At present, judging from market feedback, the tight supply of MLCC will continue until 2018. Many manufacturers are actively expanding production to cope with it. In the long run, the expansion of production not only meets the current demand, but also prepares for the expected future market growth. Recently, Murata executives were interviewed by International Electronics Business and predicted that the situation of MLCC supply exceeding demand may continue until 2018.
Kenhiro Goi, Marketing Director of Murata (China) Investment Co., Ltd., mentioned in an interview with International Electronics Business that the shortage of MLCC was a hot topic in the industry in 2017, and we predict that this trend will continue next year. This reflects an upward trend in the semiconductor and electronics industries, and the entire industry is preparing to hit the next peak. In the future, we will further strengthen our sales and customer technical support service system in China, and will continue to increase equipment investment and factory construction.
Based on the forecast of the development trend of the global semiconductor industry, in 2018, Murata will continue to consolidate the foundation of its communications market business, and look for new opportunities in the automotive electronics, energy conservation and control, medical and other markets, and explore new business models for the Internet of Things.
In 2018, driven by the trend of intelligence and electrification, the demand for automotive electronics will continue to grow. As ADAS systems become more popular, the demand for high-reliability automotive components and sensors is expected to further expand. In the traditional automotive market, Murata will continue to focus on automotive powertrain systems, active and passive safety systems, infotainment systems, etc. in 2018, and provide high-quality, high-reliability automotive components and sensors.
Public data shows that driven by demand, Murata's MLCC grew steadily in 2017, especially the growth of the automotive electronics market and smartphones. Murata believes that despite uncertainties, the trend of a strong global economy remains unchanged. In the electronics industry, demand for electronic components remains strong. While the growth of smartphones in China slows down, market demand will be released by the further functional complexity of smartphones and cars.
Indeed, stimulated by the upgrading of consumer electronics, the vigorous development of automotive electronics, and the continued expansion of the Internet of Things market, the passive component market has entered a boom cycle.
Fenghua Hi-Tech said recently that normal electronic components prices drop by 5%-10% each year, but MLCC price increases every 3-5 years. Since the second half of last year, Fenghua Hi-Tech has raised prices three times, with an overall increase of 5%-30%. The delivery cycle has changed from 20 days to 3-6 months. However, there is a certain gap between them and Japanese manufacturers in terms of equipment and materials.
Manufacturers led by Japanese companies are all heading into higher-end markets such as automotive. According to international electronic business information, TDK currently produces more than 10 billion MLCCs per month, most of which are automotive grade capacitors, and the remaining consumer grade capacitors are also mainly larger in size. However, there is no plan to expand MLCC production at present.
Domestic passive component agents said that the MLCC price increase gradually subsided at the end of the year, and the shortage situation continued until at least the first half of 2018. According to feedback from end customers, this year's shortage and price increase has had a certain impact on production, but there has been no suspension of production. This may reduce the output of finished products, and may replace the original materials with higher-specification devices, increasing costs. However, it is undeniable that the competitiveness of terminal products is challenged under supply fluctuations, and terminal manufacturers with weaker resistance to supply chain risks may face greater pressure.
At present, MLCC original factories are expanding production, indicating that the upstream is optimistic about the subsequent market demand, but the expansion of production will increase capital investment. In the short term, it will benefit from the market supply and demand. In the long run, only the continuous upgrading of low-end and mid-end products to high-end products can seek higher profits. Japanese manufacturers are turning to higher-end markets, and domestic manufacturers should also seize the boom cycle, guided by technology research and development and new markets, and upgrade terminal products to enable the next peak opportunity, which ultimately still needs to be achieved through component upgrades.
