Q&A with Colin Strother

1. What new market trends are you seeing so far in 2025? 

Building resilient supply chains is crucial amid geopolitical tensions. Many of our largest customers prioritize diversification and localization of their production to mitigate risks and facilitate migration.

As we navigate these evolving trends, Rochester Electronics remains steadfast in supporting legacy technologies for long-lifecycle applications. This allows our customers to focus their valuable resources on innovation and new product introduction while we provide solutions for their more mature end-products.

2. How are geopolitical events, the rising costs of business, and the labor shortage impacting your organization? 

Political and trade tensions continue to impact the semiconductor landscape. Our sole focus remains driving customer success by meeting our customers where they are, whether in person, over the phone or online 24/7.

Our community and result-based culture fosters a high-performing, stable and inclusive workforce. We continue to add physical resources globally with office expansions in France, Poland and Mexico, significant growth in India, Vietnam and Taiwan, and continued investment in the U.S., including tremendous additions to our onshore manufacturing capabilities and fulfillment centers.

Added to this is our continued digital transformation, which drives efficiency and effectiveness as we continue our “Customer360” journey, offering real-time experiences to our customers worldwide.

3. What new ESG (environmental, social, and governance) initiatives or plans have you put in place? 

At Rochester Electronics, we have implemented several ESG initiatives to enhance our commitment to environmental sustainability, social responsibility and governance.

Regarding environmental initiatives, we are ISO-14001:2015 certified and continuously review our manufacturing inputs and outputs to ensure EPA compliance and protection of the environment. We prioritize waste reduction and have recycling programs to capture and recycle waste metals. Intensive chemical analysis is conducted within our manufacturing programs to optimize performance and minimize environmental impact. All hazardous materials generated are 100% designated as "Zero Waste to Landfill," meaning they are recycled, reclaimed or reused and never buried in a landfill.

On the social front, we are dedicated to promoting parity and equality in engineering and employment. We support WE United's mission to cultivate leadership rooted in civility, ethics and humanity within the technology sector.

Regarding governance, we ensure that our policies and actions benefit our workers and customers, fully complying with sustainable commitments and future goals. We foster strong relationships with local communities and encourage sustainable practices across all business sectors.

These initiatives reflect our ongoing commitment to positively impacting the environment, society and industry.

4. What other challenges are you working through and how are you overcoming them?

The semiconductor market is experiencing one of the most severe and prolonged downturns on record. This downturn was not accurately predicted, and forecasting an upturn remains challenging.

The industry is known for its cyclical nature. It has transitioned from growth to shrinkage nine times in the last 34 years, and the frequency of contractions has increased.

Despite this uncertainty, we remain in a growth industry. Market analysts suggest that the excess inventory affecting the market may start normalizing in the latter half of 2025. There is optimism that resolving geopolitical tensions will contribute to greater market stability. These factors, along with ongoing technological advancements and the increasing demand for semiconductors in various applications, underscore the industry's potential for long-term growth.

Although Rochester is traditionally recognized for its End-of-Life (EOL) products and solutions, we now offer around one-third of our 15 billion in-stock inventory as 100% authorized and guaranteed active products sourced directly from the Original Component Manufacturers. We are dedicated to meeting customers' immediate needs by developing efficient supply chain solutions while expanding and supporting the world's largest portfolio of in-stock inventory for immediate dispatch.

5. Where do the opportunities lie right now, and how is your company leveraging them? 

Rochester Electronics believes that digital transformation presents an enormous opportunity.

We offer a range of online and offline solutions and invest heavily in digital products, platforms and services, including Trusted AI. This ensures personalized service delivery to customers in real time and across global languages.

Despite the transitional challenges facing the automotive industry, semiconductor demand is rapidly increasing. Rochester Electronics is well-positioned to capitalize on this growth. With Automotive IATF 16949 certification and a robust inventory of AEC-Q100-qualified components, Rochester is poised to become a vital extended-life resource for the automotive supply chain.

The industrial market has consistently been a strong sector for Rochester due to the long lifecycle requirements of many products. The development of the Internet of Things (IoT) has brought the industry to an inflection point, necessitating the transition of current designs to newer technologies while maintaining support for existing designs based on older technologies. Rochester is collaborating with its semiconductor supplier partners to extend support for devices facing diminishing production volumes and potential obsolescence.

Additionally, we see significant growth opportunities in the defense and aerospace markets. Recent supply chain disruptions and a push for onshoring and local manufacturing align well with our strategy to effectively support these markets.

Rochester has provided onshore licensed manufacturing since the mid-1990s to ensure secure IP and safeguard critical components.

We provide comprehensive services to enable legacy systems to continue operating, including authorized distribution, licensed manufacturing, wafer storage, full device replication, assembly and advanced testing.

6. What do you see ahead for the rest of the year (any new trends, challenges, opportunities, etc.)?

In 2025, we will focus on products, customer engagement and customer experience. From a product perspective, we are offering our most extensive product range ever. Our in-stock inventory is at record levels and perfectly aligned with our business model. We have made substantial, thoughtful and cohesive investments in product families curated to meet the ongoing needs of our customers.

Our digital transformation, supported by Trusted AI and new physical resources in existing and new locations, enables us to engage with and serve our customers around the clock—in person and online. This allows us to provide real-time support globally and locally like never before.

Later this year, Rochester Electronics will introduce new manufacturing services to meet the rising demand for long-lifecycle solutions and address supply chain obsolescence challenges in mission-critical systems. We are enhancing domestic manufacturing for hermetic and plastic assembly packaging across the military, industrial, medical and automotive sectors. This includes supporting hermetic hybrid multichip packages, expanding plastic packaging with legacy lead-frame solutions for PLCC and QFP, and adding QFN and BGA leadless packages.

Rochester is expanding its capabilities for military applications requiring lead solder for lead-frame and ball grid array products. To meet these critical needs, we offer hot solder dip and re-balling services.

With these initiatives, Rochester Electronics is well-positioned to continue delivering exceptional value and support to our customers, ensuring their success in an ever-evolving industry.

7. What specific challenges are you facing due to the new tariffs? 

Tariffs can disrupt global supply chains by raising the cost and complexity of sourcing components from specific regions. This can lead to delays and increased logistical challenges, affecting the timely delivery of products. Although tariffs may promote domestic manufacturing and strengthen national security, they can also create significant challenges for the semiconductor industry, impacting costs, supply chains and market dynamics.

As a U.S.-based company with 100% authorized domestic distribution and licensed onshore manufacturing at our facilities in Newburyport, Massachusetts, we offer our customers enhanced security in sourcing for active and obsolete devices. All products are brought into our warehouse in the Portsmouth, NH Free Trade Zone (FTZ); those with no tariff implications are cross docked to our main fulfillment center. Based on country of origin (COO), the remaining are only imported to service domestic customer orders; international orders ship directly out of the FTZ and, therefore, are not affected. By providing reliable and timely solutions through our multiple distribution centers, Rochester Electronics ensures our customers can navigate these challenges confidently and safely, reinforcing our commitment to excellence in the semiconductor industry.