Capacity Expansion In the Global MLCC Industry: 2018-2019 Forecasts

LONDON, May 8, 2018 /PRNewswire/ -- In the first five months of 2018, MLCC shortages continued to plague the industry. This Paumanok study offers a compare and contrast of similar historical events in the capacitor markets over the past decades, and how in each instance, capex caused the markets to crumble…

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Capacity Expansion In The Global Ceramic Capacitor Industry: Calendar-Year 2018-2019

Between March 2017 and May 2018 the global market for multilayered ceramic chip capacitors saw increased lead times, price increases, shortages, new reference designs, and lost support in parts exposed to precious metals (UTH, HV, Hi-Q), as vendors of MLCC embraced the handset supply chain as the key market to follow and therefore, withdrew support from other end-use market segments. This created a shortage situation for MLCC based upon high capacitance technology limitations among vendors of the parts (only a few companies can manufacturer MLCC with capacitance values above 2.2 microfarad and the group of viable companies that can produce viable 100, 220, 330 or 470 microfarad MLCC are exceedingly small), and yet, as one financial analyst recently pointed out- this has happened before and in the past the upcycle seldom lasted more than 10 to 14 months, until real capacity expansion took hold of the market. It is also important to note that when the market begins its downturn, it usually happens quickly.

Why the 2018 Market Environment Resembles the 2007 UpCycle- so Will Capex:

One favorite pastime of the financial community is to compare the current shortage and upcycle in MLCC to other cycles, such as that which occurred in 1995, 2000, 2007, and 2011- of course, what I wish to note is that the distance between the 2011 and 2018 upcycle is the longest stretch of time between aberrations. The 2018 upcyle, in my opinion more closely resembles the upcycle in 2007 because that too was more critically associated with technology and specifically, the ability to increase stacking capacity for the high capacitance MLCC product lines. In 2018 the same situation exists and is only limited by the ability to manage such an advanced chemical process as ceramic + metal stacking to more than 1000 layers in a footprint no bigger than a grain of salt. But what was most apparent in 2007 as it is especially apparent today, is that the number of units being produced is proportional to the ability to stack, so an increasingly larger capital investment is required to produce an increasingly smaller number of parts. As a Chief Technology Officer of a major Japanese firm noted that as each company increases unit capacity at an increasingly higher capacitance value, yield ratios decrease, and as they enter into new capacitance value markets previously dominated by alternative dielectric technologies (tantalum and aluminum electrolytic), the overall MLCC yields for companies as while declines. Yields will be negatively impacted by the new investment in higher ceramic layer count production processes, which are plagued by low yields due primarily to the carrier tape separation from the thin ceramic dielectric layer during processing.

Key Segments of This Report Include
• Capacity Expansion Estimates For The Worldwide MLCC Industry: FY 2018 to FY 2019
• MLCC Capacity Expansion Comparison To Prior Years- A Comparison of Prior Upturns, Shortages and Capex In MLCC in 2000, 2007 and 2018; High Cap BME MLCC Technology Comparison Assessments from 2005, 2013 and 2018.
• A Look at Where The MLCC Technology Roadmap Requires Updating and Support

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