IC distributor Wenye recently announced that it will spend US$13.5386 million to acquire 100% of the equity of Analog World in South Korea. Since Analog World is mainly the distribution agent of Analog Device in South Korea, it is undoubtedly a layout strategy for Wen Ye, who is about to end his agency rights with Texas Instruments at the end of the year, to make up for his market share.
Wen Ye said that he had obtained the agency rights of Analog Devices in Taiwan in the past. In order to consider the long-term layout of the company, he also obtained the agency rights of Analog Devices in the mainland market in the first quarter of this year. Now, through Apart from filling the gap in Texas Instruments by acquiring 100% of Analog World's equity to gain access to the Korean market, what opportunities does Wen Ye see?
Following closely behind Texas Instruments, Analog Devices ranks second in the analog IC market
Looking at the main business of Analog Devices, you will find that this is a company based on analog ICs (Note: ICs that process analog signals, due to their ability to withstand high voltage, Withstand large current, mainly used In companies that mainly focus on power supplies, digital-to-analog converters, etc., relevant competitors include Texas Instruments, STMicroelectronics, etc. It is reasonable to speculate that Wenye's move this time is to narrow the existing channel advantage. -How, by grabbing the agency rights of Analog Devices, to make up for the lost business of Texas Instruments.
The performance of the analog IC market is promising. Currently, Texas Instruments still leads the market with a market share of about 19%, followed by Analog Devices with a market share of 10%.
According to IC Insights statistics show that the global analog IC market size reached US$55.2 billion in 2019. The top 10 market share companies accounted for 62% of the market share, an increase of 2% from the previous year. Currently, Texas Instruments still ranks first in the analog IC market, with a market share of as high as 19%; AD Analog Semiconductor ranked second with a market share of about 10% due to its acquisition of Linear Technology in 2017 to enhance the company's product portfolio.
The dual advantages of the analog IC industry: wide application and high annual compound growth
Analog IC is mainly used in a wide range of applications, including industrial, consumer electronics or automotive, etc. The shadow of analog IC can be seen. Take Analog Semiconductor as an example. The main battlefield for analog IC is industrial applications, accounting for nearly 50%, and the rest include cloud communications, automotive and consumer electronics.
predicts from IC insights that by 2022, analog IC will be an important driving force for the growth of the semiconductor industry. By then, the annual revenue will reach 74.8 billion US dollars, and the annual compound growth rate will reach 6.6%.
Wen Ye said that analog IC is not a high-priced product for enterprises, but from a distribution perspective, analog IC has better gross profit performance and can also demonstrate the value of distributors between upstream manufacturers and end customers. .
Distributor value: Provide one-stop service and information flow
Wen Ye, for example, because analog IC terminals are widely used, it is relatively complicated for upstream manufacturers to develop or communicate with end customers, so Wen Ye’s role It will assist upstream manufacturers to provide technical support and services to downstream customers, solve the problems of upstream manufacturers, and also devote more efforts to research and development. Therefore, Wen Ye must work hard on the team of application engineers (FAE) to be faster. Solve the needs and problems of end customers and provide better service quality.
Wen Ye said that because analog IC products are widely used, they can better highlight the value of distributors. Wenye can provide customers with more complete one-stop services and solutions
In addition, distributors also play the role of providing information to assist end customers in the selection of product solutions, how to choose the best cost and best quality performance. Wen Ye also revealed that this acquisition of equity may not have "immediate" performance results, but in the long run, if Wen Ye can demonstrate the advantages of a distributor, it will definitely contribute to future gross profits.
