In 2018, the prices of components such as resistors and capacitors continue to rise. On March 2, MLCC Dachang Murata issued a notice to reduce the production capacity to 50% of the “old product group†that already has miniaturized alternatives, and will continue to reduce its production capacity in the future. It is reported that, due to continuous Blizzard in Japan's Honshu Island, Murata multi-site factory shutdown, it is now announced that some products reduce production by 50% and part of the price increase, coupled with Kyocera's suspension of production, MLCC market may usher in more serious stock price surges , relevant MLCC manufacturers will continue to enjoy the stock price rise bonus.
We see that after entering 2018, the price increase has expanded from the MLCC to the content of passive devices such as capacitors and inductors and continues to spread. Some product price adjustments saw 30%. Taking Korean Samsung as an example, it took the lead in launching a new round of price increases. We have determined that the new capacity of passive components still cannot meet the market demand, and the market price will remain tight. The price increase is expected to continue into Q2 this year.
On the whole, MLCCs have been out of stock for a long time. This MLCC's stock price hike has lasted at least 15 months. The original MLCC plant also started its expansion plan last year. However, since the layering and sintering in the manufacturing process are the bottleneck stages of production expansion, the delivery date of the relevant machine equipment will be more than 10 months. The new production capacity will be released until 2018. 4 seasons.
Since 2017, MLCC prices have skyrocketed. Earlier, Fenghua Hi-Tech and other major MLCC manufacturers have repeatedly raised prices for their products.
In addition, the national giant has twice escalated the chip resistance price this year; Wuxi Taiming Electronics also announced that the price of thick film resistors has been adjusted, and some of the packaged chip resistors have increased by 15% on the basis of the previous price. Market research firm Paumanok predicts that global demand for passive component terminals will reach US$28.6 billion in 2020.
The research report shows that from October 1, 2017, the price of all models of MLCC (ceramic capacitors) increased by 10% to 110%. After entering 2018, the prices of general-purpose products such as 0201/0402 have increased by two to four times. In terms of production capacity, the total capacity of global MLCC in 2017 was approximately 411.25 billion, and the demand reached 420 billion, and in 2018 it was even higher at 440 billion.
At present, orders from many manufacturers have already reached the stage after September 2018, so prices will be high. Since the release of production capacity after expansion will take some time, the balance between production and sales will also be in the third quarter of 2019 or the first quarter of 2020.
Passive components, such as capacitors and resistors, are expected to continue. The trend of price increases will continue into the third quarter of this year. Among them, the MLCC market demand gap exceeds 20%, and the price increase is expected to continue until the end of the year.
Resistor prices can not stop
Following MLCC Dachang Murata issued a heavy notice, announced that some MLCC products cut production by 50% in 2017 and prices, downstream customers panic mood of chip resistor preparation, detonated ahead of stocking boom, orders for major chip resistance plant influx.
Chip resistors have struggled with rising material prices, exchange rate fluctuations, and rising labor costs. Prices began to reflect upward this year. In terms of manufacturing cost of chip resistors, the Japanese plant is not as good as the Taiwan plant, so it will accelerate the conversion of production capacity to the automotive market. In addition, about 5 to 7% of other manufacturers will shift their production capacity to vehicles, resulting in the resistance supply chain. Without new capacity, this year's capacity has been expected to be catastrophic. It is expected that the supply and demand of chip resistors will be even tighter after the second quarter.
Passive components industry pointed out that due to the large capacity of resistors, even South Korea's Samsung did not layout related fields, it appears that the severity of the lack of resistance will never lose to the MLCC.
The chip resistance plant pointed out that the reason for the shortage of resistance comes from the imbalance in the supply and demand structure. Currently, the delivery time of the machines is as high as eight months or more. With no expansion for many years, there is almost no new capacity.
Chip resistance plant assessment, although it is believed that this wave of stocking tide does not rule out the possibility of stock picking, but because the overall capacity of the chip resistors has not increased, it would be impossible to obtain a large amount of bulk goods. At present, the order shipping ratio of more than 1 times It is to digest the inventory of the factory. After the peak season, it is easy for the client to completely digest the stock.
Resistance Factory said that the global capacity of chip resistors is about 360 billion units per month, and the giant is the largest. The monthly production capacity exceeds 90 billion, and the monthly production capacity of four manufacturers including KOA, Vishay, Panasonic, and Rohm is approximately one country.
It is reported that, compared with MLCC, the resistance process is relatively easy, and the time from feeding to output is shorter than that of MLCC, but it also means that the resistance of the chip resistance will be converted faster. With Japanese companies actively shifting their production capacity to vehicles, the remaining manufacturers also have capacity to invest in vehicles. The leading technology giant has a higher technical level than the MLCC in the automotive resistors. Capacity switching is only a matter of deciding how much to invest in. Feeling may not be deep, if this year cuts 5% more to the car, the supply and demand structure with no new capacity will worsen.
The safety stock of chip resistors is declining. The giants of the country and Mong Kwan are all around 30 days or even less than 30 days. The industry averages about 50 days. However, after the end of March, the sharp decline in stocks will be significant. In particular, resistance values, parameters, and product items of the resistors exceed the MLCC, and the class spacing is small, and it is easier to form long and short materials. This will pose a major challenge to EMS plant material preparation.
The chip resistor industry is well-known to Taiwanese companies. The market accounted for as high as 60 to 70%. Rohm, Vishay, KOA, and Panasonic have a total monthly capacity of approximately one country, a small capacity, and Samsung has no layout resistors. Not much, this does not include variables that are not available on the upstream ceramic substrate. The industry is worried that with the approach of the peak season, the difficulty of rescuing the shortage of resistance may exceed the MLCC.
The semiconductor industry price increases
For reasons of price increases, some people in the industry think that there are mainly the following reasons:
First, the continuous increase in the cost of raw materials, packaging materials and labor has led to an increase in manufacturing costs;
Second, while the consumption of single-use consumer electronics is increasing, the market demand for auto and industrial control is also growing rapidly.
Third, in the face of growing demand, the major component manufacturers are more cautious in expanding production, and it is difficult to quickly cover demand;
Fourth, from the perspective of the cycle of the component industry itself, the previous two sharp price increases were 2000 and 2010 respectively, and the price increase period was about 1 to 2 years.
From the demand side, the structural upgrade of consumer electronics + automotive electronics continues to catalyze the MLCC market demand: 1) Smartphones are lighter and lighter and feature-enhanced, all of which impose higher requirements on MLCC applications with more compact structures and higher performance. We understand that for an ordinary mobile phone, for example, at least 300-400 MLCCs are required. The iPhone 7 uses 700 MLCCs, and the iPhone 8 is expected to be more. With the increase in high-end smartphone shipments + mobile phone upgrade + 5G applications, the consumer electronics MLCC market is expected to continue to grow. 2) The increase in automotive electronics rates + functional upgrades has created demand for basic components such as MLCCs. Benefiting from the high boom in the downstream market, we judge that the MLCC market will grow steadily and maintain a compound annual growth rate of around 5% per year.
The price increase of passive components drives the domestic shift of the industry: From the perspective of downstream applications, domestic enterprises have inherent advantages in the development of MLCC. With overseas production capacity quitting the MLCC market, domestic companies rely on production cost advantages to expand production and speed up and quickly seize market share. Previously LED panels have followed such a domestically-made alternative path, and we believe that passive devices have the opportunity to become the next outlet.
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