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INTERVIEW WITH We had the opportunity to conduct an interview about the future and history of DigiKey with their Vice President for the AsiaPacific region, Tony Ng. DigiKey just celebrated 50 years in business. Tell us a bit about the company’s history. Q Like many great companies, DigiKey evolved from a passion, in this case, ham radio. In the early 1970s, Dr Ronald Stordahl started selling the “Digi-Keyer” – a kit for ham radio operators that helped transmit Morse code. That led to selling components – first to electronic hobbyists and then to the commercial market. For 50 years now, we’ve built upon that initial passion, thanks to the hard work, commitment and entrepreneurial spirit of our more than 5000 employees worldwide, 929,000+ customers, 2400+ suppliers and myriad global partners. DigiKey now not only distributes electronic components but provides digital solutions and tools to engineers, designers and makers in more than 180 countries. A A lot must have changed in the electronics industry over the last 50 years. What are some of the latest changes and innovations you have undertaken? Q Over the past 50 years, the people of DigiKey have consistently had their fingers on the pulse of the industry, reacting to changing needs and offering a vast spectrum of components to fuel production into the future. We’re excited about industries like healthcare, automotive, energy, 5G and IoT, as they continue to drive innovation in 2023 and for many years to come. The electrification of everything is another key trend that will drive significant growth this year and beyond. Every forecast indicator suggests that the long-term demand outlook for the upcoming decade is very robust. DigiKey’s significant increase in capital infrastructure investments over the last three years puts us in a strong position to service those anticipated customer needs. Those investments include our Product Distribution Center expansion, more robust and predictive web search, higher inventory levels and the start of more self-serve order management tools aimed at providing a frictionless digital experience. The impact of the recent economic cycles on DigiKey and the industry has proven that A we have the resiliency, perseverance and grit to overcome obstacles. While the shortages we’ve experienced since early 2020 have eased somewhat, many products remain out of stock or available in limited quantities. How much longer will it be before the vast majority of products are in stock and lead times are more reasonable? Q While the availability of semiconductors is improving, long lead times are still plaguing certain product segments. DigiKey’s goal is to make it as easy as possible for customers to find alternative solutions that may fit their needs. When a customer tries to order a part number from our website and it is out of stock, DigiKey automatically presents potential alternatives from our database of nearly 60 million part number cross-references. Our customers have spent the past few years pivoting and embracing agile decision-­ making processes. While it has been an incredibly challenging time, we believe that those who have embraced and accepted these challenges will come out stronger on the other side because it is through challenges that we grow the most. A Those shortages also caused quite considerable price increases in some product lines, well above the rate of inflation (which is pretty high these days). Will those items that experienced significant price increases come back down any time soon? Q The supply chain disruptions and inflation in materials, labour, transportation, and energy costs forced many suppliers to raise prices in 2022 and early 2023. It is impossible at this point to say whether those price increases will continue. A What new suppliers are you working with that you’re particularly excited about? Q 80 Silicon Chip Australia's electronics magazine siliconchip.com.au Some of the key new products now available through DigiKey include: ROHM’s GNP1070TC-Z and GNP1150TCA-Z Gallium Nitride FETs Knowles’ V2S200D Digital Voice Vibration Sensor Renesas Electronics’ RZ/T2L ARM® Cortex®-R52 Microprocessor EAO’s Series 09 Universal modular key switches/joysticks Molex’s PowerWize Blind-Mate Interface (BMI) connectors A ◘ ◘ ◘ ◘ ◘ We’ve noticed that you can sometimes ship orders within a couple of hours of us having placed them. How do you achieve such quick turnaround times? Q That speed is all thanks to our amazing Product Distribution Center (PDC) staff! They are dedicated to ensuring that any order received by 8pm Central time (about 11am AEST or 8am AWST) are shipped that same day to the 180+ countries around the world that DigiKey currently ships to. The team now receives a bit of assistance from our new, fully automated Product Distribution Center expansion (PDCe) warehouse that we opened last year. Our distribution centre was designed to handle broken-pack quantities to support engineering and low/mid-level production requirements. The PDCe is nearly fully automated to achieve that purpose, with products stored in trays that can be configured in various means to support bulk, tube, reel or other manufacturer packing conventions. That tray is brought to a pick station and the targeted product is highlighted with a light to minimise errors. In addition to utilising available third-party systems, DigiKey has also designed its own systems that further automate the picking process and improve traceability and more accurate pick quantities. The largest component of our new automated system is the KNAPP Order Storage and Retrieval (OSR), which provides the right parts to the picker every time, eliminating walk time and providing an ergonomic environment for the picker. This high level of automation improves efficiency by up to 35% for picking and greatly improves packaging quality and efficiency. The PDCe features two primary sorting systems to provide redundancy in the case of a breakdown and provide for future growth. The new facility has over 27 miles (43km) of automated conveyor belt, and an average order will travel more than 3200 feet (975m) inside the building. The new PDCe also provides additional A siliconchip.com.au DigiKey recently opened its 2.2 million square foot/204,400m2 Product Distribution Centre expansion (PDCe) to keep pace with growing demand. room for our carrier partners to grow and incorporate their own automation on-site, allowing for ongoing and improved delivery options to customers. Are there any interesting component trends specific to the Australian/New Zealand market that you can tell us about? Q To begin with, the Australian/New Zealand market is not small. The countries are packed with lots of smart engineers, innovations and R&D activities, plus domestic manufacturing capabilities. These are all critical to supporting the domestic demands from smart cities, factory automation, agriculture, mining, personal healthcare and more. Due to the relatively smaller volume and competition on time-to-market, we are seeing more and more demand shifting to modules in sensor and RF applications. These really work in compliment to our new franchise addition in recent years. As we continue to expand our product portfolio, we are not limiting ourselves in the fields of electronic components. We are also expanding our sourcing globally for new technologies and products that our customers search for. A How do you decide what products to carry to ensure you meet customer needs as closely as possible? Q A Certain industries have become hot topics and will continue to drive the Australia's electronics magazine demand in the coming years: healthcare, new energy, EVs, industrial automation, telecom/5G/6G, IoT etc. Together with our website traffic and keyword monitoring, these fuel the new franchises as well as SKU count addition. The more customers utilise our web tools, the more we will be able to help them in the short and long term. You say that you have a commitment to innovation. Besides supplying components, what else do you do to support that aim? Q We see 2023 as the year that engineers are finally getting back to innovating and creating new designs. While we acknowledge there are still some supply chain challenges, on the whole, engineers have better inventory access than they’ve had for several years now. We see them taking that to their advantage and really digging into the next phase of innovation in the space. All indications are that 2023 is shaping up to be a good year of new product development for our engineering customers. DigiKey is looking forward to the continued innovation of our customers that will come in 2023, and we are excited to enable the world’s ideas. As a company, DigiKey has invested in innovations, including cut tape printing, providing more products and services within the ecosystem and expanding the DigiKey Marketplace, providing customers around the world with even more reason to make DigiKey their first stop in the design process. SC A August 2023  81