2021 and 2022: Digi-Key’s Year in Review and Outlook

2021 is a special year for the electronic components industry, in which suppliers, distributors and customers have encountered many unprecedented challenges. However, it is these challenges that bring new opportunities and innovative ways of thinking, which will ultimately drive the industry forward.

Several key Digi-Key leaders shared their thoughts on what happened in the past year, the lessons learned, and their outlook for the coming year.

Dave Doherty, President

The biggest lesson we've learned from the past year is that markets can be more unpredictable than anyone imagined. 

Even in these unpredictable market conditions, Digi-Key has weathered the storm. We have continued to invest in strategic initiatives, expanding warehouse capacity while localizing the customer experience in the areas of digitalization and support, upgrading our website and web services, and expanding into new markets, continuing to provide the best purchasing experience for our global customers.

The largest capital investment Digi-Key has made in recent years has been in warehouse infrastructure. Our new Product Distribution Center Expansion (PDCe) project in Thief River Falls, Minnesota, will nearly quadruple our current warehouse space. At 2.2 million square feet (200,000 square meters), the project will enable us to ship three times the number of packages from a single location than we currently can.

This will continue to strengthen our existing service model because it is the best service method to solve customer needs in one stop by aggregating global demand with the widest spot supply. From the continuous feedback provided by customers to us, they hope that someone can solve their major material needs in one stop and can deliver to anywhere in the world. Even if the customer's supply chain changes, when they need to switch from new product trial production to formal production line, we can quickly deliver the goods to different manufacturing locations, even when they move to other countries for their own strategic reasons.

While I don’t have a crystal ball to predict the future, I think the impact of the past few years for Digi-Key and the industry as a whole is that our confidence and trust in each other have increased, and our ability to respond to crises has improved—ultimately benefiting our customers.

Jim Ricciardelli, Executive Vice President, Digital Business Unit

At Digi-Key, we truly believe in digital-first principles, and this has served us well in 2021. 

Over the past 12 months, and into 2022, we have continued to invest in various “behind the scenes” infrastructure, including our site search capabilities, to improve our service capabilities. We recently made a major change to our search engine, and although we have not received any feedback from customers yet, this may be the biggest feedback we have received, as users have not noticed any changes or issues with the new system. Our previous search engine was designed to search millions of components, but as we have grown, we have continued to expand and extend this capability - today we offer more than 12.6 million parts worldwide, so we needed to build some new infrastructure to enable the service to scale far beyond this number. 

Digi-Key is continually developing new ways to make digital interactions easier for our customers, including removing barriers to global customer experience by providing localized support and experiences in local languages, currencies, business hours, and fast shipping in markets around the world. 

For many US companies, it is attractive to do business in one language and one currency. But as a global company, Digi-Key is committed to providing a seamless experience for our customers around the world. Today, we support 26 local currencies and do business in 21 local languages ​​– and this will continue to grow as our business grows. 

David Stein, Vice President, Global Supplier Management

The electronic components industry has encountered just about every possible challenge in 2021: reduced production due to the coronavirus pandemic, longer shipping times due to port delays, natural disasters, difficulty obtaining raw materials, or a combination of these factors, all during a time when customer demand for parts has never been higher.

We all know that this year has been difficult for many customers, with some high-demand parts being difficult to obtain, which in some cases has led to an increase in order volumes. I believe that while there may be some challenges ahead, orders will begin to return to more realistic levels in 2022 as customers find more breathing room. 

Today, Digi-Key offers more than 12.6 million parts from more than 2,000 different suppliers, and we have added 500 new suppliers and 1.1 million new parts since January 2021. In addition to our core inventory, we offer 1.1 million parts from 847 suppliers through the Digi-Key Marketplace, expanding our product offerings that we do not currently offer under our current model. 

All of us at Digi-Key are proud to work with suppliers who truly understand the importance of their products to engineers and makers around the world who innovate every day. Throughout my years in the industry, I have seen suppliers continually go above and beyond to find new and creative ways to increase their supply capabilities. 

With this in mind, I am hopeful that supply will increase as a result in 2022 and am confident that our partners will do everything they can to ensure they can meet demand.

The industry has learned many lessons over the past year and it is clear that this industry is cyclical. What we have experienced this year, we will experience again to some extent next year, but we believe that we will be better prepared with these stepping stones. Digi-Key expects innovation to continue in 2022 and is sincerely happy to play a small role in making these global innovations come true. 

Digi-Key Electronics offers more than 12.6 million components from more than 2,000 quality brand manufacturers and is both a leader and a continuous innovator in the global distribution of electronic components and automation products with high technical services.