DigiKey: industry in transition as AI, reshoring and supply stability reshape the market

“We’re in a transitional phase. The industry is moving from a reactive inventory management phase driven by the supply chain disruptions as a result of the pandemic era to a more balanced supply/demand equation,” Doherty tells Evertiq. “While overcapacity remains in certain segments, we’re seeing normalization in others.”

But the balance is precarious. Doherty warns in the interview that current dynamics could easily recreate the conditions that led to the shortages of recent years. Customers are burning down their inventory, forecasts remain cautious due to macroeconomic uncertainty, and suppliers are recalibrating production after a period of excess. If the tariff uncertainties subside and demand signals strengthen, suppliers may not be able to react quick enough to prevent another “scarcity mentality” that would throw the industry out of balance, he says.

Shifting customer expectations

As Doherty explains to Evertiq, the disruptions of recent years have fundamentally changed what customers expect from distributors.

“Customers today expect more than just availability — they want predictability, transparency and speed,” he says. He notes a clear move toward localized sourcing strategies and diversified supply chains to mitigate risk — though the open question remains whether customers will accept higher costs for that resilience.

Supply chain agility also requires supplier investment. “It was the early desire for customers initially searching for the absolute lowest purchase cost that led the industry to single-site processing that could leverage scale in the lowest cost region,” Doherty notes.

DigiKey has responded by expanding logistics capabilities and developing tools that give better visibility into inventory and lead times. Technical expectations are also evolving. “Customers continue to seek information and not just a storefront selling parts,” he tells Evertiq. Beyond traditional datasheets and images, the demand now includes country-of-origin details, tariff flags, carbon footprint and more.

Three forces shaping the next growth phase

Looking ahead, Doherty identifies three major forces that will define the next chapter of the electronics industry — insights he shared directly with Evertiq.

First is the rise of AI and automation across the value chain. “Historically, customers have accepted that high service equals high cost. Customers are willing to pay for value, but not for one’s inefficiencies,” he says.

Second is the geographic rebalancing of manufacturing. While Asia will remain dominant, North America and Europe are accelerating reshoring and nearshoring investments.

Third is the growing emphasis on sustainability and compliance. Customers demand traceability and ethical sourcing. DigiKey, Doherty notes, is positioning itself to lead in AI adoption, global logistics and ESG transparency.

How AI is reshaping DigiKey

“AI is already deeply integrated into DigiKey’s operations,” Doherty tells Evertiq.

“AI is helping us streamline quoting, optimize inventory and accelerate customer response times,” he says. For example, DigiKey now uses AI-driven tools to parse Excel attachments in emails, generating quotes faster and more accurately.

Predictive analytics are increasingly important for demand forecasting and reducing excess inventory — improvements that help DigiKey remain both lean and reliable.

What does AI support mean in practice?

“It’s all of the above,” Doherty explains to Evertiq. “AI support at DigiKey spans predictive systems that anticipate demand shifts to customer-facing tools that enhance the buying experience. We’re also exploring generative AI for internal request intake processes, where conversational agents help build detailed business cases and workflows by engaging with stakeholders across departments.”

AI changing how engineers work

AI is not only making distributors more efficient — it is reshaping how engineers and procurement teams interact with them.

“AI is transforming the distributor-customer relationship from transactional to collaborative,” Doherty states in the interview. Engineers use AI-powered design tools to simulate and validate components before purchase, while procurement teams rely on intelligent platforms to assess risk, compare alternatives and automate routine tasks.

DigiKey is preparing for this shift by developing more intuitive interfaces, including chatbots, smart search tools and embedded design support. “We are still in the early stages with hype exceeding reality,” Doherty tells Evertiq, “but with the pace of innovation occurring in this space, the ROI crossover is within sight.”

A market still searching for equilibrium

The electronics supply chain is no longer in emergency mode, but it has not settled into stability either. As Doherty outlines in his conversation with Evertiq, the next phase of industry development will be driven by AI adoption, regional manufacturing shifts and rising expectations for transparency.

The coming years will likely reward distributors who combine operational speed with resilience — and who invest early in the tools and infrastructure that will define the future customer experience.

As Doherty suggests, the winners of the next industry cycle will be those who anticipate disruption rather than react to it — and who build supply chains that can adapt as quickly as the technologies they support.