Last month, TTI Electronics Asia Pte. Ltd. set up its newest sales office and stocking location in Taipei, to meet the growing demand of OEM and electronics manufacturing service (EMS) companies that are purchasing product in Taiwan. The company says it can ship product to customers' manufacturing locations in Taiwan or mainland China from the Taipei warehouse.

TTI is not the only distributor bound for Asia. Arrow and Avnet, for example, have had sales, stocking, design and programming centers in the region for years. But as a midtier distributor, TTI has been making strides in the region since forming its Asia business a couple of years ago. One of the biggest expansions occurred in December, when TTI created TTI Hong Kong Ltd., which houses both a sales office and a warehouse stocking location.

Why invest in Asia? Distributors believe they will be better able to support a larger customer base of design and manufacturing companies by providing a full gamut of services, including sales, logistics, purchasing and stocking. Plus, if a distributor supports EMS companies, it had best be positioned in the right place geographically as manufacturing production shifts into low-cost regions, particularly China.

According to a recent market research study from iSuppli Corp., all of the top EMS companies-Celestica, Flextronics, Hon Hai Precision, Sanmina and Solectron-have millions of square feet of manufacturing operations in Asia, and they're still expanding and constructing manufacturing and warehouse operations there. These EMS companies offer a wide variety of services that include design, production manufacturing, systems integration, enclosure design and manufacturing, backplane assembly and repair.

Of course, distributors must still think about the challenges they face in moving to China. Many don't feel they have to because of the type and size of customer they serve. Yet developing a strong distribution channel in Asia by those that support leading component, OEM and EMS companies will be one route to supporting the fast-growing telecom and wireless industries in China.