Tantalum capacitor demand falls 20%-30%
Suppliers report tantalum capacitor business will recover
Jim Carbone -- Purchasing, 10/28/2009 3:57:16 PM
See also
Tantalum capacitor supply could tighten
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The worldwide tantalum capacitor market will decline over
the next several years because of weak prices, sluggish demand and the greater
use of ceramic capacitors instead of tantalum. Suppliers say tantalum capacitor
demand this year has been down 20-30%, but some see business picking up in the
second half compared to the first.
Researcher DECISION, based in Paris, says the global market for tantalum capacitors will decline from $2.3 billion in 2008 to $2.1 billion by 2010, but then increase to $2.3 billion by 2012.
One reason revenue has declines is that prices have fallen. Purchasing's monthly surveys on purchasingdata.com show that the price index for tantalum capacitors has dropped from 70.32 in January 2009 to 64.17 in September. The base year for the index is 1999, when it was 100.
"We started to see some an uptick in demand in the second quarter in the notebook market," says David Valletta, executive vice-president for worldwide sales at Vishay Intertechnology, based in Malvern, Pa. "It became more evident in the third quarter," he says. "We see improving conditions in all applications."
In fact, demand has
picked up to the point where "we are wrestling with capacity issues," says Valletta. He says the
industry slashed production earlier in the year and suppliers are now "scrambling to bring it back up."
While demand decreased earlier in the year and prices declined, prices are now stabilizing, according to suppliers. "Demand was down so much no one had an appetite for reducing prices," says Valletta. "Buyers did not have volume to award so they weren't pushing too hard for price reductions. And suppliers were not willing to give up margin. It was a fight for survival at that point."
Tantalum capacitors' share of the capacitor market is eroding in part because more OEMs are designing ceramic capacitors into their products. Tantalums were traditionally used where high capacitance was needed because they provide higher capacitance values than ceramic caps. However, suppliers have been improving the capacitance values in ceramic capacitors as well.
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