Ceramic capacitor manufacturers including AVX, KEMET, Taiyo Yuden and TDK are all quoting extended lead times and managing product allocation.

By Gina Roos, editor-in-chief

The first rumblings of a components shortage were heard in late
2016. Scarcity became a sobering
reality in 2017 as rising demand spread across industry
sectors. But many component manufacturers questioned whether the uptick in
demand was real, leading to their reluctance to ramp up production capacity. Component
manufacturers weren’t ready to invest in factories, fearing a repeat of the
2000 industry downturn marked by ballooning inventories and rock-bottom
pricing. This contributed to further supply constraints.

What’s made the situation worse is that many suppliers have
decided to obsolete many of their parts at the same time, widening the supply
gap. Distributors report that many Japanese passive component manufacturers are
dropping their legacy commodity lines and shifting production over to newer
products, creating further sourcing challenges.

 Currently, many MLCCs and resistors are on allocation or are
quoting lead-times well into 2019. But the supply shortages are spread across
capacitor technologies including aluminum electrolytics, film, and tantalum, as
well as inductors and all types of resistors. 

Industry players don’t expect to see much relief until mid-2019
and some think shortages will last well into 2020. As part of AspenCore’s look
at the current state of IP&E component shortages, EPSNews has polled
leading passives suppliers AVX, KEMET, Murata, and Vishay to find how they are
meeting supply challenges and helping their customers stay up-and-running.

Ceramic capacitor manufacturers including AVX, KEMET, Taiyo Yuden
and TDK are all quoting extended lead times and managing product allocation. Murata Manufacturing, a leader in
ceramic capacitors, is no exception. Murata is reporting constrained supply for
smaller 0201 and 0402 case sizes; as well as some larger sizes for both low and
high capacitance/voltage (CV) values.

Electronics distributors, which work with many suppliers, are
quoting lead times between 20 weeks to 50 weeks, depending on the manufacturer
and characteristics of the ceramic parts, said Sean Sisson, vice president, North
America, for Rutronik Electronics.  “Larger case sizes are
more difficult to get and are at the higher lead-time range. But they are all
difficult to get.”

Murata and AVX lead times are running at 52 weeks or longer, said
Sisson. “Make no mistake about it, we’re in allocation.”

Some manufacturers are investing in new plants, but the challenge
is that it takes time to get those plants up and running, said Sisson.

Like suppliers, distributors are trying to help end customers. Sisson
recommends customers expand their approved vendors list (AVL). OEMs can survive
these shortages by having the flexibility to move from one manufacturer to
another on their AVL, he said.

Even stringent medical and automotive OEMs “are changing without
blinking because they know it will shut down their production lines. There is a
lot more flexibility with those verticals than I’ve ever seen,” Sisson added.

 

Three Tips to Ensure Supply

  • Expand you AVL
  • Consider a part with a different CV value such as a lower/higher
    capacitance or voltage
  • Evaluate different technologies such as tantalum or aluminum
    electrolytics

 

“As long as our customers are giving us the ability to move from
one supplier to another we’ve been pretty successful in fulfilling our customer
requirements,” Sisson said. “It’s all about inventory and our inventory is very
strong so we have the ability to help as long as they provide us with some
flexibility with their AVL.”

 

 

Source: Data compilation & analysis by
Stifel

 

All major manufacturers of multilayer ceramic chip capacitors
(MLCCs) are increasing production capacity. In addition to alleviating the
current shortage, manufacturers see tremendous demand projected for MLCCs. The
number of these devices per application — ranging from smart phones to
vehicles — are increasing, and there’s a rise of new applications related to
5G, the internet of things (IoT), and the electrification of vehicles.

Fearing a sudden oversupply, capacitor manufacturers are “cautiously”
adding production capacity. But many industry players don’t believe it’s enough.
Shortages will likely play out until 2020.

More parts move
to EOL or NRND

Adding to an already-squeezed supply chain, Murata reportedly is
placing many products on end-of-life (EOL) or not recommended for new designs
(NRND). Murata declined to comment on the matter. However,
distribution lead-time trends indicate that Murata is quoting long lead times
for MLCCs and has issued EOL notifications for many parts.

Future
Electronics, in its Q2 market conditions
report
, said lead times for Murata’s surface-mount
ceramic capacitors range between 20 to 38+ weeks and continue to increase. Murata
has issued EOL notifications for many of these parts, Future added.

Future
also reported lead times of 18 to 20 weeks for Murata’s leaded ceramic
capacitors, although many of the company’s leaded parts are EOL.  Future also noted a “controlled order entry
on a long list of parts, mostly for large parts.”

TTI
Inc. also lists several of Murata’s parts
as constrained
.
These include Murata’s GR and ZR series of ceramic capacitors for select values
in 0402, 0603, 0805 and 1206 and larger case sizes across dielectrics,
including R, X5R, X7R, X7S and X6S. Capacitance values are typically ≥1 µF with
voltages less than 100 V. In addition, several of Murata’s commercial and
automotive ceramic capacitors are in constrained supply including the GC, GRM
and ZR series for select values in case sizes from 0201 to 1825. Low and high
CV values in all dielectrics are effected.

 

Constrained
Murata Parts

GR* and ZR*
Series Monolithic Ceramic Capacitors:

  • Select values
    in 0402, 0603, 0805 and 1206 and up case sizes
  • R, X5R, X7R,
    X7S and X6S dielectrics
  • Capacitance
    values ≥1uF and voltage less than 100V

Commercial and
Automotive ceramic capacitors

  • GC*, GRM and ZR
    series
  • Select values
    in 0201 – 1825 case sizes
  • Low CV and High
    CV all dielectrics

Source: TTI Inc., July 2018

Fusion
Worldwide reported in
August

that “Murata is at the forefront of the manufacturers impacted” by the dramatic
increase in global demand for MLCCs, particularly in the telecommunications and
automotive markets. Fusion reported lead times of 12 to 36 weeks for Murata’s
standard MLCCs, and 24 to 52 weeks for Murata’s automotive series capacitors,
including GCM31/GCM21/GCM188/GCJ31/GCJ32.

“Bigger case sizes, such as 1210/1206/1812 for
105/106/107/226 capacitance values are facing critical shortages,” said Fusion.
“On top of that, Murata officially announced a number of part numbers updated
with status ‘Not Recommended for New Design’ (NRND), as well as cost increases
in line with market demand. The NRND parts are mainly case sizes above 0603,
capacitance below 104 (0.1 µF) and voltage within 100 V.”

Murata is expected to stop producing consumer MLCCs in 2020
to focus on automotive products, according to Fusion. The supplier plans to
expand production capacity at plants in Japan, Wuxi and the Philippines. But it
could take two to three years before it reaches full capability, said Fusion,
so no short-term relief is expected.

In June 2018, Fukui Murata
Manufacturing Co., Ltd., a manufacturing subsidiary of Murata Manufacturing
Co., Ltd. acquired a new site in Japan to expand MLCC production
capacity. Construction is expected to start in September 2018 and be completed
by the end of December 2019.

 

Sisson
expects component shortages will continue into 2020 and beyond, due to new
technologies using more MLCCs. “It’s not going to get better any time soon. The
end of 2020 is a conservative estimate,” he concluded.