2017 is not an easy period for electronic component market, especially for MLCC. Till the end of 2017, some of the MLCC manufacturers already stop to accept order, those manufacturers who still accepting order are extending the lead time, the Chinese manufacturers extend the lead time from 6 weeks to 12 weeks, the Taiwan makers extend from 12 weeks to 16 weeks, and the Japanese and Korean producer’s lead time are up to 24 weeks. What causes the shortage? Let’s see from different ends.
Observe from the supply end, the main reason for MLCC shortage in 2017 is that the Japanese and Korean manufacturers transfer their main market to industrial, electric car and medical market…etc. and fade out the 0.1uf – 1uf low capacitance market. In details, TDK is out from the consumer market and mainly focus on automotive and industrial market, Samsung, Kyocera and Taiyo Yuden already started to transfer the market 2 years back, and now, Murata is going to give up the low capacitance market which with size of 1210 and 1206. In fact, these MLCC giants was totally unprepared and surprised by the serious shortage of the low capacitance MLCC in 2017.
Observe from the application end, the automotive, industrial and medical applications has higher request on MLCC’s performance and quality, take temperature as an example, the consumer application request MLCC’s temperature range up to 85 degree only, but automotive request 125, 150 and even 200 degree, at the same time, automotive application has stricter request for the reliability and test environment, no doubt for it, the Japanese and Korean manufacturers has much more advantage on raw material, equipment, technology and experience, it is quite reasonable that they are going to focus on a higher market and to give up the low end market.
Observe from the demand end, actually the MLCC shortage and price hike is because of smart phone has increase the numbers of MLCC chips on board, besides, the wireless charger demand, IoT demand booming and the electric car demands push the MLCC market getting tighter and tighter.
By learning the above content, it seems that the MLCC shortage is predictable? Let’s see what does the manufacturers says.
Till the end of 2017, MLCC shortage gap was up to 100 billion – 200 billion pcs, particularly the sizes 0402, 0603, 0805 and 1206, FH Advanced Tech says, the main reason is portable communication, automotive and LED, among these items, the price hike of the NPO MLCC product which using in wireless charging are particularly serious, it up to 10 times.
Murata says, first of all, the smart phone market is almost saturated, but the new design and new function of smart phone request more MLCC and higher performance, secondly, the demands from PC, game console and IoT application increased, thirdly, the NPO MLCC market demands are increase very fast after Iphone’s wireless charging technology released. All of these makes the shortage happened and goes worse day by day, we can predict that the MLCC shortage will keep going in 2018 and it might be much more serious than 2017.
Been affected by the smart phone, automotive and industrial market demand, Yageo says, MLCC will keep in shortage during 2018. At the same time, Yageo says that they will adjust the production structure and to take more 10-15% production capability for Niche market, estimated the revenue will increase by 15-20% than 2017.
As we understand, the way to solve the shortage is to expand the production, the manufacturers actually started to responds since the beginning of the shortage, actions including supply inventory, adjust production line, build new factory for expanding the production capability, no matter how, it takes time to see the achievement of the actions. In case of expanding production, the manufacturers are taking the action carefully since it is a big investment, no matter on construction, equipment or labor cost, furthermore, the future market demands are not really clear at the current stage. As estimation, the shortage will be solved by end of 2018, but it doesn’t mean that all the MLCC will become smooth supply, because the demand from automotive, wireless charging and IoT...etc are keep booming.