• Majority of supplier's factory utilization remains high at >90%
• Backlog at suppliers are 2-4months while automotive MLCC are over 4-6months
• Inventory at suppliers are 1-3months while automotive MLCC are a month or less
• Leadtime are largely 20~24 weeks, with “soft-allocation” observed in US suppliers and some Japanese suppliers
• Short lead time and pull-in flexibility remains low, such as automotive MLCC
• General capacitor supply and flexibility has been improved.
• Suppliers continue to see strong orders from the Automotive, PC & Server & Industrial market and expect mobile market to pick in 2H2022.

• Demand for MLCC remains high across industries including automotive, industrial machinery, defense, and medical
• The majority of suppliers are expecting a pick up in demand for the mobile and consumer market in the 2H2022
• Major supplier’s capacity expansion plan is around 10% annually
  • Major Japanese suppliers focus on automotive MLCC expansion of up to 15% annually
  • Korean and Taiwanese are actively expanding their footprint in the automotive market
• After the completion of Yageo’s acquisition of Kemet in 2020, Yageo is actively merging its sales operations while maintaining the Kemet brand since 2021.
• China MLCC suppliers continue to actively explore and  expand their global business in general MLCC in a smaller size (eg. 0402 below) and standard capacitance (below 1uF)
• Suppliers had also placed thousands of MPN status as NRND (Not Recommended for New Design) and will defocus & reduce capacity in the mid-long term
• As suppliers have adopted different product development and capacity expansion based on their focused business strategies, it is essential to align the technology needs and supplier selection to yield a balance of supply needs.

• The increases in raw material costs, logistics costs, etc., are key factors for all suppliers
• Pricing trends on Legacy items are generally flat-to-up
• High reliability, niche products such as palladium content, pricing remains high and upward trend
• While Chinese manufacturer increasing their capacity aggressively and trying to capture the market, price competition involved in general caps are been observed.
• Price competition is observed among Taiwanese suppliers in general MLCC while for automotive MLCC, Korean and Taiwanese suppliers are challenging the stronghold of Japanese & US suppliers.
• Certain US manufacturer increase their pricing for nonfocus commercial capacitors

• Tantalum Mn02 supply constrain mainly on larger case size C, D and E which highly consumable in Automotive and Industrial Segment.
• Smaller case size A and B focus on consumer products reflect a major relieve in supply and backlog. LT continue to shrink and improve.
• Tantalum Polymer highly consumable in Automotive, Industrial, Server and storage remain intense in supply.
• Vishay encounter massive productivity and supply impact due to labor shortages. Customer may need to approve alternate source to mitigate the supply risk from VISHAY
• Commodity LT  averagely for AVX 33WK, Vishay 40 WK and KEMET 35WK.
• Tantalum Polymer still on high demand with BTB ratio of 1.5-1.7 with 38weeks LT from KEMET. Panasonic is equally on overloaded capacity at 34 WK LT.
• Kemet have a healthier position in terms of flexibility and capacity to support JABIL at the current market supply disruption.

• Kyocera fully acquired ROHM tantalum division and started to take orders with immediate effect.
• Polymer Aluminum will be the key focus in terms of supply and cost.
• Demand for multilayer box type Aluminum Polymer has been showing strong demand and increasing year over year to replace tantalum polymer for a cheaper cost.

• Tantalum and polymer pricing continue volatile due to the instability of the supply chain, logistic and operational cost implication impact of the global pandemic.
•  Prices for legacy products, for example, Wet tantalum and military series will continue to increase due to a lack of economic scale. Mn02 and Polymer prices are expected to keep flat for the whole of 2022 with Jabil leverage.

• Aluminum capacitors supply constrain persist with the strong market demand mainly from Automotive, Industrial and Renewable Energy. Key suppliers BTB ratio at around 1.5-1.7
• LT stretched in between 36-54 weeks and  capacity fully occupied thru out 2022. Suppliers expected to hv less flexibility to support short LT orders.
• Hybrid cap and SP Cap are both facing extreme supply constrain with allocation mode due the strong demand recovery from Automotive, 5G infrastructure, Cloud, Storage and Networking.
• Main streams Japanese supplier capacity has been fully sold out til mid of 2023.

• We continue to advocate a multi-source strategy, this may have a negative impact on the blended component cost but this is extremely important to secure supply and 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 have a major expansion, the China-based supplier is now ranked no.4 globally with particular focus on standard parts.

• Aluminum capacitor prices increase in Q3 2022 and are expected to persist due to inflated raw materials prices, Aluminum foil, copper, logistic cost, and operation cost. Geographical tension in Europe may further impact the supply of raw materials.
• Film cap and Super cap prices similarly face cost pressure with strong demand and operation cost impact.

• Almost all facilities will remain operating at tight capacity though the backlog is not piled up further.
• Lead times will not extend further but remain at a high level due to the stuck raw material lead times and logistics difficulties
   
• INDUCTOR
  • Multilayer chip inductor lead times remain high. Manufacturers’ BB ratio is still ≈ 1 and lead times stay at 20 - 36 weeks.
  • Molding inductor lead times will not extend further due to supplier capacity expansion. Vishay’s IHLP inductor series lead times have reduced on the following families due to the new capacity coming online: IHLP2020 - 18 weeks, IHLP2525 – 14-18weeks, IHLP4040 – 18 weeks, IHLP5050 – 14 weeks, IHLP8787 – 14 weeks.
     
• FILTER
  • Ferrite bead lead times are largely over 20 weeks. Some manufacturers extend bigger case size to over 30 weeks and order fulfillment via allocation method. Low flexibility for pull-in of 0603 case size and bigger. However, major suppliers expect to stabilize for up to 0805 sizes after 2022Q3 while 1206 size and above will remain constrained into 2023.
  • 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. Low flexibility for pull-in.
     
• TRANSFORMER 
  • Lead times remain at a high level due to the constrained supply of raw material ferrite core. The core manufacturers have been struggling to get enough sub-raw material FeO since the end of 2020, which is not trending to a worse situation now but also no evidence yet of getting better.

• 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) are being merged into Pulse Electronics. The brands Chilisin, Mag. Layers, Magic, and Bothhand are being retired, and products rebranded under the Pulse Electronics brand.
• Taiyo Yuden had announced the 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, facility, etc.) in the southern China regions.
• We continue to see 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 filter are experiencing the increased production costs leading to no price reduction in general. However, focused small size ferrite beads have minor cost down.
• Bigger size legacy SMD inductors and filters, customized inductors and transformers are expected to price increase selectively due to the high content of raw materials, which are under significant cost pressure. Also, logistics and transportation costs have increased significantly in recent quarters.
• Raw material cost stay at the high level and some even have surged hitting the record price historically.

• The ultra-high level of activity and panic buying has subsided. OEMs are making adjustment to their demand, partly due to the severe shortage of Semiconductor. Market demand remains strong but not at the level experienced in 2021.
• Suppliers continue to face Covid-related shutdowns and restrictions especially in Asia, resulting in labor shortages.
• Challenges in logistic remains, especially in China where lockdown and restrictions are imposed. 
• Delay in delivery of manufacturing equipment is affecting Suppliers’ capacity expansion.
• Book to bill ratios are quoted at high levels – average 1.5 to >2 : 1 for certain products.
• Supply situation for 3215 size KHz Crystals has improved for the Tier 2/3 suppliers with lead times at 20-30 weeks. Tier 1 suppliers Epson, TXC & Microcrystal are still placing their 3215 size KHz Crystals on allocation. In general, suppliers continue to shrink their production capacity for 3215 size and focus on the expansion of 1610 size.
• Lead times for 3225 size MHz Crystals has improved to 14-20 weeks for Tier2/3 suppliers. It remains constraint with lead times at 24 to 30 weeks for Tier 1 suppliers as they continue to focus on smaller size packages. Lead times continues to increase for bigger size Crystals, 5032 and above, due to the shortage of packages and quartz blanks. Most Tier1/2 suppliers have or are planning to EOL the bigger size packages.
• Lead times for smaller size MHz Crystals, 2016 and 1612 sizes have improved, ranging from 12 to 14 weeks. This remains the focus for most suppliers and capacity expansion continues.
• Lead times for Oscillators at 50 weeks or more and continue to stretch primarily due to the shortage of ICs. Industry analysts have forecasted the current supply constraint situation to continue well into 2022 and possibly into 2023. Some IC suppliers had announced EOL on their matured products which has further impacted the production of certain Oscillators.
• The supply situation for standard TCXO has improved with lead times ranging from 10 to 14 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 supply constraints in raw material (Package, Quartz Blank and IC) due to Covid-related factory shutdowns, labor shortages and logistic disruption continues to inflate the raw material costs.
• The Covid-related restrictions also put a strain on the availability of labor, and thus labor costs continue to rise.
• Logistics constraints 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, especially in Oscillators and bigger size Crystals products.
• TCXO pricing has stabilized since the huge increases in the last 2 years.

• We continue to see strong market demand in 2022. Extended lead times remains due to labor and raw material shortages, logistic constraints and overall disruption in global supply chain.
• Lead times for Fuses at 16-24 weeks, depending on product. SMT Fuses around 24 weeks, Resettable Fuses around 22 weeks.
• Lead times for Varistors, both Leaded and SMT type are approximately at 24 weeks.  
• Lead time for Gas Discharge Tube (GDT) have stretched to 24 weeks. Neon gas is used in GDT production and its supply is impacted by the Russian-Ukraine war.
• 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 level of raw materials – Gold, Silver, Copper, Palladium, Zinc, Tin, Neon Gas as well as increases in labor and logistic costs.
• Neon gas pricing has increased drastically since Russian invaded Ukraine in February of 2022. Ukraine supply >50% of global supply of Neon gas. We anticipate further price increases in Neon gas if the current Russian-Ukraine war continues to intensify. This will impact the pricing for GDT products.

Capacity Constraints, Supply allocation & Extended lead times. 

• Suppliers continue seeing a huge increase in order intake, with book to bill ratios as high as 1.5 to 2 or higher. 
• Supply constraints expected to continue throughout 2022
• High demand driven from major markets like automotive, 5G & telecommunication. The surge in demand has further exacerbated the already highly constrained supply situation.
• To illustrate the situation with some major resistor manufacturers, Vishay & Susumu are now running at 100% capacity with lead times extending to over a year, and in some cases up to 3 years. KOA have announced monthly supply allocation to all their customers.  Panasonic & 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 deemphasized mature or standard products like standard thick film resistors & array due to low profitability thus impacting the suppliers left to support the overall demand.
• Taiwanese resistor manufacturers have gain entries into more automotive AML approval recently, due to the severe undersupply situation from the traditional automotive resistor manufacturers.
• Demand for smaller resistors continues to accelerate despite the technical problems associated with the miniaturization of electronic devices.  Consumer demand for small, easily portable electronic products like compact smart phones, lightweight laptop computers, and tablets drive the miniaturization of electronic components such as resistors.

Price adjustment have happened since Q2 2021. We now see this price uptrend spreading to all the 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 logistic & labor costs.
• Chinese  & Japanese substrate makers have already increased pricing by 10%-15% and in some cases up to 50%.
• Increase in pricing across most case size, with the mature / legacy products being more pronounced.