Microchip withdrawing FAEs from distributers - bad decision???

Pete Fenelon Wrote:

>
> One of the few reasons for choosing Microchip used to be their excellent
> FAE support.  It's a curious decision.
>

As some post have already mentioned and I have been told by my Microchip 
FAE, support is only being taken away from the disti's. Microchip will now 
provide all support as they feel they can do it better this way. From some 
of the replys here it looks like they might be correct.

My concern was that if the disti's stop pushing microchip for new projects 
in favor of others, then Microchip will inevitably loose out. Maybie it'll 
all pan out. Could be that I'm used to the disti approach and am blind to 
this way.

Didn't Microchip do this before with Arizona microchip (withdraw from 
distis), and then go back ??? Bit fuzzy about what happened back then but 
something similar happened I think?
jim

>Moving to a direct-supply route, bypassing distribution offers the potential opportunity for
>significant price cuts, and the bottom line for most low-end microcontroller design-in decisions is
>usually price and availability. Microchip have always been the clear leader in the latter, and
>perhaps this is a strategy to be more price-competitive against recent low-cost devices from others.

I would second that, buy direct from Microchip IS very good for the
customers who always can check stock level and availability without
phoning distributors.It's very useful when you have custom project
waiting to evaluate different microcontrollers for different volumes
etc.
One of the reasons to put PICs everywhere we can is that we can go and
check availability online, while our Atmel distributor don't keep any
AVR parts on stock and always quote 10-12 weeks delivery time even for
generic casual microcontrollers like ATMega16 or ATMega128. Go explain
to your customer to wait 3 months until you get your parts for his
design and then to wait for assembly.
Who would ever need such distributor (actually nothing but middle man)?
As far for the support we never counted that our Atmel distributor can
provide any and it's even not locally based (the Atmel distributor for
Bulgaria is Codico/Austria - never though something more stupid as
marketing decission from Atmel) as a result Microchip make few Million
USD per year here and AVRs are know as some exotic things, yeah we know
they are much better but nobody have seen them :)

>If I were starting a new semiconductor company, I'd bypass distributors, sell direct, offer really
>good support, and do regular seminar tours for the face-to-face contact that can be useful
>sometimes.

this is absolutely possible in internet age, distributors were
important before when the communications were not so developed, now
there are online ordering,  web forums, e-mail support (FAE may be
located anywhere)

Best regards
Tsvetan
---
PCB prototypes for $26 at http://run.to/pcb (http://www.olimex.com/pcb)
PCB any volume assembly (http://www.olimex.com/pcb/protoa.html)
Development boards for ARM, AVR, PIC, MAXQ2000 and MSP430
(http://www.olimex.com/dev)

Hello Rich,

> 
> Did they have any FAE's at distributors outside the US?
> 

No idea but usually distributors are pretty good in making the contact. 
I have only used the 8051 family in the past because of 2nd source concerns.


> certainly we just email Microchip directly, and have never had any
> problems with that - in fact, you get better late-night service than
> trying to go through a distie...
> 

Sometimes the best app support comes from newsgroups like this. It's 
give and take, somebody is always awake somewhere on the world. 
Unfortunately many groups are on Yahoo now and I find that interface to 
be a real pain.

Regards, Joerg

http://www.analogconsultants.com

Hello Jim,

> 
> Arrow UK.
> 
> 
Hmm. I can only talk about the situation here (western US) but when I 
needed support for a TI part and the questions were mostly about 
pricing, code protection and pre-flashing I was quite happy. Arrow was 
helpful and they pointed me to the right guy at TI when they couldn't 
answer a question. To me, whether the support person is an employee of 
the manufacturer or of the distributor doesn't make a difference as long 
as they all work together efficiently. Arrow and TI do that quite well, 
IMHO.

Anyhow, with tricky technical questions I always contact the mfg first 
no matter what. When they don't have any app engineers (seriously, that 
has happened...) I look for another part.

Regards, Joerg

http://www.analogconsultants.com

As long as Microchip increases their visibility it is probably an ok
move.

I have lost all hope for distributor's FAE's. Unless the question
can be found on a Quick reference guide the distributor FAE always
passes my question on to a direct Factory guy.

So as long as Microchip sends fliers and pushes their products on their
own... similar to Maxim.... They will do fine.

Eric

"Mike Harrison" <mike@whitewing.co.uk> wrote in message 
news:mqmv1252158bfl2i1cl4nc9oshcmg4odpp@4ax.com...
> On Tue, 21 Mar 2006 21:19:04 +1100, "Andrew M" <noone@home> wrote:
>
>>Most semiconductor manufacturers pay an additional sales margin in the form of a
>>rebate for distributors who provide tech support and other technical services.
>>
>>Microchip have effectively revoked this system with the intention of providing the
>>technical support and services themselves.
>>
>>My personal view is that it will provide a short term gain and heavy medium term 
>>loss
>>for Microchip's market share. What the stock price does over the same period is
>>anyone's guess....
>>
>>Jim, which distributor was that? Avnet?
>>
>>-Andrew M
>
> I'm not convinced this is a particularly bad move - web/email/phone is an entirely 
> viable means of
> support these days,  and as others have mentioned can be faster than other means, if 
> done properly
> (I the last Microchip newsletter I got they mentioned they were about to extend 
> their 24-hour phone
> support to weekends - how many distis do that..?)
> Moving to a direct-supply route, bypassing distribution offers the potential 
> opportunity for
> significant price cuts, and the bottom line for most low-end microcontroller 
> design-in decisions is
> usually price and availability. Microchip have always been the clear leader in the 
> latter, and
> perhaps this is a strategy to be more price-competitive against recent low-cost 
> devices from others.
> I don't buy a lot of PICs directly, but when I have bought the odd thousend chips, 
> Microchip's
> online store has been cheaper than the distributors I checked.
> I'm actually rather surprised that the whole distribution model has lasted this 
> long - the net has
> IMO made much of what they do obsolete.
> The only exception would be the broad-line guys like Farnell, Digikey etc. who are 
> useful when
> buying small quantities of a wide range of parts for development and low-volume 
> production, where
> range of stock and very fast delivery are more important than price.
>
> If I were starting a new semiconductor company, I'd bypass distributors, sell 
> direct, offer really
> good support, and do regular seminar tours for the face-to-face contact that can be 
> useful
> sometimes.


I respect your opinion, Mike,

In fact I am a distributor FAE. And a damn good one if I might say so. (although good 
ones are becoming scarce these days). The missing details in your statement are:

1) Sales.
Distributors are sales organisations that are often larger than the manufacturers they 
represent. They have buying power and if you play your cards right will save you 
money. You 5000pcs is chicken shit, pardon my vulgarity, to Microchip but the 
distributors business is not. Also, the (good) disty guys WILL sell you the 
right/best/cheapest part according to your requirements. They will beat suppliers 
against other suppliers to save money also (ethically questionable I know) Parts you 
might not be aware of yet. Parts they carry much stock of and are cheap. Parts that 
have been proven to wor in similar situations. Even taking risk out of a customer 
design adds value.

2) Supply chain
Distributors (apart from the technical services) are paid to manage the supply chain. 
For significant business they obtain and manage customer forecasts, inventory, 
leadtime, credit etc on behalf of the customer. Good distributors can manage all these 
better than either the end customer OR manufacturer.

However, systems are maturing and things are clearly changing in this respect. 
Microchips move is a ballsy one which could go either way for them, in their highly 
competitive market. One bad step and Freescale, Atmel, Renesas, Zilog, Philips will 
happily eat their mkt share

-AndrewM 

Andrew M wrote:
> "Mike Harrison" <mike@whitewing.co.uk> wrote in message 
> news:mqmv1252158bfl2i1cl4nc9oshcmg4odpp@4ax.com...
>> On Tue, 21 Mar 2006 21:19:04 +1100, "Andrew M" <noone@home> wrote:
>>
>>> Most semiconductor manufacturers pay an additional sales margin in the form of a
>>> rebate for distributors who provide tech support and other technical services.
>>>
>>> Microchip have effectively revoked this system with the intention of providing the
>>> technical support and services themselves.
>>>
>>> My personal view is that it will provide a short term gain and heavy medium term 
>>> loss
>>> for Microchip's market share. What the stock price does over the same period is
>>> anyone's guess....
>>>
>>> Jim, which distributor was that? Avnet?
>>>
>>> -Andrew M
>> I'm not convinced this is a particularly bad move - web/email/phone is an entirely 
>> viable means of
>> support these days,  and as others have mentioned can be faster than other means, if 
>> done properly
>> (I the last Microchip newsletter I got they mentioned they were about to extend 
>> their 24-hour phone
>> support to weekends - how many distis do that..?)
>> Moving to a direct-supply route, bypassing distribution offers the potential 
>> opportunity for
>> significant price cuts, and the bottom line for most low-end microcontroller 
>> design-in decisions is
>> usually price and availability. Microchip have always been the clear leader in the 
>> latter, and
>> perhaps this is a strategy to be more price-competitive against recent low-cost 
>> devices from others.
>> I don't buy a lot of PICs directly, but when I have bought the odd thousend chips, 
>> Microchip's
>> online store has been cheaper than the distributors I checked.
>> I'm actually rather surprised that the whole distribution model has lasted this 
>> long - the net has
>> IMO made much of what they do obsolete.
>> The only exception would be the broad-line guys like Farnell, Digikey etc. who are 
>> useful when
>> buying small quantities of a wide range of parts for development and low-volume 
>> production, where
>> range of stock and very fast delivery are more important than price.
>>
>> If I were starting a new semiconductor company, I'd bypass distributors, sell 
>> direct, offer really
>> good support, and do regular seminar tours for the face-to-face contact that can be 
>> useful
>> sometimes.
> 
> 
> I respect your opinion, Mike,
> 
> In fact I am a distributor FAE. And a damn good one if I might say so. (although good 
> ones are becoming scarce these days). The missing details in your statement are:
> 
> 1) Sales.
> Distributors are sales organisations that are often larger than the manufacturers they 
> represent. They have buying power and if you play your cards right will save you 
> money. You 5000pcs is chicken shit, pardon my vulgarity, to Microchip but the 
> distributors business is not. Also, the (good) disty guys WILL sell you the 
> right/best/cheapest part according to your requirements. They will beat suppliers 
> against other suppliers to save money also (ethically questionable I know) Parts you 
> might not be aware of yet. Parts they carry much stock of and are cheap. Parts that 
> have been proven to wor in similar situations. Even taking risk out of a customer 
> design adds value.
> 
> 2) Supply chain
> Distributors (apart from the technical services) are paid to manage the supply chain. 
> For significant business they obtain and manage customer forecasts, inventory, 
> leadtime, credit etc on behalf of the customer. Good distributors can manage all these 
> better than either the end customer OR manufacturer.
> 
> However, systems are maturing and things are clearly changing in this respect. 
> Microchips move is a ballsy one which could go either way for them, in their highly 
> competitive market. One bad step and Freescale, Atmel, Renesas, Zilog, Philips will 
> happily eat their mkt share
> 
> -AndrewM 
> 

I'd agree with this, and add a bit more.  I much prefer to work with 
distributors, and only go to manufacturer specific support when 
necessary (and that's often in direct cooperation with the distributor's 
FAE).  It's easier for development, and it's easier for purchasing for 
production.  Suppose I'm looking for memory chip to put in a new design. 
  Baring very special circumstances, I don't care if it is made by 
Samsung or IDT or anyone else.  Rather than trawling the web, trying to 
guess what manufacturers might make that sort of thing, I can ring a 
couple of our biggest distributors and get the information I need 
straight off, including information I'd never get from websites (such as 
future plans for products).  It's a little less clear-cut for 
microcontrollers, since I generally have a good idea of which chip I 
want for a particular design, but there is still a lot you can get from 
a distributor FAE that you can't expect from a manufacturer FAE.  In 
particular, a distributor FAE will cover a wide range of products - if 
you talk to an Arrow or EBV expert on DSPs, he'll give you a comparison 
of chips.  A TI FAE is not very likely to tell you when you'd be better 
off with a Blackfin.