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- Changes in distribution market -
http://www.chip1stop.comhttp://www.chip1stop.comMark Kojo
Founder, President & CEOChip One Stop, Inc. October 14th, 2010
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Global Semiconductor Market Changes
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WSTS – Regional statistics (2010 Spring)
FORECAST
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WSTS – Regional statistics (2010 Spring) cont.
1999CY 2000CY 2001CY 2002CY 2003CY 2004CY 2005CY 2006CY 2007CY 2008CY 2009CY 2010CY 2011CY 2012CY CAGR09-12
Worldwide(M$) 149,379204,394138,963140,713166,426213,027227,484247,716255,645248,603226,313290,951307,388320,161 12.3%America 47,478 64,071 35,778 31,275 32,331 39,065 40,736 44,912 42,336 37,881 38,520 48,125 50,401 52,088 10.6%Europe 31,881 42,309 30,216 27,788 32,310 39,424 39,275 39,904 40,972 38,249 29,865 38,183 40,103 41,805 11.9%Japan 32,835 46,749 33,148 30,494 38,942 45,757 44,082 46,418 48,845 48,498 38,300 44,756 47,277 49,187 8.7%Asia Pacific 37,184 51,264 39,820 51,156 62,843 88,781103,391116,482123,492123,975119,628159,887169,606177,081 14.0%Europe - Euro (M Euro) 29,979 46,043 33,659 29,393 28,546 31,709 31,575 31,771 29,927 25,968 n/a n/a n/a n/a n/aJapan - Yen (100M Yen) 37,183 50,451 40,168 38,053 45,032 49,549 48,535 54,024 57,497 50,242 35,786 40,608 42,896 44,628 7.6%
Growth Rate (%) 2000CY 2001CY 2002CY 2003CY 2004CY 2005CY 2006CY 2007CY 2008CY 2009CY 2010CY 2011CY 2012CYWorldwide 36.8% -32.0% 1.3% 18.3% 28.0% 6.8% 8.9% 3.2% -2.8% -9.0% 28.6% 5.6% 4.2%
America 34.9% -44.2% -12.6% 3.4% 20.8% 4.3% 10.3% -5.7% -10.5% 1.7% 24.9% 4.7% 3.3%Europe 32.7% -28.6% -8.0% 16.3% 22.0% -0.4% 1.6% 2.7% -6.6% -21.9% 27.9% 5.0% 4.2%Japan 42.4% -29.1% -8.0% 27.7% 17.5% -3.7% 5.3% 5.2% -0.7% -21.0% 16.9% 5.6% 4.0%Asia Pacific 37.9% -22.3% 28.5% 22.8% 41.3% 16.5% 12.7% 6.0% 0.4% -3.5% 33.7% 6.1% 4.4%Europe - Euro base 53.6% -26.9% -12.7% -2.9% 11.1% -0.4% 0.6% -5.8% -13.2% n/a n/a n/a n/aJapan - Yen base 35.7% -20.4% -5.3% 18.3% 10.0% -2.0% 11.3% 6.4% -12.6% -28.8% 13.5% 5.6% 4.0%
Exchange rate 1999CY 2000CY 2001CY 2002CY 2003CY 2004CY 2005CY 2006CY 2007CY 2008CY 2009CY 2010CY 2011CY 2012CYEuro - US$ 0.940 1.088 1.114 1.058 0.884 0.804 0.804 0.796 0.730 0.679 n/a n/a n/a n/aJapanese Yen - US$ 113.2 107.9 121.2 124.8 115.6 108.3 110.1 116.4 117.7 103.6 93.4 90.7 90.7 90.7
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Semiconductor Import amount by China & Hong Kong with growth rate Growth rate (line)
China Hong Kong
Source : SRL
China’s import amount share of Japan, Korea, and Taiwan
Taiwan
KoreaJapan
Emerging Greater China
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Japanese semiconductor manufacturers lose market share
SRL’s research references:manufacturers statistics by METI,
Trading statistics by MOF, and WSTS
Domestic semiconductor manufacturing in Japan
Am
ount (Billion Yen)
QTY (billion pcs)
QTY
Amount
WW share of Japanese semiconductor companies
Domestic Only
including Overseas fab
Japan’s export amount of half finished semiconductor
Billion Yen
AnalogLogicMicrocontrollerMemoryOptoelectronicsDiscrete
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Distribution market overview
海外半導体メーカー
海外半導体メーカー
国内半導体メーカー
国内半導体メーカー
海外メーカーの日本現法海外メーカーの日本現法
海外国内メーカーの海外現法国内メーカーの海外現法
半導体商社半導体商社
Direct Sales
Thru Distributors
大手半導体商社経由大手半導体商社経由
中小半導体商社経由中小半導体商社経由
海外半導体メーカー
Non-JPNSemi MFR
国内半導体メーカー
JPNSemi MFR
海外メーカーの日本現法
Non-JPN Semi local sales office
海外Overseas OEMs/EMSs
JPNsOEMs/ EMSs
(domestic)
国内メーカーの海外現法
MFR’s sales office
半導体商社Distributors
Internal Use
Thru Distributors
Direct Sales
Export
大手半導体商社経由1st tier Franchised Distributors
中小半導体商社経由
JPNsOEMs/EMSs
(overseas)
Import
Import2nd/3rd tier Distributors
Design-in in JapanDelivery to overseas
Japanese OEMs/EMSs manufacturingCapacity transfer to overseas
Japanese Market
Direct SalesOverseas Market
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Distribution Market Trend
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Global distributor ranking
Source : EE Times
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Japanese distributors ranking
2009Rank
Company FY09 (10/3) revenue ($mil)
% Japanbusiness
Major lines
78.0%
53.4%
79.8%
73.1%
63.1%
88.0%
72.7%
75.6%
75.1%
69.5%
1 KAGA ELECTRONICS CO.,LTD. 2,816 Renesas, Toshiba
2 UKC Holdings Corporation
MARUBUN CORPORATION
Ryosan Company, Limited
SANSHIN ELECTRONICS CO., LTD.
Ryoden Trading Company, Limited
MACNICA, Inc.
TOMEN DEVICES CORPORATION
Shinko Shoji Co .,Ltd.
TOMEN ELECTRONICS CORPORATION
2,531 Sony
3 2,446 TI, Maxim, Onsemi
4 2,287 Renesas (NEC)
5 2,099 Renesas (NEC)
6 1,983 Renesas, Mitsubishi
7 1,756 Altera, Broadcom
8 1,634 Samsung
9 1,544 Renesas (NEC), TI
10 1,515 STM, NXP, Infineon
(*)
US$1=85JPY, (*)UKC Holdings are consolidated assumption of USC and Kyoshin Tecnosonic
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History of electronics market and distributors
1970s 1980s 1990s 2000s -
Declining market shareMove to focus on SoCDRAM Leader
US DominantTo be specialized
(TI : DSP, Intel : MPU)
Intel’s top rankingSpecialized / Fab-less ventures
Taiwanese FoundrySamsung’s speedy growthChinese players enter
US/Europe
Asia
Japan
Home Appliance /Audio Visual booming
HA/AV declining PC growth
Telecom,Cell Phone growthEMS consolidation
Global EMS growthDesign oriented companiesFab-less OEMs like Apple
PC/Cell Phone growth Digital HA, AutomotiveMore move for mass productionFab transition by Stronger Yen
JPNs factoriesby stronger yen
Chinese EMSs/OEMsBecoming global factory
Taiwan ODMs/EMSsKorean OEMs
Mega distributorsappears by M&A
More consolidations for mega distributors
Catalog Distributors growth
JPNs semi disti growth Semi importer growth
Direct sales and distributionmarket established
Logistic SupportMainly
JPNs, US/Europe, localdistributors aggressive activity
Distrib
utors
Distrib
utors
OEMs/
OEMs/EMSs
EMSs
Sem
i Sem
i MFRs
MFRs
US/Europe
Asia
Japan
US/Europe
Asia
Japan ?????
???
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Functions of distributors
Sales & Marketing supportￚ Demand Creationￚ FAE & Technical Supportￚ Maintaining accounts / customer relationships
Inventory & Logistics supportￚ Management of inventoryￚ Management of global logisticsￚ VMI
Financial supportￚ Creditￚ Money collectionￚ Payment term adjustment
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Example of Japanese distributors
Renesas Technologies and NEC Electronics merged as Renesas Electronics in April 2010
Renesas plans to cut existing franchise distributors in half
ￚ Worldwide : 96 >>> 49
ￚ Japan : 30 >>> 16
NEC Electronics historically use franchised distributors for 99+% of outside sales revenue
Renesas Technologies historically has two channels of distributions for Mitsubishi-Keiretsu and Hitachi-Keiretsu, both who have multiple distributors
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Trend of small lot distribution market in Japan
Japanese semiconductors /electronic parts total consuming market size Approx. 5 - 60 billion USD
※Market size is estimated by Chip One Stop, Inc.
Total market continues grow
Total small lot procurement market size Approx.4 - 5 billion USD
- historically supported by old-fashioned small distributors/shops
Small lot purchase and quick delivery needs grows continuously
Approx. 120 million USDCurrent Small Lot
Internet Distribution Market
It was Zero in 2000CY
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Costco vs Seven Eleven
1. Customer visits,2. Project design-ins,3. Project forecast,4. Backlog planning,5. Stocking based on established run-rate...
Typical volume distributors' approach Catalog/Internet distributor model focuses on Marketing & Availability
1. Stock-up, product available
2. Marketing and branding
3. Field Activities ...
- Buy in bulk big boxes - Buy in small units (one pcs.)
- Specialize in some products, very deep quantity coverage
- Very convenient location, usually around the corner
- Inconvenient locations - Will buy when the need and urge is there
- Will travel long time to get there - Price will be more expensive than Costco, but the need to buy is critical
- Buy only usually on weekends
- Will be cheaper than 7-11
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Introductions to Chip One Stop
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Vision & Mission
“New Distribution Systemsfor semiconductors and electronic parts"
The best catalogue/online basedThe best catalogue/online basedhighhigh--service distributor in Japanservice distributor in Japan
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Chip One Stop, Inc. (as of Oct 1, 2010)Establishment February 9, 2001Capital 1,004million yenEmployees 118HQ Location Shin-Yokohama, Yokohama, JapanOther Locations Kansai (Osaka), Logistics Center (Yokohama)Subsidiaries J-Chip Corporation (Yokohama)Stock Listing Tokyo Stock Exchange (Mothers Market: Code 3343) Sales revenue US$47 mil (2010/12 projected)Major Shareholders
Zuken, Inc. (TSE-1, EDA/PLM System Vendor)Mark KojoTreasury stockOmron Co., Ltd. (TSE-1, Electronic Components Manufacturer)Tetsuya UmekiKaga Electronics Co., Ltd. (TSE-1, Franchised Distributor)Marubun Corporation (TSE-1, Franchised Distributor)Midoriya Electronic Co., Ltd. (Franchised Distributor)ADM, Inc. (JASDAQ, Franchised Distributor)Macnica , Inc. (TSE-1, Franchised Distributor)Internix Incorporated. (TSE-1, Franchised Distributor)
Yokohama HQ
Kansai Office
AMSC Co., Ltd. (JASDAQ, Franchised Distributor)
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www.chip1stop.com - web site top page
Service Category Tab P/N, Keywords, Web-order Code Search
Category Search Manufacturer Search
Guidance ForCustomer
Solution Search ( including C1S original service such as PCB manufacture ring, custom wire harness and etc. )
FAQ, CustomerSupport
What’s NewNews Center Ranking
My page and history page
Recommended products
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Advantages provided by Chip One Stop
- Strong search engine and transaction friendly portal with 7 MIL+ P/N database- Rich contents for sourcing decision making- 99+ % online orders- INTRANET solutions to large OEMs/EMSs- Fine web tuning focus on Japanese market
Web & Systems
Line cards
- Wide range of line cards with sub-MOQ for design engineering / prototype- Stock availability (total 700,000+ line items) / Next day delivery by 5pm order for all Japan- Strategic integration with suppliers web site and latest products introduction
- 97,000+ web members with one to one marketing capability- Large circulation of printed catalog / electronic catalog
- Flexibility of payment conditions including “SHIMEBARAI” payment- Formal contract registration with end customers
as authorized preferred supplier “KOUZA TORIHIKI”- Face to face support for customers by field sales activities “EIGYO”
Localization
Promotion
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Number of registered web members
The number of registered web members continues to grow on a daily basis
97,000+ registered web users from 33,200+ companies as of September 2010Registered Web Members Members Profile
Total = 97,000+ from 33,200 companies(as of Sep 30, 2010)
* As of Sep 30, 2010
Purchasing
Sales & FAE
Others
Production,Manufacturing&QC
Management
Student
Personnel&Administration
Electronic circuit/PCB/Semicondesign
R&D
Others
Sales &FAE
EndUsers
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Increasing orders and customers
Number of orders and shipping customers continues to increase
Number of orders
0
4,000
8,000
12,000
16,000
20,000
24,000
28,000
32,000
20032004200520062007200820092010
Projection
CAGR=52.15％（2003-2009）
Number of shipping customers* Unique number of members on annual basis
0
40,000
80,000
120,000
160,000
200,000
240,000
280,000
320,000
360,000
400,000
20032004200520062007200820092010
Projection
CAGR=54.74％（2003-2009）
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Segmentation of customers
PrototypeR & D Pilot Production Repair & Maintenance
Small lot / High margin
Volume of ComponentsLarge lot / Low margin
Design & Prototype (NPI) Small scale production EOL
• After market solutionGuaranteed qualityTraceabilityReproduction
• Customer support
• Introduction of replacements
• Field sales/BOM management
• Industrial sector approach based on users’ applications
• Customer support
• Preferred vendor registration
• PromotionWeb, Catalog, E-mail news letters
• NPI / Design-in• Technical marketing• Intranet solutions for large OEMs• Coop Univ. shop distribution
Large scale production
Supplier direct sales
1st tier Distribution
Positions in product life cycle
EducationSpeed to market Cost of Inventory / Availability Cost of down time /
Qualified SourceCustomer’s
priority
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Strategic online approach
Tier3
Distributors
Tier4
Tier5
Distributors
Existing Channel Low-touch Approach
Tier1
Tier2
Design-in by “Virtual FAE over the web”
Mass Market
Intranet Solutionfor design / prototype phase
EOL purchase support
Univ. shop site
Number of companiesManufacturers Manufacturers
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Customers with strong promotional channels
Customers Catalogues
EngineersBuyers
Registered Web members:
Approx. 97,000+ persons*（Approx. 33,200+ companies）*
98+ Universities163+ Locations *
Intranet Solutions
Catalogue Vol.5 issued in Aug. 2009 with 1,000+ pages
50,000+ copies are mailed to selected web members, potential customers, etc.
* As of Sep 30, 2010
7,000,000+ part numbers database700,000+ ready to ship stock availableParametric attribute data, datasheet,
PB-free, RoHS info etc.
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Products coverage - Major line cards and suppliers
SuppliersProduct Coverage•Semiconductors •Opt-electronics•Passives and Electro Mechanical•Interconnect•Wire / Cable•Industrial Control / Electrical
•Custom PCB and Mounting Service•Tools•Custom PCB and Mounting Service•Test / Measurement•EMC / Thermal Management•Production Supplies / Books & Reports
Authorized Link as Web Shop
Supplier Partnering Official Web shopTransferring manufactures' direct sales web sites
700+ suppliers- Parts manufacturers- Domestic Franchised Distributors- Overseas Distributors
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Strategic web linkage with suppliers : example
Buy Online
Official Shop
Chip One Stop Web SiteAnalog Devices Web Site
Product details page
Official shop page
Product details page
Top page
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Chip One Stop - Corporate history
2010 WinterInternational
service site to be launched (English and
Chinese)
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Contact Us
Corporate Planning, Finance and Admin. Dept.Email ：[email protected] ：+81-45-470-8750FAX ：+81-45-470-9015
