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Internix
was founded in September 1970 as the exclusive distributor
or stocking rep in Japan for a small American ICs & semiconductor
devices manufacturer. Subsequently, we have added
many franchises for electronic
product manufacturers, especially American ICs & semiconductor
devices manufacturers, and we are now one of the
leading foreign semiconductor distributors in Japan.
We made IPO in JASDAC in August
2000, became listed in Section 2 of Tokyo Security
Exchange in March 2003, and have been listed in Section
1 since September 2004. We
have 7 sales offices, or locations, in Japan, 2 in
China and 1 in Singapore.
Our biggest strength is the strong technical capabilities we have. More than
one half of our 262 employees have engineering degrees, and they support our
customers in various ways. Many devices we carry get designed in, which leads to increased sales
of certain ICs and components later on. We also have an outstanding quality assurance
group and they handle returns we receive from our customers. Historically, about
one half of the cases when customers return devices to us, claiming as "rejects",
turn out to be actually good units; customers are not using them properly. In
such cases, we carefully tell our customers so as not to hurt their ego and send
back the units to them. In some cases, our engineers even show such customers
the proper ways to use certain devices. Both our principals and customers highly
value our such capabilities.
Internix has been heavily involved in various marketing activities such as
market research/analysis, advertising, and publishing & mailing our own newsletters
etc. on behalf of our principals. Consequently, we developed expertise in such
marketing activities. These capabilities, coupled with our technical capabilities,
can be a very strong and positive tool to obtain franchises for attractive start
up lines.
Sales of mixed-signal ICs account for over 80% of our semiconductor sales or about 70% of our total revenue, and mixed-signal ICs are far more difficult to sell than most digital ICs, because it is more difficult for customers to use them properly and thus far bigger technical support is required. So the mixed-signal IC market is not as competitive as digital IC business and therefore has higher margins. Mixed-signal IC market has been growing somewhat faster than over-all IC and semiconductor market in the last decade. We believe this trend will continue in the future, and we are thus better positioned to grow faster than most competitors.
In many ways, we have been trying to minimize the risk by diversification and
aim for a well balanced company. One example is the size of our line card. We
have some 30 foreign semiconductor lines, and to our knowledge, this is the largest
in Japan. In addition, we have half a dozen of Japanese semiconductor lines.
Because of this broad line card, sales of our largest supplier accounts for only
about 25% of our total revenue.
Another example of balanced management or diversification is our broad customer list. We sell to more than 1,000 customers, virtually all the electronic OEMs which have large enough TAMs and whose receivables are solid.
To summarize, INTERNIX is a highly technical distributor with particular strength in mixed-signal ICs made by foreign semiconductor manufacturers, and characterized by higher profit margins & faster growth than its competitors.
Beginning to be recognized by the stock market, INTERNIX stock price has started going up but its PER is still lower than its competitors. That means there still is a big room for our stock price to go up in the future. |
| April, 2010 |
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| Chairman, Internix, Inc |
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