What's Farnell (element14) up to? And, semicon equipment bubble burst? Whoa!!

I’ve received two interesting reports today. One, from Premier Farnell on a name change and another from The Information Network on the troubles of the semicon equipment industry.

First, Premier Farnell plc announced the launch of a new, market leading customer proposition in Asia offering a significantly expanded inventory of products relevant to electronic design engineers, next-day delivery in Asia Pacific and an enhanced range of services, under the name element14.

I have not quite understood this move!

I wonder how is this going to help Farnell! It has had element14 for so long now. Hey, I even provided Farnell feedback on the element14 website back in July 2009 (in Bangalore), and even discussed with its executives in Singapore when they sought further queries on the feedbacks provided by me.

What’s Farnell (or element14) really up to?
At least, I don’t see any newness in Farnell’s element14 release. Unless, there’s a move to dilute the Farnell brand itself, which is and will be really strange!

I for one felt element14 was (and is) doing magnificiently as a standalone entity, and has done a great job in building a community of design engineers around itself.

The release also says that the Group’s businesses located in Australia, China, India, Malaysia, Singapore and New Zealand will be known as element14 and will offer customers and suppliers a multi-channel, multi-currency, multi-language way to source their product needs, quickly and easily.

So, I checked Farnell’s India site. Now, the India website of Farnell is confusing me. There’s a message on the site that says ‘Farnell Electronics (India) Pvt Ltd name change in progress’.

Where is the need to call Farnell by its original name in the UK, and why rename it elsewhere, especially in Asia? Is it that the brand name is not well known across Asia? What’s wrong in the first place with having two separate standalone and successful identities such as Farnell and element14?

It would be prudent on Farnell’s part to maintain element14 as the community it has been originally meant to be. For instance, why call Farnell India as element14 India all of a sudden?

I hope to hear from my friend, Ravi Pagar at Farnell soon, hopefully, in the morning. Have sent him the query. Name change or not, best wishes to element14/Farnell in its future endeavors.

Semicon equipment industry bubble burst?
Now to the second one! I also received an interesting report from The Information Network — where it says that the global semiconductor equipment industry bubble has burst!

It has also made interesting use of an analogy around “The Emperor’s New Clothes,”  a short tale by Hans Christian Andersen and the global semiconductor industry.

The report has set me off thinking. Just how can the global semiconductor industry afford to not overlook repeated warnings? This is peculiar! What could be the repercussions of a deteriorating semiconductor industry? The Information Network also mentioned industry pushouts. How will these benefit the industry in the long run?

I hope to speak with Dr. Castellano regarding the study and get some replies on my queries.

What’s very interesting is a prediction made at the end of this report. The Information Network says that firms such as AMAT, AMD, APD, ASML, AVZA, CAJ, FJTSY.PK, HPQ, INTC, MU, NVLS, OMG, TOELF.PK, TOSBF.PK and other IC, equipment, and material suppliers have or will be announcing their results soon. “Nearly all will point to a slowing in the next quarter in their releases and conference calls. It will get worst in the following quarter!”

Wow! That will be significant! Hey folks, I’m going to watch all of these firms very closely as they annouce their quarterly results. Suggest, you do the same.

Farnell looking to convert 3,500 prospects this year in India!

Now that’s what I call aggression!

Last July, I had the pleasure of meeting Ms Harriet Green, CEO, Farnell Electronics, a part of the Premier Farnell group of companies. It is soon going to be a year since the company set up presence in India. Farnell has aggressive plans for India, with the company likely to look at converting at least 3,500 prospects this year.

I met up with Nader Tadros, Commercial Marketing Director APAC, Premier Farnell (see picture here), and Navin Honnavar, marketing manager, Farnell Electronics India Pvt. Ltd to get an update on Farnell.

According to Tadros, Farnell is said to be the number 1 small-order high service multi-channel distributor in the world. “We carry obver 3,500 leading suppliers and 450,000 product stocks globally. We have 36 transactional websites in 23 languages,” he added.

Farnell currently has six warehouses — one in America, and two in Europe and three in Asia — Sydney, Shanghai and Singapore. In India, it now has nine branch offices, and one contact center and one global tech center (GTC) — in Bangalore. The GTC provides live chat and board level support, which also translates into global support.

Tadros said that Farnell is aggressively are supporting the EDE (electronic design engineers) community and MRO (maintenance, repair, operatoinal) marketplace. “We have taken particular focus on developing the EDE space, providing support, services and relevant products. We want to make sure the value proposition is mapped on to the EDE needs,” he said. Elaborating on the value proposition, he cited an example of x-ray machine manufacturers.

Global business strategy
Farnell has a four-pronged global business strategy. This includes:
* Focusing on global EDE customer segment.
* Increase business via the Web.
* Internationalization
* Continue to develop profitable MRO business.

Tadros believes that the power of the Web is tremendous. “It is very useful for customers to search and transact. Another area is customer demand. They are looking for efficiencies,” he added. “An important aspect that can help us is that we are able to understand customers; needs. The data that the web search is able to provide gives us the critical information. If a customer searches for a part, and we track that, we are able to service their needs better.”

Hasn’t Farnell been affected by the recession? Tadros said: “We are not immune to the recession. The volatlity is higher, and it is also at the customer level.” Honnavar added: “Our strategy seems to be working for us. We are maintaining our base in the MRO space. We are still pulling in customer requests and still growing.”

So, what else is Farnell doing, besides these activities? Well, it has adopted a multichannel approach for the Asia Pacific region. It has 154 staff in eight call centers, besides being involved in direct and e-marketing. The company has nine local websites — simplified chinese for China, thai for Thailand, and English for India, Malaysia, Singapore, Hong Kong, Philippines, Australia and New Zealand. Besides, it has 103 field sales engineers in 29 sales offices.

Aggressive plans
I started this post by saying I liked Farnell’s aggressive plans. It currently has 2,500 active customers and 9,000 prospects in India alone. The company has a target to reach $25 mn by 2010. It is also a walue added distributor offering products to leading suppliers such as Texas Instruments, Molex, and 3,500 other leading brands.

Touching on Farnell’s clients in India, Honnavar said: “We have independent design houses, resellers, R&D centers, educational centers, government organizations (such as BEL, HAL), etc., among our customers. The prospects includes a huge list of people. We have touched the top layers in tier 2 cities — such as Coimbatore and Ahmedabad. We are looking at converting 3,500 prospects this year.”

More focus on components, SMEs
The components industry isn’t exactly in the pink of health right now. Giving his views on the electronics and components space, Tadros said: “Customers themselves are not able to anticipate the demand for the next quarter or periods. We are seeing that there is still growth in the EDE space and inquiries are still coming in. During a recession, you have an opportunity to distinguish yourself from competition. There is pressure on teams as they have to continually innovate. Customers require more even support, more technical documentation, and look for faster turnaround times.”

Farnell is in a position to help those SMEs who are in the electronics and components spaces. Tadros said that the company can support such SMEs by helping them to build their markets in a timely fashion.

Honnavar added that Farnell is focusing on building a product and purchasing team, sitting out of Singapore and Hong Kong. “Moving forward, you will probably get to see more buying happening in the Asia Pacific region. Going ahead, a lot of sourcing will also be done from India.” The company intends to be extremely close to suppliers, especially in the Greater China region.

Farnell banking big on India

Farnell Electronics, a part of the Premier Farnell group of companies, recently established its sales presence in Pune, as part of its phased rollout plan, post the launch of the company in June 2008.

Headquartered in Bangalore, the company has already established seven other branch offices in cities, including Bangalore, Coimbatore, Ahmedabad, Chennai, Hyderabad, New Delhi and Mumbai, and, plans to set up another branch in Kolkata.

Harriet Green, CEO, said, “We have put up a new India Web site, which has over 450,000 products. Our site also supports live chat. We also have eight call centers. Our support is largely for the SMEs. We are a publicly filed company in India.” The company has over 2 million customers worldwide.

On Farnell, she further added: “We have a great supply chain ecosystem for our customers. This is total care for customers. As an example, we stock all of TI’s 40,000+ products. We take a Web order every 8 seconds. We are extending this investment in India.”

Ravi Pagar, Director, Farnell Electronics, added that users are able to search on the Indian Web site for components and products by part numbers.

The company has two technology centers, one in China and another in Bangalore, India. According to Green, Farnell’s goal is to achieve $1 billion for the Indian market.

She added: “We have already invested Rs. 200 million in the purchase of Hynetics, besides hiring people and on infrastructure. We will spend another Rs 200 million on branches, warehousing, etc.”

Complying with RoHS, REACH and WEEE
With so much of focus nowadays on green electronics, it is natural for Farnell to be one of the leading proponents. Green said, “Our components are REACH, RoHS and WEEE compliant.”

She added: “Unfortunately, the lead content in Bangalore is quite high. We will also work with the environmental agencies here and work on resolving this problem.”

Farnell is said to be the only components distributor in China, which is stocking products that are RoHS compliant. “We give a guarantee on our invoice that our products are RoHS, REACH and WEE compliant. In China, each province has zones where electronics products are dumped,” she said.

According to her, all major components manufacturers were now becoming environment compliant. “The supply chain is more now in balance as the electronics environment is maturing.”

Speaking on partnerships, she noted: “We are exclusive partners with Altera in Asia. We also have a special partnership with TI. We have over 4,500 authorized partnerships globally, with companies in semiconductors, passives, electromechanical, connectors, wires, screens, ICs, repairs, power, displays, flexible substrates, optos, etc.”

Pagar added: “Sony Ericsson is setting up a design center in Chennai. We are partners globally, and they wanted to replicate that in India. We have a similar kind of relationship with GM.”

Highlighting the fact that India has a great design industry, he felt that if more distributors like Farnell were to enter India, it would only go on to help the country.

Karnataka semicon policy very soon!

The government of Karnataka will be announcing a semiconductor policy very soon, according to Katta Subramanya Naidu, the minister for Excise, Information, BWWB, IT and BT, government of Karnataka, while delivering the opening address at the ISA Excite organized by the India Semiconductor Association.

Over the last several years, India has been a destination favored by almost all leading global semiconductor companies for setting up their development centers for semiconductors and embedded designs.

The size of the Indian semicon design industry is currently $6 billion across VLSI and board design, and embedded software, with the potential to be around $9 billion by 2009. There are nearly 200 companies and it employs over 130,000 professionals, all over India, with the potential to employ over 180,000 by 2009. The Indian semicon design industry has a CAGR of nearly 22 percent versus the global average of 7-8 percent.

Nearly 90 percent of the VLSI design work is done out of Bangalore alone. Appropriately, the ISA is headquartered in Bangalore, the heart of India’s chip industry. The minister said: “The conducive work environment policies and high-quality talent are the important attractions for both MNCs and Indian companies to set up shop here. We value the contribution of our technology leaders and engineers to build the economy of the state and make it a global leader. Bangalore is next only to Silicon Valley, California, in terms of the work done here.”

New centers likely
In future, the government of Karnataka wants to look at Mysore, Mangalore and Hubli as important centers to be developed. “These are centers of education with high quality and quantity of engineering talent. Our government is working on improving the connectivity to these cities to help attract investment there, as well as the expansion of companies from Bangalore to other towns within Karnataka,” he added.

Welcome the ISA initiative to launch Excite, a program for the semiconductor and ecosystem companies, he noted that it was a good platform to understand the technology trends and to collaborate with the right partner.

He said: “Karnataka today is at the crossroads. We have the direction and leadership of Hon’ble chief minister Yeddyruppa. He is extremely committed to the cause of making Karnataka as the most preferred destination for the semiconductor industry and electronics hardware manufacturing. My (BJP) government would be glad to extend any support for your business plans in the state.”

Semicon policy soon
The state government plans to announce a semiconductor policy in the very near future, actually. It has also earmarked land for a hardware technology park near the new airport (in Devanahalli).

The government is also thinking in the lines of finishing schools in PPP mode as the semiconductor industry is technology driven, and demands continuous training and re-skilling of the workforce.

Initiatives in Karnataka
The minister pointed out that his government has been taking several pro-active steps for further accelerating the growth of these sectors, as well as for their expansion in tier II and III cities. For these two sectors, the government proposes to identify and set apart exclusive IT/BT zones in Mysore, Mangalore, Hubli-Dharwad, Belgaum, Shimoga and Gulbarga.

Yeddyruppa, the state chief minister, has made an announcement of a number of initiatives to boost the growth and development of IT/BT. A bio-IT park on a 100-acre plot is proposed to be developed with private participation near Bangalore. IT parks, with private participation, would be set up in tier II and III cities. A massive IT city on the lines of the Electronics City near Bangalore is under consideration. Similarly, BT parks are proposed to be set up in Mangalore, Dharwad and Bidar. KEONICS, a government of Karnataka undertaking, will play a major role in development of the IT city, IT parks and computer literacy campaigns.

He added that the state government believes in formulating initiatives and policies in consultation with the industry. The existing Mahithi IT policy is also being revised with inputs from the Vision Group on IT headed by N.R. Narayana Murthy of Infosys.

“The state government would be happy to see IT and BT developments happening in tier II and III cities. We are taking steps to improve and upgrade the infrastructure in these cities. The CM is personally reviewing the construction and upgradation of airports in Mysore, Shimoga and Gulbarga, which will provide vital air connectivity, essential for the growth of industry and business,” he noted.

The NASSCOM-Kearney report has identified 43 potential locations in the country for IT development. The report also suggests measures to be taken to make these locations attractive for IT investments. Recommendations, such as improving the quality of education, imparting employable skills to the uneducated youth, improving infrastructure, particularly, air connectivity, etc., would be taken into consideration.

The minister said: “Our government would take all the necessary steps to ensure that there is no flight of investment to other states, and to make Karnataka the most attractive region for IT/BT investments. We want the semiconductor industry to grow and flourish in the state.”

Participative semicon policy likely
Elaborating on the proposed semiconductor policy for Karnataka, Ashok Kumar C. Manoli, principal secretary to the government, said: “When you look at India, it is software, and when you look at China, it is hardware. We should make a beginning and try and become the global capital for both hardware and software. We need to design such a policy that design activities continue and also facilitate manufacturing.”

He added: “We will come up with a very participative semiconductor policy. It will also look at addressing infrastructure requirements for manufacturing setups.” According to him, the hardware industry is the foundation for the entire revolution, which the government is looking at. He requested all companies present at the ISA Excite to participate at the forthcoming BangaloreIT.com event, and added that the state government was committed and fully geared up to deliver.

Announcing the ISA Excite initiative, Sanjeev Keskar, country sales manager, Freescale Semiconductor India Pvt Ltd, said: “We need to collaborate with the right partner. The ISA felt the need to arrange an ecosystem meet. Telecom and healthcare are the two drivers of importance.” The ISA has plans to take Excite to other cities too, possibly, New Delhi, focusing on industrial and consumer.

The one-day ISA Excite event had an exhibition running simultaneously, featuring about 40 companies. These included ARM, Farnell, Ittiam Systems, Broadcom, Cosmic Circuits, Windriver, Wipro, HCL, AMDL, LSI Logic, TI, NXP, Cisco, Synopsys, SemIndia, Freescale, Open Silicon, MindTree, AMD, Analog Devices, RFMD, Cir-Q-Tech, NewEra, STPI, etc.