Mouser Electronics, a global semiconductor and electronic component distributor, has its fingers on the pulse of technological development.
The company, which is based in the US state of Texas, and distributes more than five million products to design engineers worldwide, has benefited from new technology and electrification permeating through industries.
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“There is no sector that is not booming,” Mark Burr-Lonnon, the senior vice president of Mouser’s global service business, tells fDi. Mouser saw its revenue rise across every region in 2021, including a jump of almost 80% in Europe and 64% in Asia.
Mr Burr-Lonnon notes that soaring demand for components has come from applications including artificial intelligence (AI), data centres, electric mobility, the Internet of Things and 5G.
“We are seeing a huge amount of technology being designed at the moment,” he says, noting that more and more electronics are being put into almost every product in development today.
Mouser, which is a subsidiary of Warren Buffett’s Berkshire Hathaway, specialises in distributing small to medium-sized quantities of electronic components to design engineers, who use them as part of research and development (R&D) to improve technology and introduce new products.
“We don’t supply Apple production in China, but we supply Apple in all their engineering sites to get new technology to engineers,” explains Mr Burr-Lonnon. Mouser stocks products from more than 1200 manufacturing brands at its warehouse in the Dallas metro area, and distributes them to customers in 223 countries and territories around the globe.
Amid ongoing supply chain issues, electronics are being increasingly used to transform industries and make products faster and more efficient. Distributors such as Mouser Electronics, which act as the middleman between engineers and manufacturers, are set to continue playing a major role within this.
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Supply chains bottlenecks
Mr Burr-Lonnon says that typically about 70% of what distributors sell are semiconductors, making the silicon-based chips the key driver of the market.
There’s so much need for components right now, our backlog is absolutely huge
But with chip manufacturers still unable to keep up with soaring demand and the long time taken to bring planned additional fabrication facilities online, finding enough stock continues to be an issue.
“There’s so much need for components right now, our backlog is absolutely huge,” says Mr Burr-Lonnon. He adds that in January many semiconductor suppliers were already sold out for the whole of 2022.
Michael Yang, a senior director of semiconductors at consultancy firm Omdia, says that several factors are contributing to this, including increasing demand for processors outstripping supply, alongside geopolitical and technological developments.
“AI and machine learning demand ever-increasing performance and capabilities of the processors,” he adds. Mr Yang notes that while the semiconductor shortage has caused recalibration of electronics-based R&D, distributors help by enabling engineers to find alternative components to those in short supply.
“The value-add is being able to offer multiple suppliers’ products, which have different features and functions that design engineers are able to test and assess,” says Mr Yang.
Mr Burr-Lonnon says Mouser aims to have the “widest stock” of components available in this vein, while manufacturers and supply chain distributors are better placed to meet demand for higher volumes.
Mouser primarily supplies smaller orders to design engineers at original equipment manufacturers (OEMs) and electronics manufacturing service (EMS) companies such as Flextronics, Jabil and Sanmina.
Prototyping facility
Among the top 10 global electronics distributors, Mouser Electronics has been one of the most active foreign investors, according to fDi Markets, a greenfield investment tracker with data back to 2003.
Mouser has support offices in 27 countries, which address questions about components in local languages. Mr Burr-Lonnon says the distributor aims to help engineers in “whatever way they can” and “empower innovation” through partnerships.
“We help start-ups get new technology turned into products, helping them with design tools and components to make their products work,” says Mr Burr-Lonnon.
Mouser has partnered with accelerators in several markets in this vein, such as CRL in the UK. Most recently, Mouser announced a partnership with T Works in April 2021, which will see it support India’s largest prototyping centre in Hyderabad.
Mouser also acts as a supplier of components to start-ups and small and medium sized enterprises (SMEs). Mr Burr-Lonnon says the distributor aims to reduce supply chain barriers faced by Indian makers and be involved in local government-backed technology projects.
Prime minister Narendra Modi has set out to advance India’s electronics industry, including a $10bn semiconductor incentive package. Mr Burr-Lonnon says that India has “future potential” to move beyond low-tech products, but remains behind the east Asian electronics hubs.
“There is no comparison between what is [currently] being designed and worked on in India versus places like China, Japan and Korea,” he says.
Even as “huge amounts of design engineering” still happens in Western economies like Germany, France and the US, Mr Burr-Lonnon says they simply cannot compete with lower cost locations on manufacturing.
Shifting locations
In recent decades, chip manufacturing capacity has increasingly concentrated in east Asia, accounting for three-quarters of the world’s total in 2020, according to the Semiconductor Industry Association.
Governments across the world, notably in Europe and the US, are rolling out major incentives to develop domestic plants and reduce their reliance on Asia. Intel recently announced plans to invest at least $20bn in two new Ohio-based chip factories, in what was the US state’s largest ever investment.
“More manufacturing in the US is great, but it being in China or anywhere else doesn’t really affect us,” says Mr Burr-Lonnon, who notes Mouser’s ability to source components globally.
He believes it would be “good to change” the dominance of a few companies, such as Taiwan’s TSMC, which make up a large proportion of the industry’s output. But he notes there are still unanswered questions about the implications of pushing companies to develop more local capacity.
Geopolitical developments aside, the outlook for the industry is strong. The global active electronic components market is forecast to grow at an annual average rate of 9.2% to reach almost $530bn by 2028, according to Research and Markets.
For Mouser, the aim is to play a major role in pushing that forward. “We want to drive the market globally and help new technology get out there,” says Mr Burr-Lonnon.
This article first appeared in the February/March 2022 print edition of fDi Intelligence.