• The majority of MLCC supplier’s factory utilization remains high at > 95%.
• Supplier backlogs are on average 3-4 months while the backlogs for automotive grade MLCC is over 5-6 months.
• Supplier inventory is averaging 1-2 months while automotive grade MLCC inventory is reportedly less than a month.
• Lead times are averaging between 20 and 24 weeks, with “soft-allocation” reported by US and some Japanese manufacturers.
• Short lead time orders and pull-in flexibility remains low.
• Manufacturers continue to see strong orders from the automotive, PC & Server and industrial markets and expect the usual mobile market pick up in the 2H’22.

• Demand for MLCC remains high across industries including automotive, industrial machinery, defense and medical.
• Major manufacturers are expanding capacity approximately 10% annually.
  • Major Japanese manufacturers are targeting automotive grade MLCC and expanding capacity by up to 15% annually.
• Korean and Taiwanese manufacturers are actively growing their footprint in the automotive market.
• Murata will proceed to “End Of Life” over 7,000 parts impacting Jabil, with final “Last Time Buy” extended to the end of March 2022.
• After the completion of Yageo’s acquisition of Kemet in 2020, Yageo have now merged sales operations while  maintaining the Kemet brand.
• China based MLCC manufacturers continue to actively explore and  expand their global business in commercial grade MLCC in smaller case sizes (e.g., 0402 below) and standard capacitance (below 1uF).
• Suppliers have also placed thousands of MPN status as NRND (Not Recommended for New Design) and will defocus and reduce capacity in the mid to longer term.
• As suppliers adopt different product development and capacity expansion plans based on their focused business strategies, it is essential to align the technology needs and supplier selection to enable the most effective sourcing strategy.

• The increases in raw material costs, logistics challenges and reduced inventory is affecting every manufacturer and their ability to support many customers requirements.
• Pricing trends on legacy or mature items are generally flat-to-up.
• For high reliability, niche products such as those with palladium content, pricing remains high and will continue to trend upwards.
• We are seeing some competitive tension between Taiwanese suppliers for commercial grade MLCC. For automotive grade MLCC, Korean and Taiwanese manufacturers are challenging the stronghold of the traditional Japanese and US suppliers.

• Tantalum Mn02 supply remains constrained, mainly on larger case sizes C, D and E which are commonly used in the automotive and industrial segments.
• Smaller case sizes (A and B) primarily used on consumer products has improved for supply and backlog.
• Tantalum Polymer capacitors, highly used in automotive, industrial, server and storage remain extremely tight in supply.
• Vishay is encountering productivity and supply issues due to the impact of labor shortages. Customers may need to approve alternate sources to mitigate supply risk.
• Commodity lead times are on average 33 weeks with AVX, Vishay 40 weeks and Kemet 35 weeks.
• Tantalum Polymer capacitors are still in high demand with book to bill ratios of 1.7:1. Kemet is quoting 38 weeks and . Panasonic 34 weeks – both equally constrained.
• Kemet is in a healthier position in terms of flexibility and capacity to support Jabil and our customers.

• Polymer Aluminum will be the key focus in terms of supply and cost – this technology will replace conventional and legacy  
• Mn02 products.
• Demand for multi-layer box type Aluminum Polymer has been showing strong demand and increasing year over year as it replaces tantalum polymer.
• All major suppliers are aggressively expanding their capacity for HYBRID CAP with the overwhelming demand coming from EV and automotive applications.

• Tantalum and polymer pricing continues to be volatile due to volatility in the supply chain, logistics challenges and operational costs directly related to the global pandemic.
• Prices for legacy products such as wet tantalum and military series will continue to increase due to a lack of longer-term focus on the technology. Mn02 and Polymer pricing is increasing and is expected to continue this trend through 2022.

• Aluminum capacitor manufacturers are all operating at full manufacturing capacity. Capacity is extremely overbooked, and the backlog continues to grow with the book to bill ratio averaging 1.7-1.8:1.
• Lead times continue to stretch; manufacturers are reporting 36-54 weeks. Manufacturing capacity have been sold out through 2022 and suppliers have less flexibility to support shorter lead time orders.
• Hybrid and SP capacitors are both extremely constrained with allocation in place due to the strong demand from automotive, 5G infrastructure, cloud, storage and networking.
• Mainstream Japanese manufacturers’ capacity has been fully sold out until the middle of 2023.

• We continue to advocate a multi-source strategy; this may have a negative impact on the blended component cost but it’s is extremely important to secure supply and to minimize the risk to production.
• Jianghai is now supporting most of the high capacitance and high voltage capacitor markets and has the greatest potential for growth in the high voltage snap in technology space.
• Aihua continues to increase capacity. The China-based supplier is now ranked #4 globally with a particular focus on standard parts.

• Aluminum capacitor pricing is expected to continue to increase in 2022 due to inflated prices of raw materials such as foil and copper as well as additional logistics and operational costs. The Russian invasion of Ukraine may further impact the supply of raw materials; however, this may be a longer-term supply concern.
• Film and Super capacitor prices are facing similar cost pressures with strong demand and increased operational costs.

• Almost all facilities are operating at full capacity due to the increased backlog that has extended into 2022.
• Lead times should not extend further but remain at a high level due to the increase in raw material lead times.
• Inductor
  • Multilayer chip inductor lead times remain extended. Manufacturers’ book to bill ratios have reduced but still >= 1 and lead-times remain at 20-36 weeks.
  • Molding inductor lead times are not forecast to extend further due to newly added supplier capacity. Vishay’s IHLP inductor series lead times have reduced on the following families due to the new capacity coming online: IHLP2020 - 18 weeks, IHLP2525 – 14-18 weeks, IHLP4040 – 18 weeks, IHLP5050 – 14 weeks, IHLP8787 – 14 weeks.
• Filter
  • Ferrite bead lead times are typically greater than 20 weeks. Some manufacturers have quoted larger case sizes at more than 30 weeks and are scheduled to implement allocation processes. We see little flexibility in expediting delivery of 0603 case size and larger. Major suppliers are still trying to clear their extended backlog.
  • Common mode choke lead times are up to 36 weeks. TDK remains highly constrained. TDK ACT45 and ACT1210 series are 36 weeks. TDK ACM series is 28 weeks with little flexibility provided for any pull-ins.
• Transformer
  • Lead times remain at a high level due to the shortage of ferrite core.The core  manufacturers have been struggling to get enough supply of the primary raw material Iron (II) Oxide or Ferrous Oxide (FeO).

• Yageo acquired all outstanding shares of Chilisin’s common stock in a stock-swap transaction. The transaction was closed on January 5, 2022.
• Chilisin and its subsidiary brands (Mag.Layers, Magic & Bothhand) have merged into Pulse Electronics. The brands Chilisin, Mag.Layers, Magic and Bothhand have been retired, and products rebranded under the Pulse Electronics brand.
• Taiyo Yuden had announced EOL plan for their chip ferrite bead, BK/BKP line up, to be terminated by the end of 2022.
• We continue to see new start-ups in western/central China, primarily driven by continuous cost increases (labor & operations) in the southern China region.
• Since 2018, we have seen new start-ups in Vietnam, primarily driven by the US/China trade conflict.

• Prices are generally flat due to tight capacity, increased raw material costs, increased logistics costs and reduced inventory in the market.
• SMD inductors and filters, including focused product lines, are experiencing increased production costs resulting in no reduction in prices.
• Price levels for customized inductors, transformers, larger size SMD inductors and filters are expected to increase, primarily due to the high content of raw materials which are under significant cost pressure. In addition to raw materials, logistics and transportation costs continue to increase.
• The increase in raw material costs started back in 2016 but paused during 2020, we have seen price levels surge since the end of 2020.

• The incredible acceleration of demand has out paced production capacity and caused numerous raw material (Package, Quartz Blank and IC) constraints as well as shortages in Crystals and Oscillators. For certain products, it has reached a point where global demand is significantly higher than the available global production capacity.
• Covid-related shutdowns and restrictions have caused factories to operate with a reduced workforce resulting in decreased output. To compound this, we have seen labor shortages in suppliers’ factories in China and Malaysia as workers are not returning to work.
• Book to bill ratios are quoted at high levels – averaging between 1.5 and >2:1 for certain products.
• Industry analysts have forecasted the current constrained supply situation to continue well into 2022 and possibly into 2023.
• KHz Crystals are on worldwide allocation, especially 3215 size which is commonly used in many product applications. Many suppliers have their capacity booked well into 2022 and in some cases through the first half of 2023, they are struggling to meet existing customers’ demand and are rejecting any new business / increased demand. Moreover, suppliers continue to shrink their production capacity for 3215 size and focus on the expansion of 1610 size output.
• Lead times for smaller size MHz Crystals, 2016 and 1612 sizes have improved, ranging from 12 to 20 weeks. For 3225 and larger sizes, the lead-time remains at more than 30 weeks.
• Lead times for Oscillators are at 50 weeks or more and continue to stretch primarily due to the shortage of ICs. Some IC suppliers have announced EOL on their mature products which has further impacted the production of certain Oscillators.
• The supply situation for standard TCXO has improved with lead times are now ranging from 16 to 20 weeks. IC supplier AKM has engaged Renesas as their manufacturing partner and the production output has gradually increased since Q3’21.

• With an increasing number of products going obsolete due to maturity or unavailability of raw materials, OEMs need to design their products to align with suppliers’ latest technology roadmap.
• Downsizing is essential. We propose the use of the following packages: 1610 size for KHz Crystals, 1612 or 2016 size for MHz Crystals and 2550 or 3225 size for SPXO.
• If there is a need to use HC49 Metal-can Crystals, we suggest the approval of Taiwanese/Chinese suppliers.

• The shortage of raw material (Package, Quartz Blank and IC) due to Covid-related factory shutdowns, labor shortages and increased global demand continues to inflate raw material costs.
• The increased demand has also put a strain on the availability of labor, and thus labor costs continue to rise.
• Increased demand has also strained the transportation and logistics and continues to drive shipping costs to new inflated levels.
• We have already experienced a few rounds of price increases in many Crystals and Oscillators products since 2020 with price increases expected to continue well into 2022.
• TCXO pricing has stabilized after the substantial price increases, we have seen over the past 12 months.

• We are seeing increased supply constraints resulting from the overwhelming increase in demand across most market sectors.
• Lead times for Fuses have stretched to 16-26 weeks, depending on product. SMT Fuses have stretched to 35 weeks.
• Lead times for Leaded Varistors have stretched to 20-30 weeks.  
• Lead times for Multilayer Varistors (MLV) have stretched to 20-30 weeks. 
• Lead times for Gas Discharge Tube (GDT) have stretched to 24 weeks.
• Littelfuse, the largest Fuse manufacturer, is continuously working on capacity expansion to meet the high demand for their products.

• Littelfuse acquired Carling Technologies, manufacturer of Switches and Circuit Breakers.
• Littelfuse acquired Hartland Controls, manufacturer of Circuit Breaker for the HVAC market.
• Bourns acquired Keko-Varicon, manufacturer of overvoltage protection components that include Varistors and EMI suppression products. The Bourns sales team will manage the quotes for Keko-Varion products.

• Price increases across all product families - Fuses, Varistors, GDT, Fuse Holders. The increases are driven by the elevated price of raw materials – Gold, Silver, Copper, Palladium, Zinc, Tin as well as increases in labor and freight costs.

Capacity constraints, supply allocation and extended lead times. 

• Suppliers continue to see a huge increase in new orders, with book to bill ratios as high as 1.5-2:1 or higher. 
• Supply constraints expected to continue throughout 2022.
• Continued high demand driven from major markets like automotive, 5G, mobile and telecommunication. The recent surge in demand has further exacerbated the already highly constrained supply situation.
• To illustrate the situation with some major resistor manufacturers, Vishay and Susumu are now running at 100% capacity with lead times extending to over a year. KOA have announced monthly supply allocation to all their customers. Panasonic and Rohm are at full capacity and only supporting existing forecasted business.

Accelerated shift in technology in the competitive landscape.

• Vishay continues to be the technology leader in resistors but is increasingly facing competition for the lower technology players.
• Japanese suppliers have de-emphasized mature or standard products such as standard thick film resistors and array due to low profitability thus impacting the suppliers left to support the overall demand.
• Taiwanese resistor manufacturers have gained a foothold on more automotive AMLs recently, due to the severely constrained situation the traditional automotive resistor manufacturers find themselves in.
• Demand for smaller resistors continues to accelerate despite the technical problems associated with the miniaturization of electronic components. Consumer demand for small, easily portable electronic products like compact smartphones, lightweight laptop computers, and tablets drive the miniaturization of electronic components such as resistors.

Price increase across global markets.

• Price adjustments have happened regularly since Q2’21. We now see this price uptrend spreading to all global markets.
• Primary factors for the cost increases are capacity constraints, rising costs of raw materials such as ceramic substrate,  copper, palladium, silver, nickel and ruthenium as well as logistics and labor costs.
• Chinese and Japanese substrate makers have already increased pricing by 10-15% and in some cases up to 50%.
• Increases in pricing are apparent across most case sizes, with the mature/legacy products being even more pronounced.