Inside the Trade Secrets: The Brilliant Strategies Brokers Employ to Obtain Semiconductors

In recent years, the open market for #semiconductors became a multi-billion dollar industry, Last year revenue of just the top 10 Brokers was way more than 10 Billion USD. Two Broker #smith & Shenzhen Huaqiang aka #MogulTech revenues were 4.8 Billion USD & 3.5 Billion USD respectively (See this link to know the exact figures of the top 50 Distributors & Brokers https://mp.weixin.qq.com/s/d2cIQGTbEwzoZN7P38nKvQ )

But the real question is how brokers get their semiconductors or more accurately; why semiconductors end up in the open market in the first place.

There are many ways for semiconductors to end up in the open market, and I will discuss just a few of them.

1. Some Big #OEM factories buy more stock than they can consume so they sell the excess stock in the open market at much higher prices. Will not mention the names but some very big EMS companies have totally separate departments to perform this job.
2. Some Authorized dealers sell their stock directly in the open market to earn more profit. (I am not talking about big or renowned distributors)
3. Excess inventory of different clients, after project completion, is also one of the sources

These three are some of the ways, there are many other ways too, which we will discuss some other time.

Some people also wondered, is this an ethical or even a legal business?

Yes, of course, it's perfectly legal and ethical because #brokers are a necessary part of this whole #supplychain . Without brokers, you can not reach out to some necessary and discontinued components or liquidate your excess stock, or get your hands on the ICs which you can not directly purchase from the manufacturers because of small quantities.

But there are always bad eggs, the ones who hoard the stock to just increase the prices or those who do not want to supply semiconductors directly to clients & instead sell to the open market for more profits.

I am not sure about other country's rules and regulations but here in #china , it's punishable by law if you are found hoarding the stock or trying to manipulate the prices.

Let me know in the comments if you know some other special ways to get the semiconductors.