Digi-Key had a record year in 2017. We reached a milestone of $2 billion for the first time in company history. To break it down, we were up 25%+ globally, 20% in the Americas, and 40% in both EMEA and APAC. We attribute the strong growth to the growing electronics industry as well as the strength of our business model and customer service.
We are currently in a time of great technological advancement. The vast growth in application areas such as IoT, Automotive, Industrial Automation, and AI is opening the door for a rapid increase in new inventions, as well as improvements to existing ones.
We are also seeing more and more people get involved in engineering. The Maker Movement allows anyone of any skill level to tinker around with technology and electronics. Software Engineers are starting to get involved with hardware as the IoT naturally pulls those worlds together. Finally, we’re seeing more involvement in STEM in schools which generates an interest in engineering at a younger age than we had in the past.
To keep up with this increasing demand, we are continually making sure our focus remains on supporting the NPI needs of our customers and suppliers and adjusting our in-stock level to fulfill the needs of the market
Digi-Key is currently in the process of building a 93,000-square-meter expansion that will allow us to expand our inventory even further to meet current and future demands of our customers. It will also allow us to search out the latest and greatest technologies and products from new and existing semiconductor suppliers that will allow us to continue being a one-stop-shop for our customers in all industries.
The project is currently on schedule. The building will be almost 3.5x the size of our existing facility. More visible progress was seen in the April/May timeframe this year with construction at various phases of development into the end of 2020.
Global Trends in EMEA Market
Right now, we are seeing tremendous growth in the EMEA market that is heavily weighted around the Automotive industry and its sub suppliers. More than 30% of the electronic component industry in EMEA involves automotive applications. With the recent urgency around electric and autonomous vehicles, we see this market continuing to grow over the next few years.
EMEA is pushing for Industry 4.0, or “smart factories”, which is a development that originated in Germany. Industry 4.0 gives the ability to cost effectively produce products in smaller lot sizes while providing mass customization within a speed-based structure. This “high mix/low volume” revolution plays right into our core business model. We offer customers access to a wide breadth of product to support bills of material that are changing daily, ship from stock capability, and broken pack quantities to allow them to build to order without experiencing supply chain delays or a buildup of excess inventory on their end. Management of inventory has always been our main focus, but is now coupled with the management of intelligence or data which is a new process and part of the industry transformation.
Industry 4.0 also ties into the always-growing IoT market. Engineers designing for the IoT are often looking for an individual product as well as purchasing a full development system. Our goal as a distributor is to allow them to start their design from a simple block level or a completed reference design or even at the application level, and also integrate and support the key technologies, software, and cloud services that are driving IoT.
Finally, the new GDPR data protection law went into effect May 25th in Europe. There will now be a large effort from all companies to be compliant. This is the start of an important initiative that will change the way companies in our industry reach and engage with customers and offer personalization in their design journeys.
Digi-Key Vision for the Future
Digi-Key’s vision for the future builds on our successes of the past. What we have been founded on and what guides us will continue to do so in the future. As technology and trends change we must adapt and evolve, but at the core our values and goals will still be the same.
We have a mission to empower the imagination of our customers to fuel their innovation. This has and will be done by a focus on having the broadest selection of product available for immediate shipment and a focus on customer service and delighting our customer. We are dedicated on continuous improvement and building teams that create the Digi-Key Difference.