Suppliers to increase capacitor production
Buyers can expect relatively stable prices for capacitors despite rising materials price.
By Gina Roos -- Purchasing, 6/12/2008 2:00:00 AM
Prices for commodity multilayer ceramic capacitors (MLCCs) are expected to be flat or down by about 2% in 2008 and tags will remain stable for high-capacitance and high-voltage parts. Leadtimes will also remain stable at four to six weeks, though deliveries may stretch out by a few weeks for some specialty devices.
Suppliers say rising costs of materials (including palladium, silver and copper) and transportation costs, as well as currency exchange rates, will contribute to more stable pricing. Dollar weakness against the yen will be a factor in terms of holding price levels stable, says John Denslinger, executive vice president sales and marketing for Murata Electronics North America in Smyrna, Ga. "It contributes about 7-8% in cost increases on a conversion basis."
Raw material cost is having an effect on MLCC production costs where precious materials such as palladium and silver are used, says David Valletta, senior vice president of global strategic sales for Vishay Intertechnology in Malvern, Pa.
However, because Vishay primarily focuses on specialty devices, including those with higher capacitance and voltage, Valletta doesn't expect pricing to erode. "We expect pricing to be flat to slightly up," he says.
Suppliers expect the market to grow about 5-12% this year. Demand for MLCCs continues to grow as content increases in a number of applications and as higher capacitance and higher voltage parts steal market share away from tantalum and aluminum electrolytic capacitors.
"What's different now from 2000 is that 2000 was driven by output of units and more recently the capacitor market is driven by content per unit," says Denslinger.
The bill-of-materials (BOM) content has increased dramatically in new products because of feature enhancements, says Denslinger. For example, global demand by number of units has increased considerably for flat panel displays (FPDs). "Flat panel displays are a hog when it comes to MLCCs," he says.
Murata estimates that MLCC content for FPDs has jumped from 350 units up to 1,100 to 1,700 pieces. Similarly, MLCC content has nearly doubled from 230 to about 400 for mobile phones—all due to the convergence of voice, video, navigation, MP3 and camera features.
To meet growing demand, Murata has continued to increase production capacity over the past few years. The general supply base has been reluctant to invest after 2000 and is looking for the market to confirm the uptick before they invest, Denslinger says. "If we were going to gain market share we had to have capacity in place before that could take place. We're probably a little ahead; at the macro level all the subprime issues have everyone worried. We've seen some sluggishness over the past few months but not in North America."
Hand in hand with increased content for consumer devices, including mobile phones, MP3 players, notebook computers and gaming devices, is a demand for smaller chip caps.
Currently, the most popular case size is the 0402.
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