) operating unit, Avnet Electronics Marketing Americas, recently
entered into a distribution contract with Triad Semiconductor. With
this association, the company will be now engage in supplying
Triad's low-cost mixed signal ViaASIC solutions in Americas.
Established in 2002, Triad Semiconductor manufacturers low-cost
mixed signal ASICs through its unique via-configurable array (VCA)
technique. Triad's VCAs have almost the same features as the field
programmable gate arrays (FPGAs) and it also consists of analog
cells, which help in integrating analog and digital circuits.
Now, with the agreement, Avnet's clients in the medical,
industrial, consumer and automotive sectors will be able to easily
integrate various semiconductor solutions through Triad's cost
effective ViaASIC services. Management stated that the contract
would not only broaden the company's product portfolio but also
address the need of the customers more efficiently. Triad's
exclusive IC technique is expected to provide cheaper and faster IC
integration to the company's clients.
The company's continuous contract wins and strategic
acquisitions are expected to boost its long-term potential. During
the fourth quarter of fiscal 2012, revenues from Avnet's
Electronics Marketing (EM) segment declined 5.0% from the year-ago
quarter to $3.76 billion, albeit within management's guidance range
of $3.75 billion to $4.05 billion. However, we can still be
optimistic about a better performance from this segment in the
upcoming quarters. For the first quarter of fiscal 2013, the
segment's sales are likely to be within the management's guidance
range of $3.55 billion - $3.85 billion.
Avnet faces fierce competition from big players in the
semiconductor industry. One of the stalwarts here is
Arrow Electronics Inc.
), which has recently inked two distribution agreements with
Microchip Technology Inc.
) and Intematix Corporation. It remains a formidable rival,
especially in the climate of proactive technological advances.
In addition, there are several other big players such as
Wesco International Inc.
Anixter International Inc.
) in the industry.
The current Zacks Consensus Estimates for the first quarter of
fiscal 2013 and for fiscal 2013 are 84 cents and $4.11,
representing year-over-year growth of (6.79%) and 1.33%,
respectively. The company currently retains a Zacks #4 Rank, which
translates into a short-term 'Sell' rating. However, we are
maintaining a long-term 'Neutral' recommendation on the stock.
ARROW ELECTRONI (ARW): Free Stock Analysis
AVNET (AVT): Free Stock Analysis Report
ANIXTER INTL (AXE): Free Stock Analysis Report
MICROCHIP TECH (MCHP): Free Stock Analysis
WESCO INTL INC (WCC): Free Stock Analysis
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