As a general meeting place for electronics manufacturers and distributors, EDS will no doubt be filled with talk of excess inventory in the supply chain, weak demand in the electronics industry, and whether or not there will be a recovery by the third quarter. The jubilance at last year's show over the booming market will be replaced, I'm sure, by uncertainty over whether or not electronics distributors, electronics manufacturing service (EMS) companies and OEMs will pull off even minuscule growth in 2001. Many of the companies that were at EDS 2000, I've heard, will not be at this year's gathering.

I think the entire industry-distributors, EMS providers and OEMs alike-is still trying to figure out what went so terribly wrong in the fourth quarter of 2000 to cause such a sudden fall-off in bookings in the first quarter of this year. One passive-component manufacturer I spoke with recently puts it simply: OEMs overforecast demand; EMS companies ordered too much and inventories accumulated in the pipeline; and component manufacturers expanded too much. Coupled with a slowdown in the economy at the start of the year, including much slower-than-expected demand from the cell phone, networking and telecommunications sectors, you end up with current market conditions.

No one really knows when the next upswing in business will begin. Many suppliers hope to see signs of a recovery in the third quarter. Others think that if it doesn't happen then, it probably won't until 2002.

Meanwhile, the EDS keynote address will discuss how outsourced manufacturing changes market dynamics and impacts the electronics distribution industry. In fact, this may be a very interesting session considering that many large electronics suppliers partially blame EMS providers for their current woes in the supply channel. The truth is that in many cases EMS companies procure a huge percentage of their OEM customers' parts and thus have more responsibility to manage their customers' materials flow. Many industry players believe EMS providers don't have enough experience to be experts in inventory management. And the general consensus among distributors is that they still do it better than EMS companies do.