Avnet is one of the world's largest distributors of electronic components, sitting between component manufacturers (semiconductors, passives, connectors, etc.) and the OEMs, EMS providers, and engineers who use those components to build electronic products. Avnet operates two segments: Electronic Components (EC), the dominant business, serves high- and medium-volume customers globally, with semiconductors making up roughly 82% of EC sales; and Farnell, a high-service e-commerce distributor serving engineers and smaller customers who need low volumes quickly, with a heavier concentration in EMEA. Beyond basic distribution, Avnet provides value-added services including design support via field application engineers, supply chain management, and embedded computing solutions under its Tria brand. Avnet's economics are built on the spread between what it pays manufacturers and what it charges customers — gross margins run 10-12% and operating margins are thin at 2-4%, making the business highly sensitive to volume, geographic mix, and product mix. IP&E components carry roughly 400 bps higher gross margins than semiconductors, so Avnet is pushing growth in IP&E, demand creation, and embedded computing. Avnet's capital allocation in the current downcycle has focused on share buybacks, debt reduction, and a dividend, with M&A described as selective and tuck-in focused.