TOP4 chip distributors have changed again

01

“Double W” continues to grow

“Double A” decline slows down

First, let’s look at the "Double W" duo (WPG Holdings and WT Microelectronics). This quarter, both companies continued to see revenue growth.  

Surprisingly, WPG’s Q1 revenue growth outpaced WT’s this time, with its overall revenue scale also slightly ahead. It’s worth noting that WT had consistently outperformed WPG and the "Double A" duo in previous quarters last year and claimed the top spot in the TOP4 revenue rankings in 2024.  

Specifically, WPG’s Q1 revenue reached NT$248.83 billion (approximately $8.209 billion), up 7.4% quarter-over-quarter and 36.8% year-over-year, exceeding its high-end revenue forecast of NT$2.1 trillion and marking the second-highest quarterly revenue in its history. This growth was driven by the rapid development of generative AI, which boosted demand for electronic components in traditional and AI servers, power supplies, PCs, notebooks, and other sectors, as well as customers pulling in orders ahead of schedule.  

Following closely behind, WT’s Q1 revenue was approximately NT$247.4 billion (about $8.167 billion), up about 28% year-over-year, surpassing the high end of its earlier revenue forecast of NT$220-236 billion.  

In March, rumors circulated that WT had received notice from Analog Devices Inc. (ADI) to terminate its distribution rights. The notice indicated that the last delivery date for ADI products would be July 26, 2025, with ADI requiring WT to submit all purchase orders no later than late April.  

Subsequent reports from Taiwanese media suggested that since ADI’s contribution to WT’s revenue and profits was relatively limited, the impact on WT’s 2025 operations was expected to be manageable. WT’s management stated it would reallocate resources to support other analog IC suppliers and actively pursue new orders. Analysts generally believe that the synergies from its acquisition of Future Electronics could offset this impact.  

Meanwhile, the "Double A" duo (Arrow Electronics and Avnet) continued to report declining revenue in their latest quarters, though the pace of decline has slowed. Among them, Arrow’s year-over-year revenue decline narrowed significantly, securing the third spot in Q1 revenue rankings.  

Arrow’s Q1 sales fell 2% year-over-year (compared to a 7% decline in the previous quarter) but were flat on a constant-currency basis at $6.814 billion, exceeding the high end of its guidance range. Non-GAAP gross margin was 11.3%, down from 12.5% a year earlier. Global components sales outperformed expectations at $4.778 billion, down 8% year-over-year (or 7% on a constant-currency basis). Enterprise Computing Solutions (ECS) sales rose 18% year-over-year to $2.036 billion.  

For Q2 2025, Arrow expects sales between $6.7 billion and $7.3 billion.  

Ranking fourth, Avnet’s latest quarterly results (FY25Q3, ending March 29, 2025) showed a 6.0% year-over-year decline in sales (compared to an 8.7% drop in the previous quarter), with a 6.1% sequential decrease to $5.315 billion. Within this, Electronic Components (EC) sales were $4.948 billion, down 5.7% year-over-year, while Farnell (parent company of e络盟) sales fell 10.1% to approximately $367 million. Operating income margin was 2.7%, down from 3.4% a year earlier, with adjusted operating income margin at 2.9%, compared to 3.6% in the prior-year period.  

Avnet CEO Phil Gallagher stated, "We are pleased with our third-quarter performance, with both revenue and profits exceeding expectations. Our team continues to execute well in a highly dynamic geopolitical and market environment." For the next quarter (ending June 28, 2025), Avnet expects sales between $5.15 billion and $5.45 billion.

02

 Is the Chip Distribution Market Improving?

Judging from the financial performance of the TOP4 distributors, there are indeed signs of improvement in the overall market—whether in terms of sustained growth momentum, a slowdown in declining trends, or official statements. However, regional disparities persist globally, leading to continued divergence in performance between the "Double W" (WPG and WT) and the "Double A" (Arrow and Avnet).  

Arrow's Performance by Region  

Arrow reported year-over-year sales declines across all regions in Q1, though the rate of decline narrowed compared to the previous quarter.  

- Americas: Sales fell 2% YoY.  

- EMEA (Europe, Middle East, Africa): Sales still saw a double-digit decline, down 19% YoY (or 17% on a constant-currency basis).  

- Asia-Pacific:Sales dropped 4% YoY (or 3% on a constant-currency basis).  

Despite this, Arrow’s President and CEO Sean Kerins noted: "In our global components business, all three regions performed better than normal seasonal trends, particularly as we see continued improvement in the industrial market."

For Enterprise Computing Solutions (ECS), EMEA stood out with a 37% YoY sales increase in Q1, while the Americas remained flat. Kerins added: "Our consolidated revenue, segment revenue, and EPS all exceeded our guidance range. This outperformance was primarily driven by strong growth across all business lines in EMEA, healthy contributions from value-added products, and continued strength in our ECS business."

Avnet's Regional Performance

Avnet also saw improved sales trends across all regions in Q1.  

- Asia:Sales grew YoY for the third consecutive quarter.  

- Americas:Sales declined 9.2% YoY, an improvement from the previous quarter’s -13.8%.  

- EMEA: Sales fell 24.1% YoY, slightly better than the previous quarter’s -25.1%.  

"Double W" Benefit from Asia’s Recovery & AI-Driven Demand  

Both WPG and WT continue to benefit from Asia’s market recovery and AI-driven demand growth. During their earnings calls earlier this year, both companies noted improving global inventory adjustments, a gradual market recovery, and expressed optimism about AI-driven opportunities.  

- WT Microelectronics observed that inventory adjustments in Asia have largely concluded, with most companies returning to YoY growth in 2024. North America’s inventory correction is nearing completion, while Europe continues to improve, with expectations of stabilization within the next one or two quarters.  

WT emphasized its continued gains from the AI wave, with market consensus anticipating stronger demand in the second half of 2025 compared to the first half. The overall market is expected to recover gradually, with AI adoption driving growth in end products. Demand across various applications is also projected to increase this year.  

- WPG Holdings stated that as the semiconductor industry rebounded in 2024, its revenue also returned to growth, now roughly back to pre-pandemic levels. Q1 saw an unusual uptick in demand despite being a traditionally slow season, particularly in China, where new investments—especially in AI servers—are emerging. WPG expects AI-related demand to remain the key driver of semiconductor market growth this year.

In addition to the top 4 global chip distributors, in mainland China, the top 5 companies in the first quarter, including China Electronics Port (+49%), Shenzhen Huaqiang (+17%), Shannon Xinchuang (+243%), Liyuan Information (+21%), and Haoshanghao (+13.14%), all had varying degrees of year-on-year growth in revenue, and the latest orders were all in an upward stage.

Overall, although the global distribution market is still uneven, the Chinese chip distribution market is relatively prosperous, showing a more stable growth momentum.

The Asia-Pacific market, which WT Microelectronics and WPG focus on, has been the first to recover since the fourth quarter of 2023 and has continued to maintain its growth momentum; at the same time, Arrow and Avnet, which have global layouts, have also seen a significant narrowing of their decline in recent quarters. According to the latest data from SIA, global semiconductor sales reached US$167.7 billion in the first quarter of 2025, an increase of 18.8% year-on-year; although it fell slightly by 2.8% month-on-month, it has achieved double-digit year-on-year growth for 11 consecutive months.

From a regional perspective, sales in March this year increased year-on-year in the Americas (45.3%), Asia Pacific/all other regions (15.4%), China (7.6%) and Japan (5.8%), but decreased in Europe (-2.0%). The American market performed particularly strongly, with an increase of more than 45%, mainly due to factors such as increased demand for AI technology and expansion of data centers.

In the chip spot market, there has been an increase in orders since the end of last year, and there are signs that the market is improving. However, judging from the differentiated performance of major chip manufacturers in the first quarter, the bleak automobile market, and the industrial market that is still recovering, it will still take some time for the chip industry to truly recover.