In early 2018, the LED industry experienced a wave of instability. As companies planned their strategies for the year, electronic components like resistors and capacitors were among the first to trigger price hikes, setting off a chain reaction in the LED sector.
Resistors play a key role in circuits by dividing voltage in series or acting as shunts in parallel configurations, while electrolytic capacitors are widely used in power supplies for filtering, decoupling, signal coupling, and timing functions. These components are essential for LED power supplies. Yang Dong, General Manager of Zhangfei Power, explained that although resistors make up only about 3% of the total cost, capacitors account for around 10% of material expenses. This year’s price increase on capacitors has exceeded 100%, directly reducing the gross profit margin by 10%, creating significant pressure on manufacturers.
Chip resistor manufacturers began raising prices one after another. On December 26, 2017, a leading resistor manufacturer announced a suspension of orders for its thick film resistor products, signaling an industry shift toward more rational production levels. Soon after, several major chip resistor producers, including Wang Quan, Guojuzi Guoyi, Guangyi Technology, and Lizhi Electronics, adjusted their pricing. For instance, Wang Quan increased prices for certain chip resistor series by 15% due to rising raw material and packaging costs. Similarly, Guangsheng Technology raised prices by 10% for specific resistor models, and Lizhi Electronics also announced a 15% increase in resistance product prices.
Guoyi Company followed suit, announcing a 15–20% price hike on various resistor sizes, affecting nearly 45% of its total resistor sales. The reasons behind these increases include rising ceramic substrate costs, driven by high demand from the automotive industry and limited supply. Additionally, environmental regulations led to factory shutdowns and production restrictions, further tightening supply chains.
Aluminum electrolytic capacitors also saw price increases. Nichicon announced a 5% price rise for most of its aluminum electrolytic capacitor models, effective February 1, 2018. According to a representative from Yongming Capacitor, many manufacturers had already started quietly increasing prices by around 15%, mainly due to strict environmental controls and reduced availability of raw materials.
The rising costs of components like resistors and capacitors have significantly impacted power supply companies, especially smaller ones. With fierce market competition, power supply manufacturers were already operating with thin profit margins. Li Chengwei, Director of Kegu Power Marketing, noted that small and medium-sized power supply companies could not absorb the cost pressures from component price hikes. Ke Jianjun, General Manager of Shenzhen Bilda Technology, added that while the cost of resistors and capacitors was relatively low in their products, the price increases still put pressure on their margins.
However, not all companies were affected equally. Shenzhen Dark Energy Power managed to avoid the impact by signing long-term procurement contracts with suppliers, ensuring stable pricing and quality. As raw material and labor costs continue to rise, some smaller power companies struggle to survive. In the highly competitive LED lighting industry, the ongoing price hikes for resistors and capacitors pose even greater challenges for power supply manufacturers.
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