The epidemic leads to an increase in the short-term supply-demand gap
The new crown epidemic is erupting on a large scale worldwide. In China, although the epidemic situation has been alleviated, the epidemic situation in other countries has begun to break out.
Data show that as of 10:01 on March 6, 2020, a total of 17,512 cases have been confirmed in overseas countries, including 6284 cases in South Korea, 3858 cases in Italy, 3513 cases in Iran, 1056 cases in Japan, and the remaining 2801 cases scattered in other countries. This shows that the global epidemic situation is not optimistic.
China, Japan, and South Korea, which are deeply trapped in the epidemic storm center, are major cities in the global semiconductor and electronics industries. Once the supply chains of the three countries are impacted, it will trigger fluctuations in the entire electronics industry. This is beginning to appear in China.
The supply chain will not return to normal until April
Specifically, the outbreak has widened the gap between supply and demand in the domestic electronics industry.
On the supply side, China is the world's manufacturing base, accounting for about half of global production capacity.At the time of the outbreak, China was in the middle of the Spring Festival travel rush. The Chinese government chose to take measures such as closing cities, restricting traffic and extending holidays, which will undoubtedly weaken the supply capacity of the industry in the short term.
On the demand side, the mainland market accounts for about 20% of the global market.During an outbreak, although aggregate demand for consumer end products declines, market supply declines more than demand declines.At the same time, the demand for infrared thermometer products is rapidly increasing, further widening the gap between the supply and demand of the electronics industry
The epidemic accelerates the rise of prices in the electronics industry?
In the context of a widening gap between supply and demand, the production capacity of the original factory has been greatly challenged due to the low return rate of employees, shortage of medical protection materials, logistics/transportation and policy impact, labor cost, office/factory rent pressure, loss of customer orders, shortage of upstream raw materials, tight cash flow and management difficulties.Therefore, the channel in the hands of the spot, become a scarce resource, the price rise is also the first in the spot market.An industry procurement told "international electronic business", the company's current purchase of spot resistance than the previous rise of about 50%, also a difficult to find goods
The outbreak of new coronavirus in Japan and South Korea poses a risk of imbalance between supply and demand
When the outbreak began, it was mainly in China.Affected by the low rework rate, the import channels from abroad have not been cut off although the supply and demand of domestic original factories are insufficient.According to the international electronic business information, in the early stage of the outbreak, the export of components was limited, but the import channels were normal.Now the outbreak has spread to countries such as Japan, the world's largest producer of electronic materials and passive components, and South Korea, the world's largest producer of Memory and FPD.It is foreseeable that once the outbreak is out of control, the global electronics industry will face the risk of imbalance between supply and demand, and downstream applications such as 5G terminals, IoT terminals and electric vehicles will also be affected.
Has the price increase started? Original factory gain attention
Taking passive components as an example, as early as the second half of 2019, the industry began to see MLCC, inductance, resistance price rise news.Industry insiders said that the original factory for some specifications of the device, issued a price notice letter.Industry procurement also said that some models of passive components delivery time elongated.However, the prevailing view at the time was that the market, after a big rally, would not move quickly into the next price rise cycle
Yageo is rumored to adjust chip resistors and MLCC prices
Taiwan media reported that due to the epidemic, the global supply gap of passive components continues to widen, China giant will raise the price of chip resistors by 7-80% in March, MLCC products will also increase by 50%.
It is reported that in the chip resistance, the monthly production capacity of about 120 billion, the global market share of up to 34%;In terms of medium and low end MLCC, China giant accounts for about 30% of the global market.The suzhou plant accounts for about 70 per cent of its capacity.This shows that China giant suzhou factory has the ability to influence the supply and quotation of resistors and capacitors worldwide.If China's huge price increase is true, it will likely lead other similar manufacturers to raise prices, which will eventually increase the cost of downstream end products.
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