According to the report, more than 39 percent of semiconductor sales will be transacted via e-commerce in 2003, including electronic data interchange (EDI) and RosettaNet. That's up sharply from 6.2 percent in 2000. It translates to $104.6 billion in 2003, from a paltry $12.7 billion last year.

Steve Cullen, director and analyst for In-Stat's semiconductor services, said that e-commerce will ultimately enable multicompany integration of the entire supply chain, from product design to end-product services. Distributors may question the numbers, but there is no doubt they will need to pump up their e-commerce capabilities.

The buzz words for large electronics suppliers are "improving efficiencies" and "streamlining processes" in the supply chain. Pick up any trade publication and you'll see that e-commerce efforts have become a key part of business strategies. Indeed, distributors that I spoke with last week believe all commodity transactions will occur via e-commerce, although it won't happen over the next couple of years. One leading distributor noted that more than 90 percent of the dollars it spends on semiconductors is already done via automated online transactions. Most of those transactions are handled via traditional EDI, but they are moving toward EDI over the Internet and RosettaNet, and similar schemes. On the other side of the supply chain, more than 20 percent of that distributor's North American orders are transacted electronically.

What will engineers gain? Right now, engineers can buy parts online and reduce the time they typically spend leafing through hard-copy catalogs. Big deal. Companies have been touting these benefits for years. But eventually, the online infrastructure will help engineers faced with faster time-to-market demands to collaborate on product designs via the Internet.

Automating the supply chain undoubtedly makes sense. The question is, will small to midsize distributors have the resources to shore up their e-commerce efforts to meet the demands? Larger distributors already have scalable e-commerce platforms that can handle this kind of volume. But I don't see it happening at the midtier level, yet.