Arrow Inks Agreement with Intematix - Analyst Blog

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Arrow Electronics, Inc . ( ARW ) recently signed a global distribution agreement with Intematix Corporation, wherein it will provide ChromaLit remote phosphor used in LED lighting.

Using remote phosphor in LED lighting has emerged a unique trend that creates opportunities for lighting customers and partners to gain competitive advantage in the market.

Arrow currently offers a broad line of LED lighting solutions as well as engineering and design support through their Lighting Design Center and other tools. The recent agreement with Arrow will enable Intematix to access additional blue LED and associated products.

A number of new LED lighting system manufacturers have adopted ChromaLit to lower costs and increase performance.

Conventional LED designs comprise a blue chip, which is coated with a phosphor compound. ChromaLit uses a phosphor composite that is separated from the blue LED energy source and enables lower system costs, efficient manufacturing processes, exceptional light quality and generates up to 30% higher system efficacy.

Earlier, Arrow Electronics signed a global distribution contract with Microchip Technology in order to improve its customer services by offering a wide array of products.

This agreement will add Microchip's service solutions and several embedded semiconductors, microcontrollers, wireless support solutions and memory devices to Arrow's product database. The recent deal will also facilitate access to Microchip's other service offerings through Arrow's Nu Horizons Electronics.

Management remains optimistic regarding its decision to conflate with Microchip as its improved design and technology would enhance the company's existing product offerings.

Although the recent series of contract wins and acquisitions will positively impact business, economic environment remains a concern. Arrow reported total sales of $5.15 billion in the second quarter of 2012, down 7% year over year and 5.3% sequentially. The current macroeconomic challenges prevailing in the European region and slow growth in China adversely affected the company's business in the quarter.

We currently maintain an 'Underperform' recommendation on Arrow. The stock carries a Zacks #3 Rank, translating into a short-term (1-3 months) 'Hold' rating.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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