Distribution: 2016 Preview, 2017 Forecast – Digi-Key’s opinion

Posted 28 February 2017

Answers from Dave Doherty, President and COO of Digi-Key


How was the Year 2016 for your Company?

Doherty: 2016 was an exciting year, driven by a strong demand by both established OEMs and new product start up activity.  We expanded our business in NA and grew even faster with strong double digit growth in Europe and Asia.  This growth occurred while we made significant enhancement to our internal ERP platform necessary to enable ongoing scalability of our business.


Are there significant challenges that you expect to face the next year?

Doherty: Our business strengthened in the 2ndhalf of 2016 and we enter 2017 with high optimism.  While uncertainty exists in the macro economic conditions in certain regions, our model is based on having the broadest selection of product available for immediate shipment.  Those attributes of our model become our strength in periods of uncertainty.  For many of our competitors, uncertainty signals a time to retrench and pull back.  The excitement comes from a resurgence in new design activity credited with a decade + focus on STEM initiatives that has stimulated a generation of entrepreneurs enable through integrated electronic solutions that reduce design cycle times.


In the last 18 months, have you been seeing any important evolution in your approach to the market?

Doherty: The B to C lessons learned from the consumer space are seeing quick adoption in the B to B world.  Customers want connectivity, machine to machine information exchange to reduce latency and allow them to manage by exceptions.  Though we have also been viewed as a pioneer on the web in migrating from our original catalog, the pace of change is even accelerating with users looking for ever more functional utility from the web.


Which sector do you consider with the major opportunities (i.e. automotive, IoT, wearables…)

Doherty: This is a tough question that we are frequently asked.  The nature of our model causes us to reach the widest customer base and we tend to examine horizontal vs vertical trends.  For example, there continues to be a desire for smaller packaging sizes, lower power consumption and network connectivity.  Those attributes could describe remote diagnostic medical equipment to IoT to Automotive.  We service it all.  A better indicator of what is trending in the vertical spaces is to examine what is being exhibited at shows like CES.  The answer ultimately is “all of the above” and also includes the traditional industrial, medical and smart power segments.


What product line do you consider more interesting and innovative?Doherty: 

Doherty: The fastest growing areas are RF/Wireless, typically led by smaller, more innovative companies and integrated solution companies.  Many of our customers want a development/evaluation board or some type of module for their initial prototyping with others adopting that integrated solution into their low volume production requirements.  It’s a tradeoff between speed (time to market) and absolute lowest cost of optimising a design from the device level.

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