Recently, according to Taiwan media reports, given that the Samsung Group's , the world's second largest passive component layered ceramic capacitor (MLCC), overseas factories of Samsung Motor , have resumed work one after another, and the production capacity is gradually being launched, and the price is 1 to 50% lower than that of Taiwan factories such as Guoju. In addition, it is not ruled out that there is a possibility of lowering prices to grab the market again. It is said that Guoju has reduced the price by 20% to ensure orders, which is equivalent to half of the price increase in the first half of the year.
learned from the Huaqiangbei spot market that due to the impact of the epidemic, since May, the weak market demand caused by demand has begun to appear, the market trend is becoming cold, and the wave of MLCC price reduction has begun. At present, most MLCC models in the spot market have fallen prices but have not fallen to the pre-rising level reported by Taiwanese media, and a small number of models are still in a state of rising.
MLCC price reduction "causes and consequences"
Source: Economic Daily
The above pictures can roughly reflect the causes and consequences of this round of price reduction rumors:
Reason: Japan and South Korea's production capacity rose, and the two major MLCC factories in the world, Murata and Samsung Electric accounted for 15% and 40% of the proportion of Philippines each. Previously, due to the Philippines' epidemic prevention lockdown, the two major factories were unable to operate, and the supply was tight.
Results: After the Philippines' production capacity has recovered, the quotation is significantly lower than that of Taiwanese factories such as Guoju. The supply chain points out that Samsung Electric currently offers MLCC specifications such as 0402, 0603, and 0805, ranging from 1 to 50% lower than Guoju and Huaxinke.
Supply Chain revealed that the average increase in MLCC quotation in the first half of this year reached 30% to 50%. In order to make the price competitive with Samsung Motors and ensure that orders are worry-free, Guoju took the initiative to reduce the price by about 20% to the insurance policy, which is equivalent to giving up nearly half of the increase in the first half of the year. Huaxinke's first-quarter product quotation rose slightly lower than that of Guoji, and the impact was relatively small.
Regarding the rumors of Guoju’s “guaranteed policy price reduction”, Guoju’s answer is consistent with the previous reply rumored to increase the price on the Internet: the price of is subject to market supply and demand .
Huaxinke, which is known as the "two heroes" of passive components in Taiwan, China, and Guoju, said that during this period, Japanese and Korean suppliers adopted the same approach as Huaxinke to stabilize the supply of prices and provide appropriate prices, but under capacity restrictions, no phenomenon of grabbing orders at low prices was found; as for the market prosperity, if the epidemic worsens, they will remain cautiously optimistic in the second half of the year.
It is worth noting that this price cut is also the first rumor of a price cut since it stopped falling and rebounded in the fourth quarter of last year.
The fluctuating spot market
The following mainly sorts out the changes in this round of price increase and price reduction trend, which can be divided into three stages: priceless, priceless, and priceless. (Note: The "price" and "market" here are relative, and there is a transition period in each stage of change)
Priceless and market-free (September-November 2019) : The market price of MLCC has reached a low market level, and the market stockpiling is heard, but demand has not shown a lot.
Market information:
- At the end of September 2019, Huaxinke released the news that it stopped accepting orders, and some people in the market began to stock up, which is also considered the origin of this price increase wave. The Guojiu has not spoken out for the next two months, but it is reported from time to time that the number of deposit days has decreased.
- At the end of November 2019, the price increase was reported, and the price increase was only targeted at agents and not OEM manufacturers.
has price and market (December - early March 2020) : The "price" here is relatively speaking. The price of MLCC increased slightly from the second half of the fourth quarter to the early stage of the epidemic (end of February).
Market information:
- In January 2020, Guoju's distributor Guoyi issued a price increase notice;
- Korean company Samsung Electric announced a MLCC price increase of 10-15% on January 2;
- Fenghua Hi-Tech and Sanhuan Group also raised the price of MLCC in early January this year, with an amplitude of about 15%;
- Guoju's MLCC inventory level in the fourth quarter of 2019 dropped to below 70 days, and the healthy inventory level should be 90-120 days. Local companies Fenghua Hi-Tech and Sanhuan Group also raised the price of MLCC in early January this year, with an increase of about 15%. When mobile phone manufacturers were able to pull goods at the end of the year, MLCC's bottoming out before the Spring Festival has become obvious.
At the demand level, terminal manufacturers mainly focus on stocking.The main driving force from December to before the Spring Festival is that the downstream whole machine industry shows signs of recovery. Orders of MLCC companies have increased since the fourth quarter of 2019, inventory is tight, and capacity utilization exceeds the load; after the resumption of work on February 10, some companies in the market continue to pull goods and may subsequently increase prices.
This wave of market reached its peak in early March, and "capacitor price increases by more than twice, resistor price increases by more than twice, and one price a day can't buy goods" became the norm.
has price but no market (early March -) :
In the early days, due to the epidemic, domestic factories were unilaterally affected, and domestic factories were difficult to recruit people. unilaterally, order cutting and extended receipts and goods were interleaved. The market has been in a slight change. After April, the problem of resumption of work was basically solved, but new demand has not increased, but at this stage, major passive component manufacturers seem to have no intention of relaxing prices. "The price of the contract of China giant has increased by at least 50%, and Huaxinke and Dayi resistors have increased by 20%" has been reported.
learned from the Huaqiangbei spot market that due to weak market demand, most MLCC prices have begun to drop since May, and have not yet fallen to the pre-rise level, and a few models have risen. Taking 0805 104 as an example, the price before the rise was 0.015 per piece, and the highest this year was 0.043-0.045, and the current price was 0.018 to 0.020.
price reduction is unstoppable weak demand
MLCC is the most common general electronic component product. The sales model of general-purpose products is generally divided into two types:
- , one is the direct sales type, that is, the manufacturer directly sells the products to end users, mainly for larger electronic machine companies; generally speaking, the prices given to this type of company by the original manufacturer are relatively stable to maintain stable customer relationships. The other type of
- is the distribution type, that is, the manufacturer sells the products to agents, and the agents distribute them to traders and then to terminal machine companies. This model ultimately flows to small and medium-sized terminals mainly for small and medium-sized complete machine companies. It is estimated that 15%-30% of the global MLCC is sold by traders to various downstream electronic machine companies. This part of has serious price fluctuations and is also an important trigger factor affecting market sentiment.
At present, although the domestic epidemic has tended to ease, the overall demand is still unclear. From the perspective of Huaqiangbei spot market, many traders have reported that since May, new demand has become less and less, and the performance has been only 1/2 or 1/3 of that in April, which is basically supported by large customers. In addition to May and June themselves, the impact of weak demand accounts for a larger proportion.
Regarding the market prosperity, Guoju seems to have predicted that whether it is the previous statement at the shareholders' meeting that "the prosperity in the third quarter is unclear", emphasizing that the growth momentum after the merger of the fund can still be maintained, or when the acquisition of Jimei was completed, "the demand is relatively unaffected by the prosperity", or the stable returns of long-term contract customers signed in May earlier, it can indirectly indicate Guoju's concerns about the rebound in the market prosperity. In this way, it seems that MLCC bargaining 20% seems to be traceable.
Judging from the last round of price increase in MLCC, under the fierce operation of Guocao Brother, the MLCC price increase in MLCC triggered, "The original factory rose by 10%, the spot market rose by 10 times" became the norm. Some younger brothers followed the elder brother and even drank soup and realized their financial freedom.
Now, Guoji has changed the tradition of only publishing "price increase" news, and for the first time, the news of "bargaining 20%" has been circulated. There may be only one truth: terminal demand is really weak.
When the elder brother is not focused on taking the lead in making money, is there any solution for my younger brother?
