· global outbreak data are not optimistic
A new pandemic is unfolding across the globe. While the outbreak has eased in China, outbreaks have begun in other countries outside the country.
According to data, by 10:01 on March 6, 2020, a total of 17512 cases had been confirmed in foreign countries, including 6284 cases in South Korea, 3858 cases in Italy, 3513 cases in Iran, 1056 cases in Japan (360 cases in Japan, "diamond princess" 696 cases), and the remaining 2801 cases scattered in other countries. This shows that the global situation is not optimistic.
China, Japan and South Korea, which are at the center of the outbreak, are the global centers of semiconductor and electronics industries. If the supply chain of the three countries is affected, the whole electronics industry will be subject to fluctuations, which is starting to show signs 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.
Recently, "international electronic business information" for the electronic industry to do a survey on the resumption of work, the results show that: up to February 10, 38% of enterprises return to work rate is only 10%-20%, 20% of enterprises return to work rate is 20%-30%, 12% of enterprises return to work rate is 30%-50%, 23% of enterprises return to work rate is 50%-80%, only 7% of enterprises return to work rate is 80%-100%. Accordingly, it is speculated that the industry is expected to march, the electronics industry to return to work; The supply chain will not return to normal until April.
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.
Is the outbreak accelerating the rise in electronics prices?
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 disease in Japan and South Korea poses the 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.
· a new round of component price rise cycle may have arrived
Analysts tianfeng securities said that from the long term, the electronics industry shows a cyclical pattern. Among them, the product price cycle law of general components is obvious. In the price boom cycle of 2016-2017, the prices of Memory, LCD, Wafer, CCL, MLCC and LED chips all rose globally. During the period of 2018-2019, the prices of these chips entered a continuous downward cycle. The second half of 2019 May be the start of a new cycle of price reversals.
It also highlighted the widening of the gap between supply and demand in the medium and short term in terms of the impact on the mainland and the potential impact on industrial supply in Japan and South Korea. Compared with the situation without epidemic, the logic of price increase of electronic components is strengthened: the potential price increase increases, the time node of price increase is advanced, and the pace of price increase is accelerated. This means that without the outbreak, the price of electronic components would have risen less, at a later time and at a slower pace.
· the faster the outbreak ends, the less impact on prices
According to this model, compared with the previous cycle, this cycle starts and accelerates faster, and into 2021, the continuous upward speed of this cycle is slower. It will take until 2021 to surpass the previous round's early 2018 peak. To be sure, the forecast is closely related to the outbreak, and the faster it ends, the less impact it will have on prices.
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 to "international electronic business information", some models of passive components delivery time is 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.
· it is rumored that guoju will adjust the price of chip resistor and MLCC
It was not expected that during the Spring Festival in 2020, a new epidemic would break out across the country. The industry again came the news that passive components are about to rise.
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%. The company's contact person was not available for comment as of press day.
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.
· other original manufacturers have no aggressive price increase strategy for the time being
On February 26, 2020, fenghua high-tech released a notice that up to now, the company cannot confirm the authenticity of the price increase and its range of * * giant products, the company will pay close attention to the market demand changes, and integrate the actual development of the company and the healthy growth of the industrial chain demand, timely respond to market changes. According to media reports, fenghua high-tech insiders said that the company has no price adjustment, there is no significant increase in the plan.
In view of the recent rumors of rising prices of MLCC and resistance, a local passive component manufacturer told the international electronic business situation that, first, some MLCC enterprises in 2019 have a low long-term running rate, because of the overall output reduction, labor shortage, equipment adjustment and other reasons, it is difficult to quickly increase the running rate; Second, the epidemic directly affects the production and shipment of the manufacturers. After the enterprises resume production, they are still faced with short term supply shortage, labor, transportation, internal management and upstream cost increase.
"Of course, if the increase is too large, say more than 50 per cent, there could be speculation. It has to do with the development strategy of manufacturers, distributors and agents." He added.
It is understood that due to the impact of upstream and rising operating costs, the manufacturer has adjusted the price of some specifications of MLCC, and the overall price is relatively stable.
In fact, since the Japanese original factory exclusively for high-end MLCC, the release of the Volkswagen size model MLCC opportunity, let Taiwan, Korean, domestic original factory nibbled. "Taiwan manufacturers are relatively backward in the MLCC industry. They mainly produce large MLCC sizes, such as 0603. "However, Taiwanese manufacturers have a large percentage of resistance capacity and influence in the industry. They are large in size and have more room to operate."
Huaxinke said in a statement that the stock of MLCC and chip resistors has returned to the level of 2018, and some specifications are out of stock. As a whole, MLCC and resistance have not yet reached the state of supply. It is understood that up to February 25, huaxinke in China to resume work rate reached 70%.
Combined with huaxinke's statement, international electronic commerce believes that the company will not be too aggressive in March pricing strategy.
Please look at the price increase rationally
Notably, according to the plan, 2020 will be the first year of the official commercialization of 5G in China. Under the background of the large-scale application of 5G, the demand for all kinds of active and passive components will reach a new peak, which should be established on the premise of the perfect construction of 5G base station. The current situation is that the construction of 5G base stations in China started only in the second half of last year and is not expected to be formally used until the end of this year. The current 5G application is still in its infancy, and the demand for components for 5G terminal devices has not yet reached a period of rapid growth.
At the same time, each manufacturer is also increasing production capacity year by year, such as huaxinke plans to maintain annual production expansion of 15%-20% passive components, in recent years for MLCC annual production expansion of 15%, etc. Generally, in the climbing stage of demand growth, there will not be a sudden serious shortage of production capacity.
After taking into account the epidemic, it is more difficult to judge the price trend. What we can now predict is that the price rise is a high probability event for the year, and how much, and how fast, depends in large part on how quickly the outbreak ends and when the supply chain returns to normal. At least for now, the clear stance of the manufacturers did not have an aggressive pricing strategy.