic capacitors (MLCC) and chip resistors. “There’s just not enough product coming out of China, I’ve heard of some companies at 30% of their usual production output, others at 70%.
Most of these products come out of China, so there is no one who can step in and fill the gap.”
“We’ve not seen any price increases yet,” Burr-Lonnon continues, “certainly not at Mouser, we have inventory bought before the Coronavirus outbreak so we can hold prices.”
“It is possible that we will start to see prices on some passive components rise in the near future, some suppliers are looking at a 30% price increase, and it’s possible that MLCC prices will be rise by as much as 50% to 70%.”
Burr-Lonnon is confident that the fundamentals are in place for the market to grow. He indicates 5G – “the technology uses 15 to 20 more devices than previous generations,” he remarks – as well as a growing electric vehicle market, both cars and the infrastructure required to support them and Industry 4.0.
“We could see allocations kicking in by the end of the year if these markets take off.”
It would be good timing. Mouser’s warehouse expansion at its Texas headquarters is moving forward apace.
“The walls are up, we will be despatching products from it in the next three months, and we will move to fully automated output in the September-October timeframe.”