Electronic component market review - July 2017

Current Market Conditions

  • The global electronics market is up between 15% and 20% from this time last year. Specifically, there is growth within the automotive, sensor technology, wearables and ‘the internet of Things’
  • AFDEC (Association of Franchised Distributors of Electronic Components) have stated ‘manufacturing lead-times from suppliers are continuing to increase, as are material input prices’. To manage this, manufacturers are requesting forward orders and forecasts to manage pipeline stocks into distribution. This in turn is driving demand, leading to further shortages in supply. 

Key Capacity and lead-time issues

  • ST Microelectronics will close their order entry book for general-purpose microcontrollers (STM32-STM8 & legacy products) in Europe at the end of July 2017, for Q4 2017 and Q1 2018 delivery.
  • DRAM devices are on allocation, or have extended lead-times from 20 weeks, upwards. Micron is experiencing particular difficulty.
  • Vishay are seeing Fab constraints and the following manufacturers are seeing lead-times slip, and in some cases allocation on:
    • Taiwan Semiconductor; ST Microelectronics; Nexperia; Infineon; several Vishay products; Renesas; Texas Instruments; Intel/Altera due to Intel’s acquisition; Broadcom; Xilinx; Maxim; Micron; Diodes Incorporated; some AD lines; Microchip following the merger with Atmel; TE and ITT Cannon
  • There is a global shortage of Tantalite Ore, leading to shortages of Tantalum capacitors commonly used in the automotive sector. There is also a shortage in the following passive markets:
    • MLCC’s generally; Vishay; Samsung; general chip resistors; Epcos; TDK; Rohm, Taiyo Yuden; Kemet; AVX and Yageo.
  • Packaging houses are at full capacity, which is compounding the production issue. Lead-times are increasing partly due to fall out from competitor’s delivery issues.

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Pricing Uncertainty

  • Littelfuse passive prices look to be increasing over the next 3 months
  • Prices for DDRII and DDRIII modules have increased by approx. 40% - 50%
  • HC49 crystal prices are expected to go up 30% on 3 month trend, IQD notably
  • The market should expect a 10%+ increase on resonators and frequency control from AVX and Murata
  • Pricing on Epcos chokes is climbing
  • TE pricing may be unstable in the short term as they are about to issue a new price list to distributors
  • On 3rd July 2017, NXP increased the standard Euro cost price for all products by an average of 6%.
  • Wurth have placed a blanket price increase on each of their product ranges, equating to an average of 6.5%
  • Texas Instruments are in the middle of pulling design registered and supported pricing from all distributors. This will be complete by December 2017

Manufacturer mergers

  • Pericom have been purchased by Diodes Inc.
  • Fairchild have been acquired by ON Semi.

PCB Technology

  • Lead-times are stable and decreasing as material constraints ease. The demand for copper foil at the end of Q4 2016 has slowed, due to the Chinese Automotive policies. That, coupled with capacity for copper foil increasing, means that for most standard material availability has eased. This is not necessarily the case for more exotic materials - such as ‘Rogers’ - which is around a 4 week lead-time.
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Written by Daniella Baldock

Daniella is an experienced strategic sourcing specialist with over 12 years’ experience in the electrical and electronic manufacturing industry. Daniella’s core skills include negotiation, communication, supplier relationship management, and purchasing negotiation. Graduating from CIPS - The Chartered Institute in 2018, Daniella is a driven purchasing professional who plays a crucial role in driving ESCATEC's European sourcing strategy.