Yageo has seen its supply of MLCCs fall short of demand, which will likely persist through 2019, according to company chairman Pierre Chen.
Entry-level and mid-range MLCC prices still have room for further growth, said Chen, adding that the bullish price outlook is to reflect the short-term supply and demand dynamics.
Yageo and its fellow Taiwan-based rivals specialize in entry-level and mid-range MLCCs, while Japan- and Korea-based MLCC firms focus more on high-capacity and automotive products, Chen indicated. It is unlikely for those Japan- and Korea-based players to go back to conventional products once they decide to target the high-end market segment, Chen believes.
China-based MLCC suppliers are only capable of making low-end devices which are still less favorable than their Taiwan-based counterparts when it comes to technology and quality assurance, Chen said. China-based players collectively holding a less than 6% share of the global passive component market also have little influence on the supply chain even if they expand production capacity by 50%, Chen noted.
The global supply of conventional MLCCs will remain tight through 2019, Chen believes.
Meanwhile, delivery lead times for MLCC production equipment have been extended to as long as 14-18 months, according to Chen.
Yageo reported net profits of NT$6.66 billion on consolidated revenues of NT$32.26 billion for 2017. Both hit record-high levels. Market watchers expect Yageo to enjoy another year of record sales in 2018.