SAN FRANCISCO -- 2005 was a year for consolidation among distributors, and market conditions will drive further merger activity in 2006, an analyst said today.

In 2005, Avnet bought Memec, Arrow acquired Ultra Source, World Peace teamed with SAC and RichPower. Also, Yosun acquired two smaller Asia-based distributors for Texas Instruments.

"Look for more of the same in 2006," wrote Carter Shoop, an analyst at Deutsche Bank, in a research note issued today.

Shoop said that lack of growth in North America and Europe, "coupled with incentives from suppliers to develop a more comprehensive Asian footprint and pressure from customers to offer a broader line card, are driving consolidation in the fragmented Asian distribution market."

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