Capacitor manufacturers affected by the devastating March earthquake and tsunami in Japan were able to quickly bring their leadtimes down and their inventories up between the months of April and May, according to a recent report by Dennis M. Zogbi, the founder and chief executive officer of Paumanok Publications Inc. and Passive Component Industry Magazine. Is this a testament to the efficiency of the electronics supply chain, or is it something else?
Leadtimes for all types of capacitors spiked in April — ceramic capacitors in particular saw leadtimes stretch by a whopping 32 percent — but were approaching more normal levels by May. While it's true that capacitor demand soared as a direct result of the earthquake, that wasn't because factories reported damage, says Zogbi: It was panic buying by customers.
“One of the things that hasn't changed about the supply chain is human involvement,” said Zogbi in a phone interview. While the supply chain overall has improved significantly in terms of forecasting, visibility, and manufacturing efficiencies, all of those measures can be undone by a short-term run on the market. “The resiliency of the manufacturers is amazing. We predicted they would overcome this problem quickly, and they have.”
Here are some of the data points from Zogbi's recent analysis:
- Lead times increased in April 2011 for capacitors (all parts combined) to an average of 21.79 weeks (a month-to-month increase of 16.3%); but then relaxed downward to 19.34 weeks (a month-to-month decrease of 11.24%) by the end of May.
- Lead times for tantalum capacitors continued to return to normal levels and were not affected by the Japan events. Lead times for May 2011 declined by 11.8% on average in May 2011, compared to the prior month.
- Lead times for DC film capacitors decreased by only 1.7% in May 2011, after a 23% increase in April (due to Japan quake in late March). Global lead times for DC film capacitors remain at an elevated level of 29.25 weeks at the end of May. As we have noted, snubber capacitors remain the most difficult product to get, averaging about 40 weeks.
- Lead times for aluminum electrolytic capacitors decreased by 12.8% in May after a 29.7% decrease in April…
- Lead times for ceramic capacitors decreased in May 2011 by 17.9% after jumping up by a whopping 32% in April following the panic buying that occurred in the market in response to the earthquake in Japan. We note that MLCC of all case sizes and electrode types eased up May 2011 to 20.43 weeks, after spiking to 23.43 weeks in April 2011…
Whether the market sees a continuing return to normality “is hard to say,” says Zogbi. “Right now, it looks to me as if everyone who wanted to stock up did, so I have to wait another 30 days to see if [leadtimes] continue their downward trend. What will be even more fundamental to the market is the trend in the global economy.”
Zogbi's report is available at TTI MarketEye.