Recently, Yageo's chairman Pierre Chen said in a media interview that the trade war is affecting the confidence of end users. Since August and September last year, the impact of the trade war on the market has intensified, which is beyond the expectation of many people. Recently, The situation is worse than imagined.
For the current capacity utilization rate, Pierre said that it is only about 30-40% now, mainly considering the customer's inventory. The trade war began in September last year, and the 25% tariff has a great impact on the entire market. Therefore, Yageo began to sell inventory, including end customers and authorized distributors. The current inventory level is about 5-6 months, and the ideal stock level should be 4 months or so. For the time being, the distributors' mentality is quite conservative. Most of them used to have 3-4 months of inventory, and now some distributors are only willing to keep one month of inventory.
As for whether the trade war affects the expansion plans of Japanese and Korean factories, Pierre pointed out that Japanese and Korean manufacturers are more conservative in capital expenditures. Yageo's own expansion is mainly for high-end products, and the expansion of standard products will be slightly slowed down. Overall, the current market outlook is cautious and conservative.