Keep Your Foot on the Gas

Estimated reading time: 2 minutes

Digi-Key’s Mike Slater is vice president of global business development and responsible for supplier and customer business development around the world. After his presentation at the EMS Leadership Summit at IPC APEX EXPO 2023, Nolan Johnson reached out for additional market perspective. Here, Mike talks about the current component supply chain and what to expect in the upcoming years. He provides insight for assemblers and OEM design teams alike.

Nolan Johnson: Your presentation at the EMS Leadership Summit was well received. What was the general theme of your remarks?

Mike Slater: I've been at this business more than 25 years and it tends to be cyclical. We’re always interested to know where we are in the cycle, and how it affects our ability to get product. What does the overall demand look like?

Where do we see the market headed in the next five to 10 years? Over the past 20 years, the market has grown annually on average about 6-7%. The global electronics or semiconductor market will tell you there really hasn't been anything new that has driven that growth in that time. But we see some significant pockets of opportunity in the next five to 10 years.

We break it down into a few areas: automotive and industrial, compute and data storage, and wireless. If you look at the electric vehicle (EV) market and electrification, you’re just scratching the surface. EVs are just one small piece of the whole pie. Whether we’re talking about EVs, or even gas- or diesel-powered cars, electronics included in these vehicles has multiplied, and that will have a huge impact on the industry.

When you look at the support infrastructure it will take to manage the number of electric vehicles by 2025, we are nowhere near where we should be. We must get to a point where EVs are convenient to charge and a part of our everyday lives.

Johnson: Of those three market drivers you mentioned, which is the most significant?

Slater: They’re all significant in their own way. Specific to Digi-Key, our industrial customer base is probably at the center of what we do and will be key for us in the long term because that sector represents most of our customer base. We certainly touch the EV market and the EV connectivity and infrastructure—we touch virtually every customer but at different levels. For us, it’s the industrial and internet of things applications that will affect our customers.

Johnson: In your presentation at the leadership summit, you looked ahead in the next decade. What was your analysis?

Slater: We believe there will be a short-term correction in the market, something that’s already started. In the past two years, there has been exponential growth across many businesses. At Digi-Key, we are up more than 80% over the past two years. We are seeing a leveling off in the market, but we expected it, and think it’s a short-term dynamic.

To read this entire conversation, which appeared in the April 2023 issue of SMT007 Magazine, click here.