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Home » Avnet CEO Sees Reasons to Be Bullish Going Forward

Avnet CEO Sees Reasons to Be Bullish Going Forward

January 4, 2010
Barron's

Avnet CEO Roy Vallee, quoted in a Barron's article,  says that "the supply chain was in reasonably good condition" heading into the downturn, with high inventory turns and capacity-utilization rates in the 80 percent to 90 percent range. As demand slowed, "there was a dramatic reaction by all participants to cut inventories and manufacturing capacity." In hindsight, he adds, "the whole supply chain overreacted...and is now trying to get caught up."

Now, there are promising signs that underlying demand is improving. "The strength of our Asian business would cause me to say digital consumer demand broadly is pretty good," Vallee says, adding that "industrial demand also is improving." Meanwhile, IT business remains strong in Asia and is improving in the Americas (though Europe lags behind those markets).

Research firm Gartner recently said that global chip revenue will be down 11 percent this year, marking the second consecutive down year in semis, an historic first. Vallee thinks that the extended downturn sets up the sector for an impressive rebound; he sees double-digit gains in 2010, which is consistent with Gartner's forecast for 13-percent growth. 

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Logistics Global Logistics Inventory Planning/ Optimization Business Strategy Alignment Global Supply Chain Management High-Tech/Electronics Pharmaceutical/Biotech
KEYWORDS Business Strategy Alignment Global Logistics Global Supply Chain Management High-Tech/Electronics Inventory Planning/ Optimization Logistics Pharmaceutical/Biotech Supply Chain Analysis & Consulting
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