The mood at this year’s EDS Leadership Summit in Las Vegas was distinctly upbeat, reflecting a broader shift in the global electronics components market. Speaking with Paige Hookway, Mike Slater, Vice President of Global Business Development at DigiKey, outlined how the industry has moved from post-crisis recovery into a period of sustained stability and growth, powered in large part by semiconductors, AI, and data centre expansion.
Slater describes the current environment as “extremely positive”, noting that the market began to turn in the back half of 2025 and has maintained that momentum well into 2026. Five months into the year, he says, companies are no longer just hopeful – they’re seeing tangible results reflected in their numbers. That performance is underpinning a strong sense of confidence across the summit.
Yet, even in an upcycle, a degree of caution remains. Industry players who spent years navigating downturns and supply chain turbulence are now asking a different question: how long this favourable cycle will last. According to Slater, that uncertainty is less about current conditions and more about the natural hesitancy that follows a period of volatility.
Inventory normalisation and smarter buying
One of the defining challenges of recent years has been inventory and lead time disruption.
From DigiKey’s vantage point, the picture is largely encouraging. Slater says the market has stabilised on the inventory front, with no significant glut or lingering overhang across its business. DigiKey divides its operations into six major technology and business units, and he reports healthy growth across all of them. While isolated pockets of hard-to-get products remain, the broader market has, in his view, found its footing.
That stabilisation, however, has left a lasting mark on customer behaviour. When asked whether DigiKey is seeing more spot buying or longer-term agreements, Slater notes a clear shift: many customers have moved away from long-term commitments and towards spot buying and shorter-term planning.
This is not simply tactical; it is rooted in recent history. Having previously been caught with excess inventory during periods of extended lead times and uncertain supply, many procurement teams are now deliberately conservative in their forecasts. Instead of locking in far-ahead commitments, they are working in shorter purchasing cycles, aiming to match orders more closely to demand and avoid being “too overzealous” in their planning.
Semiconductors, AI and data centres lead the charge
When it comes to technology trends, Slater is unequivocal: while DigiKey is performing well across all its technology segments, the semiconductor market is growing the fastest, outpacing other categories by a clear margin.
A major force behind that surge is the continued build-out of AI infrastructure and data centres. These have been buzzwords for several years, but the level of ongoing investment remains “enormous,” Slater notes. Crucially, this is not limited to the chips themselves.
The expansion of AI and data centres is creating a ripple effect across the broader industrial ecosystem. Slater points to HVAC suppliers, who are seeing growing demand as large-scale compute installations require extensive cooling solutions. Similarly, vendors providing cable, wire, and connectors are benefitting from the dense networking and power infrastructure these facilities require. The impact is also being felt across the industrial segment, where AI-driven applications and connected systems are increasingly central to design and deployment.
On the DigiKey platform, these shifts are reflected less in a wholesale change in how engineers search, and more in growing specificity and urgency. Slater says engineers are still searching in broadly similar ways to the past, but they are now more precise in their requirements, keen to move quickly, and insistent on having multiple viable options. DigiKey’s strategy, he adds, is to remain deeply embedded in engineers’ workflows by offering a comprehensive, easy-to-use website that helps them solve design problems efficiently.
Global model, stable outlook and advice for 2027
DigiKey operates a distinct global model, bringing all inventory into Thief River Falls, Minnesota, and shipping worldwide from there. In this context, tariffs become a key concern for customers. Buyers are demanding clear, transparent information on tariff implications, and DigiKey’s role is to provide that visibility on its website so customers can decide how best to manage sourcing and cost challenges.
Looking ahead to the rest of 2026 and into 2027, Slater remains firmly optimistic. He expects a stable market, neither overheating nor contracting, with customers largely buying to actual demand rather than stockpiling. With a larger customer base than ever, DigiKey sees this environment as conducive to continued growth.
Slater’s advice to engineers and procurement teams reflects the lessons of recent years. He urges them to stay close to the market, make full use of online tools to de-risk designs, plan ahead where possible, and dual-source critical components to reduce vulnerability. On its side, DigiKey is committed to continuously expanding both the breadth and depth of its inventory, ensuring that when engineers come looking for solutions, the parts they need are on the shelf and ready to ship.
