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Jabil's Global Commodity Intelligence Archive
Q2 2022
Jabil's Global Commodity Intelligence Archive
Q2 2022
INTERCONNECT COMMODITIES
CONNECTORS
- Most of the suppliers’ factories are running at almost full capacity and there are still certain factories that are further constrained from the spread of Covid. Although no impact yet with China’s zero-Covid policy, we will continue to monitor each supplier’s manufacturing situation.
- There is still backlog that needs to be cleared and thus we are not seeing much flexibility to support urgent upsides and pull-ins.
- Raw material (copper alloy, metal strips, and resins) shortages continue to be a challenge and we are expecting this to continue. Adding on to the challenge is the current logistics constraints that has caused shipments to be longer than usual.
- Key supplier’s book-to-bill ratios remain high and ranges from 1.1-1.3:1.
- The supply base remains stable with no tell-tale sign of any suppliers exiting the market.
- December 2021: Amphenol Corporation announced that it has acquired Halo Technology Limited for approximately $715 million. Halo is headquartered in Tustin, CA with operations in North America and Europe. It is a leading provider of active and passive fiber optic interconnect components for the communications infrastructure markets with reported 2021 revenue of approximately $250 million.
- December 2021: Molex has acquired core technology and intellectual property (IP) from Keyssa Inc., a pioneer in high-speed contactless connectors. The acquisition of this unique wireless chip-to-chip technology, including over 350 filed patent applications will accelerate Molex’s strategy to further expand and diversify its micro connector portfolio with highly flexible, cable-free connectors for near-field, device-to-device applications.
- Overall pricing continues to increase due to capacity constraints caused by the virus outbreak. These increases are exacerbated by raw material headwinds (gold, copper, palladium) driving costs up, raw material supply constraints (copper alloy, resins), and higher freight costs. We do not foresee opportunities for cost reductions in the near term.
- Continue to see price increases from most of the manufacturers as they no longer can absorb the raw material and freight cost increases.
- The pricing forecast for the second half of 2022 will be very dependent on raw material pricing and freight cost, and we do not see any sign of easing.
- Price increases are still common on legacy products like Headers & Receptacles, D-Sub, and labor intensive RJ45 Magjacks.
GOLD, COPPER & PALLADIUM PRICE TRENDS
RELAY
- Still see strong demand, bookings and an accumulating backlog.
- The majority of factory (TE, Omron & Panasonic) capacity is fully booked in Q2’22.
- The on-going Covid pandemic still has an impact on some supplier capacity located in the JiangSu & ShenZhen areas.
- Key suppliers like TE, Omoron and Panasonic still report high book to bill ratios.
- The supply base remains stable with no tell-tale signs of any suppliers exiting the market.
- Overall price increasing due to capacity constraints caused by raw material and labor shortages.
- Price trending up due to increasing freight and labor costs.
SWITCH
- Most suppliers’ capacity is fully booked for Q1 and Q2.
- Overall, lead times remain flat compared to last quarter, approximately 10~18 weeks.
- The on-going Covid pandemic, raw materials and labor shortages still impact the lead time of most Chinese suppliers.
- Logistics constraints is another factor impacting delivery.
- The supply base remains stable with no tell-tale signs of any suppliers exiting the market.
- C&K is currently impacted by the Covid situation in Vietnam. The factory is still running, but with limited capacity.
- Overall price increasing due to capacity constraints, caused by raw material and labor shortages.
- Price trending up due to increasing freight and labor costs.
BATTERY
Global lithium prices continue to increase due to tight supply and strong China demand.
- Global EV sales jumped 83% year-on-year in 2021.
- Panasonic BR battery is still on allocation, pull in flexibility remain low.
- CR coin battery supply is stable with lead times quoted at 14-24 weeks.
- The supply base remains stable with no tell-tale signs of any suppliers exiting the market.
- Murata CR2032M high temperature production location has changed to Indonesia
- Power Glory plans to increase their Coin Battery capacity in Yichang.
- Chinese lithium prices continue to post strong gains on limited availability.
- Seaborne lithium prices supported by the Chinese market amid similarly tight conditions.
- European, US lithium prices track East Asia rally on strong demand.
- The cost of major raw materials such as electrolyte, manganese dioxide powder, especially, metal lithium has drastically increased by 300% since February 2021 and we expect further increases.
- Supplier price increases started in Q1‘22, and we forecast more increases in the future if raw material continues upwards.
- Alternative sources are recommended to counter against increases.
The price of lithium metal increased by more than 250% since end of 2020, see below cost chart.
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