SAN FRANCISCO—Lead times for aluminum, ceramic and tantalum capacitors could remain abnormally long through the fourth quarter of this year and perhaps beyond, according to market research firm iSuppli Corp.
Average lead times for aluminum capacitors remain in the 18-week range, far beyond the normal 10 to 12 week range, according to iSuppli (El Segundo, Calif.).
"Despite their tiny size and minuscule price—commonly a fraction of a cent—capacitors serve as a bellwether for demand trends in technology," said Rick Pierson, senior analyst at iSuppli, in a statement. "This is because capacitors are extensively used in nearly all electronic products. For example, Apple Inc.'s iPad contains 702 capacitors, while the iPhone 4 has 469."
Making matters worse is that aluminum foil, used as the conductor in capacitors, is in short supply, adding fuel to the fire of increased prices, iSuppli said.
According to iSuppli electronic market forecasts, ceramic capacitors are also averaging 18-week lead times, with some products being put on allocation in view of sustained consumer demand. The hardest-hit ceramic capacitors include high-capacitance components and high-voltage parts, which will take the longest to recover, as they require more capacity to build because of their longer cycle times, iSuppli said.
But unlike tantalum capacitors, a diverse supply base exists for ceramic capacitors, and iSuppli said it is seeing manufacturers commit capital in order to expand their capabilities due to high demand. As a result of the increased capacity, combined with a slowing of consumer demand for ceramic capacitors, the segment should come back into balance by late fourth quarter, the firm predicted.
No real short-term solution exists for tantalum capacity supply issues, and manufacturers have been conservative in adding capacity given the mature nature of the products, iSuppli said. Lead times for these parts have been stretched to 20 weeks and beyond, the firm said.
The recent downturn prompted manufacturers of raw materials for tantalum capacitors to scale back significantly, iSuppli said. Manufacturers won’t invest in further capacity without long-term commitments from capacitor manufacturers, iSuppli's supply chain research shows.
Such problems will continue until the end of the year, iSuppli expects, with some improvements occurring in the first quarter of 2011 as raw material issues get sorted out. Depending on the mix of product and the strategic importance of the OEM, comparatively high pricing on these commodity parts can be expected to continue across the board, the firm said. Pricing should stabilize in the first quarter of 2011 but will remain at higher levels in the foreseeable future, iSuppli said.