June 2019 Passive Electronic Component Monthly Market Research Report

JUNE MARKET UPDATE:

• June 2019 saw sharp declines in lead times and net new demand for high capacitance MLCC, the last vestibule of value in the supply chain.

• Tantalum capacitors and all the resistor products showed weakness across the board in June on a month-to-month basis

• Inventories at the electronic component distributors were very high amidst a global economic slowdown. Tantalum capacitors are a significant concern as their lead times threaten to go to new lows as channel inventories are believed to be substantial based upon lead time data.

• Meanwhile, raw material markets are in turmoil, with aluminum, copper and palladium each demonstrating volatile pricing based upon expected DEFECITS in SUPPLY in FY 2020. Tantalum ore prices have collapsed in June, returning close to their pre-market levels.

• Ruthenium prices are also weakening as are lead times for thick film chip resistors.

• Palladium prices on the other hand, a key benchmark for the global economy, is reaching new five year highs and impacting the costs to produce for specialty MLCC

• Meanwhile-Engineered raw material vendors in ceramics and metals report increased financing and technical activity as capex at the component level has reached down into the merchant materials segment through the massive passive component R&D spend and their high CGS for variable raw material costs. Sales of raw materials for 5G ceramics and high temperature automotive applications remain robust.