Expect price increases for some integrated passive devices in '09
By Gina Roos -- Purchasing, 10/16/2008 2:00:00 AM
Pricing for standard passive arrays have been stable over the past year, but that may change in 2009 as contracts expire at the end of this year. No longer able to absorb rising materials and freight costs, passive component suppliers may increase prices or stop providing annual cost reductions.
"Pricing for everything has gone up," says Ian Doyle, product line manager for ESD protection at Bourns Electronics in Cork, Ireland. "Silicon, gold, fuel and freight costs are all going up and we still have customers who want lower pricing so we're stuck in the middle absorbing the cost difference."
"It will come to the stage where prices will have to increase or hold the line completely and not give any cost reductions to customers," Doyle adds. He doesn't expect any across the board price hikes, but rather selective increases for some products.
Currently, IPD tags run about 6–16¢, he says, but Chinese suppliers are offering more aggressive pricing at about 6–10¢. Prices will be stable for the rest of the year.
Prices for standard chip arrays don't erode as much as discrete ceramics. "It will remain stable going into next year," says Chris Reynolds, technical marketing manager for AVX Corp. in Myrtle Beach, S.C.
The good news for buyers is that leadtimes remain stable for standard chip arrays, about six to eight weeks. But buyers can expect longer leadtimes for electrostatic discharge (ESD) protection devices, due to capacity issues at packaging houses. Deliveries have stretched from about 8–10 weeks earlier this year to about 12–15 weeks, says Doyle.
To keep leadtimes down, passive suppliers such as Bourns are keeping buffer stock and trying to get distributors to hold more inventory.
While growth drivers for IPDs continue to be consumer electronics devices such as cell phones, PDAs, and music players, passive component suppliers also report demand from the avionics and home and security (surveillance) markets, where some of the higher reliability and specialty IPDs are used.
Most IPDs are ceramic-based arrays or networks that integrate resistors and capacitors in dual or quad array packages, although in some cases inductors are added. Silicon-based devices are typically ESD protection and electromagnetic interference (EMI) filtering parts that protect data ports, liquid crystal display (LCD) interfaces, and camera modules in cell phones and other portable device applications.
However, some passive makers are going into different directions with their IPD product strategies. For example, AVX has developed what it calls inter-digitated capacitors (IDCs) that consist of multiple terminations but with a common internal element. "It's still one capacitor but uses multiple terminations to achieve inductance canceling, and it looks like a capacitor array," says Reynolds. Low inductance is a big driver in high-speed application specific integrated circuits (ASICs) and field programmable gate arrays (FPGAs), he adds.
AVX has also transferred its RF capacitor process technology to a new plant in Myrtle Beach, where it builds 4- and 6-inch wafers. The process uses a glass dielectric with a single metalized layer that is evaporated onto a silicon substrate. With this process, AVX can make an entire passive network, or inductance capacitance resistance (LCR) circuit, with resistive layers, inductive coils and different dielectrics.
"Those are great for hybrid applications, which you can wirebond onto the hybrid instead of using lots of discrete components," says Reynolds. "So you have an entire passives array on a single chip. These LCR circuits can be used for low pass filters, center tap resistors or MOS caps," he says.
Dubbed passive micro components (PMC), these devices tend to be somewhat specialized with much lower volume production. Reynolds says they are used in avionics and medical applications or any specialized application that needs high precision and high reliability.
But it's not just the leading players that are getting involved in specialty passive arrays. For instance, Novacap of Valencia, Calif. introduced its Cap-Rack (CR) series of component arrays earlier this year that integrate a custom selection of individual ceramic components into a single surface-mount package. These arrays can include highly matched multilayer ceramic capacitors (MLCCs).
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