Since the second half of 2016, as the significant increase in packaging and winding metal materials (copper, tin, iron cap), component sticks and packaging cartons, this squeezes the profit margins of passive components manufacturers. Copper settlement price is increased from 4511 US dollars/ton all the way up to 5601 US dollars/ton, while the tin settlement price from the beginning of 2016 has risen as high as 36.67%.

Passive components price increases are based on the international commodity prices raise which transfers pressure to the downstream, while the Japanese manufacturers withdraw the merger with component industry and cause by the tightening of the supply side, boosting further push the passive component prices.



(1) passive components is an ancient industry, from the recent industry's leading growth rate, market is steady, but in industry structure, the market is changing, the passive components manufacturers use acquisition to consolidate the competitive position, the result is enhancing the concentration of resistance market. Thus, the oligopoly pattern creates a relatively stable supply of passive components.
(2) the most direct cause of tight supply is the Japanese manufacturers quit from the low-end market, while the Korean Samsung lead to a substantial extension of delivery to strengthen the quality control. Due to the decline in smart phone growth, and automotive, Internet of things and other new markets have developed rapidly, so the Japanese leading manufacturers will transfer attention to new markets, and gradually withdraw, weaken the original low-end.
From the demand side, short and medium long continue to be good. In short-term, iPhone8 stock supply in the Q2 is required at least 100 million capacitors, Japan Murata, Samsung, Kyocera and other Japanese and Korean manufacturers ensuring the supply will make production further shortage. In the long term, 5G market is a big increase. With the increase in the frequency band, the demand of phone on the inductor and capacitor demand will be increased. Considering the new needs on the car, industrial and others, the future resistance and other passive components demand will have steady growth.

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