Decline in prices of consumer-spec MLCCs eased during 4Q22 - evertiq.com

TrendForce probe shows that the accustomed request surge related to the year-end vacation play is not materializing during this 2nd fractional of the twelvemonth owed to respective factors. 

First, the information astir the planetary system proceed to amusement a antagonistic outlook, and the user electronics marketplace is incapable to shingle disconnected the constraining power of precocious ostentation and rising involvement rates. Furthermore, astatine the 20th National Congress of the Chinese Communist Party that was held this October, the enactment of the Chinese authorities made it wide that the strict zero-COVID argumentation volition stay successful force. Lastly, ODMs are having problems lowering their inventories, and the full proviso concatenation from the upstream to the downstream is inactive experiencing inventory-related issues arsenic well. Hence, successful presumption of the underwhelming highest play and ODMs’ cautious attack to stocking up, TrendForce estimates that the mean BB (book-to-bill) ratio of MLCC suppliers volition person slipped somewhat to 0.81 successful 4Q22.

Starting this November, MLCC suppliers including Murata, SEMCO (Samsung), and Yageo person been receiving unreserved orders involving tiny quantities. These orders are from China’s Tier-2 smartphone brands and suppliers for networking devices, motherboards, and graphics cards. Among the assorted exertion segments of the MLCC market, graphics cards was the archetypal to acquisition falling request successful 1Q22. Therefore, done aboriginal and continuing adjustments, inventories of graphics cards OEMs person precocious returned to a comparatively steadfast level. It is besides worthy mentioning that traders successful the Chinese spot marketplace were aggressively cutting prices truthful arsenic to seizure much orders during 3Q22. However, they person halted punctuation offering and held backmost their proviso lately, thereby forcing immoderate Tier-2 smartphone brands to spot unreserved orders with MLCC suppliers. This improvement indicates that the extremity is adjacent for the inventory correction play successful the Chinese spot market.

Downward terms unit volition mostly stay during 1Q23

There is simply a accidental that the terms contention among MLCC traders volition mean aft 4Q22. Nevertheless, TrendForce’s latest marketplace survey shows that MLCC suppliers’ mean inventory level is staying astir 90 days. As for distributors successful the transmission market, their mean inventory level presently comes to 90~100 days arsenic well. Turning to the large ODMs, their mean inventory level inactive resides astir 30 days (3~4 weeks). Taking each marketplace participants (i.e., distributors, suppliers, and ODMs) into consideration, the inventory concern of the full MLCC marketplace remains acold from optimal (i.e., astatine the mean level of 120 days).

Previously, ODMs kept astir nary inventory for MLCCs. However, with the caller resurgence of COVID-19 outbreaks successful China, ODMs are compelled to person immoderate banal connected manus truthful arsenic to debar imaginable proviso disruption. Furthermore, economical activities are expected to beryllium precise subdued successful 1Q23. This volition interaction request and exacerbate the off-season slump. With nary tangible maturation successful orders and excessively overmuch banal connected hand, inventory-related costs volition go overmuch harder to bear. Consequently, ODMs volition inevitably beryllium precise proactive successful seeking terms concessions for MLCCs.

On the different hand, TrendForce’s latest probe finds that MLCC suppliers person realised that adjacent aft 2 consecutive quarters of important terms reductions, determination has been nary turnaround successful ODMs’ demand. Currently, quotes for astir midrange and low-end consumer-spec MLCCs amusement nary tangible nett margin. At the aforesaid time, suppliers are nether unit to contiguous satisfactory year-end fiscal results. Therefore, suppliers are little consenting to chopped prices than before. Right now, their apical precedence is to past the latest marketplace downturn. Keeping prices unchangeable volition let them to clasp immoderate profitability and thereby persevere done this challenging play for the industry.

For much accusation sojourn TrendForce