Chinese giants' strategic layout for passive component supply in recent years

• Author:
• Source:
• Date: 2023-04-24
• Views: 105Times

According to Chinese Taiwan media reports, affected by Yageo Electronics’ price increase behavior, passive components such as resistors have set off a wave of price increases. The Taiwanese factory Chilixin’s Wangquan notified distributors and EMS customers to increase the price of resistors last week. More than 60%, which is the largest single increase in previous price increases, and the possibility of further increases will not be ruled out in the future.

Since the beginning of the year, passive components such as MLCCs and chip resistors have planned to increase prices many times. Previously, the price increase was mainly led by the leading Yageo Electronics, but it has now been extended to other players in the industry, and the price increase effect has already taken shape.

Passive components are crucial to modern technology

Passive components are mainly used in circuits to control signal transmission, gain signal size and other functions, and are indispensable for high-tech industries such as chips, communications, and panels.

Capacitors, inductors, and resistors are the three most important passive electronic components, accounting for 90% of the entire market. Their single cost and price are very low. Ordinary resistors may only cost a few cents or centimeters, but electronic products These three passive components are used in a huge amount, and there are hundreds of resistors on the motherboard and graphics card PCB.

The market size of passive components is growing rapidly, reaching US$24.24 billion in 2016, and is expected to reach US$32.89 billion in 2021, with a compound growth rate of 6.29%. With the gradual implementation of various avant-garde functions such as 5G, VR, AI, etc., the market space for passive components will grow exponentially in the future.

Compared with MLCC, the standardization of resistors is relatively high, and the entry threshold is relatively low, but the market share of resistors is highly concentrated in Taiwan. In addition, Japanese companies have faded out of large-scale resistors for non-vehicle use. Manufacturers do not produce resistors, so resistors are passive components that rely more on Taiwanese manufacturers than capacitors, and Taiwanese manufacturers have an absolute right to speak. In terms of production capacity, Yageo is the leader in Taiwan's passive components and the global leader in chip resistors. Its monthly production capacity has reached 90 billion pieces, and its global share is as high as 34%, far ahead of the second largest manufacturer KOA at 9%. The total production capacity of the fifth largest factory is less than that of Yageo.

Recently, the price of passive components has continued to rise

The price increase of passive components has gone through two major stages. Before the festival, the price stabilized and stabilized, and the demand rose; after the festival, it was mainly due to the impact of the epidemic, the decrease in supply caused by poor traffic and low operating rates, and the rush of downstream customers led to a sharp rise in prices.

Since the second half of last year, passive components have jumped from the bottom, and prices have been rising all the way. At the end of November last year, passive component manufacturer Dayi Technology took the lead in saying that it had completed price increases for its resistor products. Later, Yageo made a wave of fancy price increases by closing the trading system. Samsung Electro-Mechanics raised the price of MLCC for distributors in December last year, and locked in commonly used part numbers such as 104 and 105, with an increase of about 5-10%.

The post-holiday epidemic has made it difficult for manufacturers to start work, and downstream customers have a serious shortage of inventory, and the demand for replenishment has risen sharply. The leading manufacturer, Yageo Electronics, has raised the expected price increase of its products several times in a row, and the latest increase is between 70-80%.

According to the industry, the utilization rate of Yageo, the leader in resistors, was less than 40% in February, and the inventory of MLCC and chip resistors was less than 30 days. In addition, among the increase rate for EMS customers, many specifications have increased by 100%. Above, orders spilled over to relevant resistor factories such as Wangquan. From the perspective of other manufacturers, Huaxinke increased the price of the whole series of resistors by more than 60% for direct sales and distribution customers in Greater China last week, and there is a possibility of further increase in the future.

Tianfeng Securities believes that the epidemic has widened the gap between supply and demand in the industry, and the logic of price increases has been strengthened. It is closely watching the progress of the supply chain in Japan and South Korea. In addition, the demand for 5G/IOT/electric vehicle supply chain will increase in the future, which will boost the prosperity of passive components.