Avnet bets big on China's automotive electronics market

US-based global technology distributor and solutions provider Avnet has high expectations on China's fast-growing automotive electronics sector. Despite geopolitical uncertainty, the company sees expanding prospects in Advanced Driver Assistance Systems (ADAS) and emerging sectors like "flying cars" and robotics.

Avnet supplied Chinese automotive customers 5.5 billion component units last year. At a recent Avnet Automotive Ecosystem Summit, the business highlighted its strong market presence and technical expertise in China, with over 100 automotive-related products developed with Chinese partners through its Shanghai, Beijing and Shenzhen design centers.

"The automotive-related business has significantly contributed to Avnet China's revenue," said Grace Ding, China's director of Field Application Management. "In the field of electric vehicles and the automation wave like ADAS, China is already at the forefront of the world, creating unprecedented opportunities."

ADAS penetration

From January to May 2025, the penetration rate of ADAS in Chinese passenger vehicles reached 55 percent. According to consulting firm Gasgoo, domestic brands are outperforming joint ventures in intelligent technology deployment.

This trend and supply chain localization improvements indicate huge potential in chip, sensor, and AI applications. Gasgoo notes that ADAS adoption is low for models under 100,000 and 350,000 to 500,000 yuan.

With its long history in component distribution and system integration, Avnet sees changing customer needs. New domestic Chinese companies, including "new forces" and cross-border enterprises, have accelerated in-vehicle AI development, Ding said.

Avnet supports autonomous driving, intelligent cockpits, sensors, radar, and vision systems. It has embedded AI algorithms to improve performance and cost control to help customers compete in the fiercely competitive automotive market.

The China Association of Automobile Manufacturers reported 12.9 million new-energy vehicle sales in 2024, up 35.5 percent year-over-year. Production and sales have led the world for ten years.

Ding is also eying new growth markets in robotics and "flying cars," or eVTOL (Electric Vertical Takeoff and Landing) vehicles. These emerging sectors align perfectly with China's national strategy to develop its "low-altitude" economy.

Measures to mitigate tariff risks

As an international electronics component distributor, Avnet recognizes the potential challenges posed by tariff disputes. The company assists its customers in mitigating these challenges by diversifying product alternatives.

At the same time, some suppliers, including European and American firms, have established supply chains and factories in China.

In response to evolving market dynamics, certain Chinese clients are proactively relocating portions of their production facilities to other regions, particularly Southeast Asia.

Avnet is supporting this overseas expansion by leveraging its deep understanding of local policies and regulations, as well as its strong delivery capabilities to facilitate these new international operations.

This demonstrates Avnet's adaptability in navigating a complex global supply chain landscape, ensuring it remains a vital partner for its clients' worldwide growth ambitions, Ding said.