Material Shortage & Price Trends (Feb 2018)

Since last year, price increases and extended lead times have been witnessed across many electronic component manufacturing segments. This report provides a preview and analysis of some heated segments such as MLCC, DRAM, PCB and resistor. A preliminary market overview was performed, and major players were analyzed in every segment to provide a whole picture.

Though MLCC, DRAM, PCB and resistor prices have been increasing over the last two years, the reasons behind this price surge phenomenon are not all the same.

MLCC price increase is majorly driven by the significant demand from the automotive and smartphone industries. The current capacity is unable to keep up with a substantially higher demand. Adding to this, key players such as TDK and Kyocera exited the general MLCC market to focus on the more profitable electric automotive industry, further exacerbating the situation. Prices of raw materials such as nickel, copper and palladium have also been climbing since the end of 2015, putting more cost pressure on MLCC manufacturers. Fortunately, Murata, Taiyo Yuden, Samsung Electro-Mechanics, Yageo and Fenghua Advanced Technology are all going to expand their capacity. The supply and demand imbalance should get better by the end of this year.

The DRAM market is an oligopolistic market. The “Big Three” – Samsung, Hynix and Micron – want to maximize their profitability. They are all conservative in expanding their capacity. The frantic heat from the cryptocurrency mining sector contributed to the strong demand for DRAM in addition to the high demand from server and smart device platforms. Samsung is expanding its DRAM capacity in South Korea which will generate an improvement in material availability and pricing in Q3, 2018.

To continue reading the Material Shortage & Price Trend Report White Paper, please download the PDF version below.

Download: Material Price Report (February2018)

Han Di is a contributor at the operational and strategic levels in supply chain development and is a Supply Chain Specialist at Silecta Inc., a supply chain services company.

%d bloggers like this: