• The majority of the supply base’s factory utilization has dropped to ~ 70%, compared to previous highs of 90%.
• There is a dip in backlog for automotive MLCC, however, end market demand for automotive products remain high.
• The backlog for Commercial MLCC is averaging between 2-4 months, while the backlog for automotive MLCCs is 3-5 months.
• Supplier inventory is increasing and reported at 2-4 months, while automotive MLCCs are still averaging a month or less.
• Lead times have been reduced by 4 weeks and being quoted at an average of 16-20 weeks.
• Some flexibility is seen in the automotive-grade supply for Japanese and Taiwanese manufacturers but still tight for some US manufacturers.
• General (commercial grade) capacitor supply and flexibility has improved recently.
• Suppliers expect demand to be strong in the automotive, 5G and networking sectors through CY2023.

• We see continued strong demand for the automotive, 5G and networking sectors.
• Declining bookings in specific case sizes demonstrate weakening demand in the mobile, computer and general white goods.
• Major suppliers' capacity expansion plans average around 10% growth annually. 
• Major Japanese suppliers are focused on automotive MLCC expansion of up to 15% annually.
• Korean and Taiwanese manufacturers are actively expanding their footprint in the automotive market.
• China MLCC suppliers continue to actively explore and expand their global business as demand in China has declined.
• The forecast for global MLCC revenue is expected to decline in 2022 by 6.1%  compared to 2021. 
• As suppliers have adopted different product development and capacity expansion plans depending on their focused business strategies, it is essential to align the technology requirements and supplier selection to ensure long term supply flexibility.

• Key raw materials such as nickel and copper pricing has declined.
• Demand for larger case sizes such as 1206 and 1210 remains stable and therefore pricing for such legacy items are generally flat to up.
• Pricing for high-reliability niche products, especially those with palladium content, remains high and is trending upwards.
• Inventory is building and factory utilization is decreasing. Therefore, we are seeing some cost reductions for general MLCC and focus items.
• Competitive tension is observed among Taiwanese suppliers in general purpose MLCCs. In automotive MLCC, Korean and Taiwanese suppliers are challenging the traditional stronghold of Japanese and US suppliers with improved lead times and supply availability.

• Tantalum Mn02 supply remains constrained on larger case sizes C, D and E, which are high volume runners in the automotive and industrial markets. 
• Smaller case sizes A and B, typically used on consumer products, are seeing relief in supply and reductions in backlog with lead times continuing to improve. 
• Tantalum polymer products, which are high volume runners in automotive, industrial, server and storage markets remain tight.
• Vishay has experienced significant productivity and supply issues due to labor shortages. Customers may need to approve alternate sources to mitigate potential supply risk.
• Commodity lead times average as follows: AVX 33 weeks, Vishay 40 weeks and KEMET 35 weeks. Small case size A & B have reduced to below 20 weeks.
• Tantalum Polymer book to bill ratio has improved from 1.5 to the range of 0.8-1.0. KEMET are quoting lead times of 34 weeks and Panasonic 24 weeks, with both suppliers showing increased flexibility to support Jabil and our customers.

• Kyocera has completed the acquisition of Rohm’s tantalum division.
• Kyocera has fully integrated AVX under KAP.
• Polymer aluminum will be the key focus technology in the long term.
• Demand for multilayer box type aluminum polymer and Hybrid Cap has shown strong demand year over year and will ultimately replace tantalum polymer due to its cost competitiveness.

• Tantalum and polymer pricing continues to be volatile due to instability in the supply chain, logistics and operational costs with continued impact from Covid-related dynamics.
• Prices for legacy products such as wet tantalum and military series will continue to increase due to a lack of long-term demand. Mn02 and polymer prices are expected to be either flat or face moderate increases for the balance of 2022.

• Aluminum capacitors supply constraints persist with strong demand from automotive, industrial and renewable energy markets. Key suppliers’ book to bill ratios are quoted at approximately 1.3:1.
• Lead times range between 36-54 weeks for Japanese-based suppliers and 24 weeks for Taiwan and China-based suppliers.
• Hybrid capacitors are still facing extreme supply constraints with allocation in place due to the strong demand from automotive and 5G infrastructure.
• Primary Japanese suppliers’ capacity has been fully booked into the middle of 2023.

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

• Aluminum capacitor prices are expected to remain flat with inflated raw materials prices including aluminum foil and copper, as well as logistics and operational costs. Continued tension in eastern Europe may further impact the supply of raw materials. 
• Film and Super capacitor prices are facing similar pricing pressures, with strong demand and impact to operational costs. 

• The majority of suppliers are seeing capacity utilization rates drop, down from just under 100% to an average of 80%. Finished goods inventory is high due to customer demand dropping and pushouts.
• Lead times are reducing in general, thanks to the availability of capacity and improved material supply.

Inductor

• Multilayer chip inductor lead times have decreased slightly to 18 weeks.
• Molded inductor lead times have decreased slightly. Vishay’s IHLP series lead times are quoted as follows: IHLP2020 - 18 weeks, IHLP2525 – 14-18 weeks, IHLP4040 – 18 weeks, IHLP5050 – 14 weeks, IHLP8787 – 14 weeks. TDK’s SPM series lead times remain on average at 28 weeks due to tight capacity.

Filter

• Ferrite bead lead times are largely over 20 weeks. Some manufacturers have extended larger case size lead times to over 30 weeks and are managing supply via an allocation process. Little flexibility for short term supply of 0603 case size and above. However, major suppliers expect supply to stabilize for up to 0805 size in the Q4 of 2022 while size 1206 and above will remain constrained into 2023. At the same time, several suppliers are looking to reduce lead times for smaller sizes by 2-4 weeks from 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 are 28 weeks. There is very little flexibility for any delivery pull-ins.

Transformer

• The allocation situation of raw material ferrite cores has eased now that the market is back to  traditional order to lead time behavior. However,  lead times are still quoted at a high level, which is longer than the norm back in 2020. TDK’s VGT series lead times stay on average at 30 weeks due to tight capacity.

• Chilisin and its subsidiary brands (Mag.Layers, Magic & Bothhand) are being merged under Pulse Electronics by the end of 2022. The brands Chilisin, Mag.Layers, Magic and Bothhand are being retired, products will be rebranded under the Pulse Electronics brand. 
• Taiyo Yuden announced EOL plans for their chip ferrite bead, BK/BKP line up, which will be terminated by the end of 2022.
• We continue to see new start-ups in western and central China, primarily driven by continuous cost increases (labor, facility etc.) in the southern China region. 
• We continue to see new startups in Vietnam and capacity expansions in ASEAN, primarily driven by the US/China trade conflict.

• Prices are generally flat due to logistics challenges and some remaining uncertainty in the market. High inventory on the supplier side were manufactured months ago with high cost, hence suppliers are attempting to deplete inventory at the original pricing level rather than reducing the current prices.
• SMD inductor and filter suppliers are holding pricing flat. Some suppliers have agreed to push back price increases of big size ferrite beads to 2023. Focused, small size ferrite beads have seen minor cost downs.
• Larger size legacy SMD inductors and filters, customized inductors and transformers are flat after previous increases. Logistics and transportation costs remain high in recent quarters.
• Raw material costs fall back from recent super high levels, however, they will still stay higher than the more normal conditions during early 2020.

• The market is softening in general and is more evident in the consumer and smartphone segments. Panic buying has subsided, and many OEMs are adjusting their demand, partly due to the severe shortage of certain semiconductors families. 
• Delay in the delivery of manufacturing equipment is affecting suppliers’ capacity expansion plans.
• Supply situation for 3215 size KHz crystals has improved for the tier-2 and tier-3 suppliers with lead times at 20-30 weeks. Tier-1 suppliers Epson, TXC and Microcrystal are still placing their 3215 size KHz crystals on allocation as they 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 12-16 weeks for tier-2 and tier-3 suppliers. It remains constrained with lead times at 24 to 26 weeks for tier-1 suppliers as they continue to focus on smaller size packages. Lead times continue to increase for larger size crystals, size 5032 and above, due to a shortage of packages and quartz blanks. Most tier-1 and tier-2 suppliers have already or are planning to EOL larger size packages. 
• Lead times for smaller size MHz crystals, 2016 and 1612 sizes have improved, ranging from 10 to 12 weeks. This remains the focus for most suppliers as capacity expansion continues. 
• Lead times for oscillators are 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 will continue into 2023. Some IC suppliers had 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 ranging from 10 to 12 weeks. IC supplier AKM has engaged Renesas as their manufacturing partner and the production output has gradually increased since Q3 of 2021.

• 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 roadmaps.
• Downsizing is essential. We propose the use of the following package sizes: 1610 for KHz crystals, 1612 or 2016  for MHz crystals and 2550 or 3225 for SPXO.
• If there is a need to use HC49 Metal-can crystals, we suggest the approval of Taiwanese/Chinese suppliers.

• The constraint in IC supply continues to inflate raw material costs for oscillator products.
• Labor costs continue to increase.
• There are early and limited signs of improvement in logistics rates for both air and ocean, but it is still too early to know if this will continue.
• Pricing has stabilized for smaller size crystals. Projecting price reductions from tier-2/3 suppliers starting Q1’23. 
• TCXO pricing has stabilized after huge increases over the last 2 years. 
• Price increases are expected to continue for oscillators and larger size crystals products.

• We continue to see strong market demand in 2022. Extended lead times continue due to labor and raw material shortages, logistics constraints and the overall disruption in the global supply chain.
• Lead times for fuses are quoted 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 24 weeks.   
• Lead time for Gas Discharge Tube (GDT) has stretched to 24 weeks. Neon gas is used in GDT production and its supply maybe impacted by the Russian-Ukraine war, as this region is a major source for the gas.
• 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, a circuit breaker manufacturer for the HVAC market. 
• Bourns acquired Keko-Varicon, a 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 and fuse holders. These increases are driven by the elevated level of raw materials – Gold, Silver, Copper, Palladium, Zinc, Tin and Neon Gas, as well as increases in both labor and logistics costs. 
• Neon gas pricing has increased drastically since Russia invaded Ukraine in February 2022. Ukraine supplies >50% of global supply of Neon gas. We anticipate further price increases in Neon gas if the situation in Ukraine persists. This will impact the pricing for GDT products.

• Capacity constraints, supply allocation and extended lead times are expected to continue through the 4th quarter of 2022 and into 2023. Vishay, Panasonic, KOA, and Susumu continue to see a huge increase in order intake, with book to bill ratios as high as 1.5 to 2:1 or higher. KOA continues monthly allocation, only supporting existing forecasted business.
• High demand is driven from major markets like automotive, 5G and telecommunication. The surge in demand has further exacerbated the already highly constrained supply situation.
• General grade resistor supply has improved significantly as the consumer and mobile market has softened with B2B ratios now below 1. Inventory pressure is increasing among manufacturers and distributors, with a risk of inventory dumping in China.

• Accelerated shift in technology in the competitive landscape
• Vishay continues to be the technology leader in resistors but is increasingly facing competition from the lower technology players.
• Japanese suppliers have de-emphasized mature or standard products like standard thick film resistors and array due to low profitability thus impacting the suppliers left to support the overall demand.
• Taiwanese resistor manufacturers have been approved on more automotive AMLs 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 smartphones, lightweight laptop computers, and tablets drive the miniaturization of electronic components such as resistors.

• Price increase across global markets
• Price adjustments have been common since Q2’21. We now see this upward trend in pricing 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 logistics and labor costs.
• Chinese and Japanese substrate makers have already increased pricing by 10%-15% and in some cases, up to 50%.
• Increase in pricing levels across most case sizes, with the mature/legacy products being more pronounced.