Fusion Worldwide Greensheet

January 24, 2019



Manufacturers may be holding back to see if market growth mimics FY18, where Q3/4 demand was higher than Q1/2. Political considerations, chiefly Brexit and the US-China trade war, play a large part in this wait-and-see approach. If the market receives more negative forecasts, and predicts that larger consumers of small case sizes will face reduced growth, we may see immediate investments in large case sizes. But as it stands, Murata and most major manufacturers are moving out of the large case size space – with no one stepping up to fill the void; this could prove to be problematic in the first half of 2019, regardless of how demand materializes.

As mentioned in our previous Greensheet, Murata’s current approach is to shift production to small case size MLCCs (0402 and smaller), and has announced EOL statuses across the board for large case sizes. Should demand for large case sizes persist, especially in booming sectors such as automotive, there can only be severe consequences to an already dire situation. Furthermore, Murata is doubling down on their focus by increasing standard costs in EU/USA regions beginning January 1st. We’ve already seen their automotive series (GCM) increase pricing since January 1st by up to 300%, which has driven customers to the open market to capitalize on inventory held at Q4 2018 cost. Distributors report that Murata plans to maintain higher pricing until at least Q3 2019.

Samsung is set to follow suit, deeming small case sizes to be more cost effective by 60%, whereas large case sizes are simply unprofitable. In a bid to deter customers from placing large case size orders, Samsung has halted orders on certain series, increased pricing by 3-5% for active items, and is not confirming lead times for future orders. Furthermore, they are reducing their product offering to 96 separate MPNs within the automotive space (specifically 0402 and 0201), in a bid to increase production for their highest volume parts. Even still, distributors report significant constraints and a 200% price increase in Q1 from their China and Philippines plants; Korea pricing has not yet increased, but is expected to do so in Q2.

Taiyo Yuden will also adhere to market trends and shift their focus to small case size MLCCs. There will be a 4% increase in production for case sizes 0603 and above, while the increment of production capacity for small case sizes (e.g. 0402 and 0201) will be around 16%. A majority of their automotive demand is for large case sizes 0603 and above, therefore it is predicted that automotive supply will continue to be highly constrained throughout 2019. In addition, Taiyo Yuden announced a strong Q1 focus on high capacitance and high reliability automotive products (MK / MF series), which will further reduce any chance of bolstering production capacity for more general devices.

While other manufactures seem to be cooling off production on certain case sizes, AVX, on the other hand, plans to extend production for current ranges. This will by no means fill the void, but will offer some relief as they plan to continue supporting their current portfolio of large case sizes. With major emphasis on investment in the past couple of years, their new Singapore plant will push large case sizes, especially 0603 and 1206, to the forefront; strong support is expected throughout 2019.

Kemet is shifting their focus to tantalum capacitors entirely, no longer accepting MLCC orders due to insufficient capacity. We’ve yet to hear any insight regarding Q1 pricing, but Kemet price adjustments are usually not well-announced, and distributors will only be informed of any changes at the point of renewing their annual contracts. Additionally, Kemet is scaling back production of automotive-grade capacitors, and moving their Sweden facility to Portugal in an attempt to reduce operating costs. An announcement released by the company’s CEO, William Lowe, stated: “We are planning to streamline our manufacturing operations for axial electrolytic capacitors with this planned relocation, thereby allowing us to increase flexibility, capabilities, and competitiveness in the marketplace. This planned consolidation of the manufacturing process enables us to not only reduce operating costs, but also improve our ability to meet our customers' changing demands.” This cost-cutting initiative comes with an industry-wide shift in approach to the automotive space. It’s unclear how this will affect Kemet’s production and supply short-term, but is evidence that shortages and shifting demand are providing components manufacturers increased incentives to improve flexibility within their production.


Resistor supply constraints remain critical. Distributors in North America have begun releasing larger quantities with fewer restrictions in Q1, but pricing continues to increase. We have seen small relief on small case sizes, in particular from KOA, as their status for the time being is no longer considered critical. However, large case sizes (0805 and 1206) remain at the most critical level we’ve seen thus far with lead times sitting at 99+ weeks. Distributors do not expect any relief in the near future, nor has a recovery date been announced by KOA.

Compared to KOA, Yageo large case size resistor lead times are relatively shorter; however, they are still critical. While distributors are beginning to receive larger allocations – which should lead to better pricing and eventually better support for customers – lead times will not be decreasing anytime soon. For now, no further price increases for Yageo are forecasted for Q1/2 2019.

Vishay has not added much production capacity compared to other manufacturers, thus supply is still very limited, especially for thin-film resistors. Automotive and commercial-grade customers alike are not seeing much-needed improvements in delivery, and persistent demand from numerous global markets has only proliferated an already-urgent situation. Lead times for small case sizes persist at 50+ weeks, with some items extending past the 60 week mark. Unlike capacitors, which enjoy a plethora of alternate options in the way of upgrades, counterparts and manufacturers, resistors tend to be more application-specific, limiting creative solutions and constraining customers to exact MPNs. Most users are actively pursuing recourse in the open market with weekly spot buys, in a bid to prevent all-too-frequent line-down situations.

Transistors and Diodes:

According to distributors in North America, MOSFET deliveries that were expected at the beginning of 2019 have been pushed back with updated lead times of 42+ weeks. Wafer shortage is the main cause of these disruptions across all brands, and this scenario is expected to persist until the end of Q3. Many orders are left open-ended with no firm delivery dates. This coincides with an increase in short-term demand, further complicating the situation. Long-term supply and demand for MOSFETs is expected to increase steadily over the next year, but short-term supply has suffered from an overarching emphasis on quelling the passive components shortage. As a whole, production of automotive-grade parts, including MOSFETs, is expected to grow. As for current demand, it is unclear how much longer this seemingly temporary surge will continue, but in the interim, prices on rapidly depleting stock will remain above average.

Infineon has spent most of the past year proactively trying to resolve supply issues. Factory expansions and new plants are currently planned; however, nothing will be operational within the next year. Consequently, supply constraints are still prominent for most Infineon series. Lead times for ‘BSC’ series currently sit around 65 weeks and the ‘IPD’ series lead time has jumped to 99+ weeks. While smaller batches of stock can be supplied sporadically through distribution, lead times will only increase as demand in growing sectors simply dwarfs production capacity.

In last month’s Greensheet, we mentioned that OnSemi’s focus is to increase their market share in the automotive, industrial and cloud power end markets. They are also focusing more on IGBT after merging with Fairchild, with an aggressive focus on claiming market share from Infineon directly. As such, most of their high-runners will be direct crosses to Infineon series. They have successfully launched some new parts to larger end customers during the end of December/early January, and are pushing more customers to accept OnSemi alternates for future use. Helping their cause is relatively shorter lead times compared to Infineon – though some MPNs do remain critical; their popular FDC/FDN and NSD/NTZD series are sitting on a 42 week lead time currently.

Nexperia announced EOL statuses for various diodes and transistors in mid-year 2018, with last time delivery being June 2020. Distributors report the driving factor to be changes in raw materials, functional updating, cost-down initiatives, and a consolidation of packages. It is rumored that this might lead to shortages for affected part numbers, as direct replacements may not be available – especially for their BUK, PMK & PSMN series. These series are largely used for electro-balanced scooters which were very hot in the past two years, and with NXP focusing on high dollar/profit value of their MCU and 74xxx series, production capacity is much lower for PSMN series. We have consequently seen significant shortage issues as a result.

Vishay aims to expand production of diodes and transistors by 28% for automotive and 26% for industrial. They have highlighted new products such as gallium nitrite MOSFETs, multi-spectral optical sensors, and diodes for 48 V electrical and hybrid vehicles. This will demonstrate that they are innovative across a variety of market segments which they will be focusing on this year – from consumer, IoT, home automation, automotive, industrial and 5G. They are also expected to pull production capacity away from their low voltage (600V) DFL-series. Demand is slowing down, as these were made for solar panels, and due to new technologies the conversion efficiencies are reaching 37%, which is much higher than the previously used thin film solar cells. Customers with ongoing demand will certainly feel the pinch as lead times for low voltage diodes extend to 202 weeks. This is not due to a market shortage, and is rather Vishay’s method of phasing out demand.


An official notice had been sent by Lattice in Q4 2018, informing distributors and end customers of planned increases in pricing, citing declining demand on old series, changes in operational and regulatory landscape, and an increase in material costs. All ongoing contract prices are no longer valid after December 28, 2018, and moving forward will be subject to Lattice’s final confirmation and revision. Customers should expect price increase in the range of 15-20% across the board.


The server market has started to see some recovery in the supply of Xeons, namely the Purley series. Intel has been struggling for the past few quarters, but we are beginning to see healthier supply and shorter lead times across the majority of 4xxx, 6xxx, and 8xxx series. Perhaps this has to do with the fact that Q1 is historically the slowest quarter and Intel is able to manage supply and demand better. Many end users were offered significant discounts in the last week of the year to take on large volumes and that has jammed up the flow of product in the open market in the early part of 2019. Still, certain models like the 4110 and 4114 are still seeing some supply gaps despite these strategic purchases. Intel is apparently swimming in Broadwell supply as we’ve heard reports of some steep discounts, upwards of 60%, being bandied about to direct customers. We are starting to see tighter allocation on the workstation-specific E3 series Xeons and pricing from Intel has started to increase. The successor E-2xxx Coffee Lake launched in Q3 2018 and already a number of customers have come to us looking for support. With Chinese New Year just around the corner, we will begin to see the market buying stock to cover over the festive period in fear of supply disruption. As past years have shown, this will likely result in a temporary heating up of the market price in the short-term until the Chinese New Year period is over and the dust begins to settle.

Mobile pricing is still at a premium and material shortages will be tight throughout 2019, with not much improvement from Q4. Biggest concerns are Kaby Lake Ultrabook processors. Customers seeing gaps for other families (Skylake/Kaby Lake R /Coffee Lake) but are still not at critical stages yet. There’s been no sign of any improvement on low value Atom/Celeron CPUs and it continues to pose an issue for customers. We are hearing the supply on Apollo Lake and Gemini Lake will resume back to normal in July. AMD debuted its 7-nanometer CPU and Intel was finally able to debut their 10-namometer products at CES in Las Vegas. AMD is anticipating gaining more market share in 2019 on CPUs, with the advantage being more efficiency with more computing power. OEMs are already moving to AMD for entry-level Chromebooks knowing that Intel’s supply won’t catch up anytime soon.

It is no secret that the desktop segment is lower priority for Intel, which is likely why the bulk of market activity has taken place there. Intel’s supply for Coffee Lakes is poorest among the three current mainstream generations (Skylake/Kaby Lake/Coffee Lake). The first two weeks of the year were particularly active, especially in the Chinese market, and laggards have been left to scramble for parts at price points not seen since the fall. The Coffee Lake Refresh (9th Gen) is under NPI stage now, with mass production probably not coming in the immediate future. Intel just launched i5-9400 and i5-9400F, which will eventually replace the currently-constrained Coffee Lake i5-8400. Overall in the PC segment, we’ve yet to hear any improvements on the expected recovery for supply and we should still see shortages well into the summer.

Finished Goods

2018 came to a close with the GPU market in disarray. Nvidia’s issues transitioning from the GEFORCE GTX 10 to the GEFORCE RTX 20 series created a significant void in the GPU market, but minor relief has been provided to ring in the New Year. The GTX 1180 has presented itself as a viable replacement for a variety of end customers. Though the GTX 1180 is devoid of RT Cores, its performance has proven satisfactory for many end customers. As for those specifically seeking the RTX 2080Ti, stock appears to be recovering, but availability is still well behind demand. Additionally, there are rumors circulating that Zotac is creating a version of the RTX 2080Ti that would operate on the same specs, have overclocking capabilities, but be cheaper on the component level. Though market supply seems to be trending in a positive direction, we do not anticipate supply catching up to demand for another 1 to 2 months. Supply is expected hit another hiccup at the start of February as GPU manufacturing shuts down for Chinese New Year.

With Western Digital’s (WD) acquisition of Hitachi, WD is looking to stay competitive with Seagate on pricing for 4TB/6TB/8TB HDDs. As most production comes out of China, we are not expecting to see firm pricing until after Chinese New Year passes. However, with market demand trending towards larger capacities, manufacturer production capacity is expected to be allocated accordingly. We do anticipate that Seagate will take a stand on pricing for HDD capacities of 4TB and lower and may potentially offer more price flexibility on HDDs 6TB and above. As expected, we are still seeing availabilities in the EOL WD Gold series, but that could change soon, as many suppliers secured buffer stock towards the end of 2018. EOL HDDs typically carry a ‘lifetime’ of 2-3 months with suppliers so it’s advised to secure necessary stock sooner rather than later.

Intel series S4510 and S4610 have seen an increase in availability in January, but pricing has remained firm for the most part. Intel has shown a willingness to negotiate pricing, but prices for both Samsung and Micron alternatives continue to drop drastically. Pricing for Micron remains the lowest of the three due to some reports on compatibility issues for the 5100, 5200, 9100, and 9200 series. Meanwhile, there is still demand for the Samsung PM863a and SM863a EOL series. These series are expected to be in demand until Q2 when customers begin to phase into the replacement PM883 and SM883 series. For those looking to make the transition sooner, the PM833 series does have pricing roughly 5% cheaper than the EOL series.


Memory pricing has been sliding for several months now and the first quarter of the calendar year, the season of downsides, is not the time to be looking for signs of a reversal. The Big 3 manufacturers are cutting capex and capacity expansion for the year ahead, targeting to limit bit output growth and balance the vast oversupply in the industry. Only until inventory levels are reduced by 80% will the market start to bounce back in the second half of the year. Micron is reportedly not taking in any more forecasted orders due to how high their inventory levels are and Samsung’s position is no better. Pricing is dropping on a weekly basis and a further 20% drop by the end of this quarter is not far-fetched.

NAND will remain in oversupply for 2019 as major chipmakers have entered mass production of 96-layer 3D chips since Q4 ’18 and yield rates for 64-layer chips are much more stable compared to past years. Manufacturers appear to be managing lean SSD supply well, but sharp average selling price declines are likely to continue through the first half of the year. Server DIMM pricing has seen some big dips in recent months, and 32GB RDIMM pricing is expected to bottom out somewhere in the $195 range by May. The velocity of the price movements have outpaced even the most pessimistic of forecasts.

It is likely that the recent bear market in memory will be viewed as a momentary correction long term, as the demand drivers remain strong with emerging technologies like 5G networks, autonomous vehicles and artificial intelligence serving to stimulate growth in the need for computing, data storage and processing. After an 18-month run up in pricing, fueled by consistent expansion of capacity and strong global demand, the current set of circumstances in the memory market is hardly surprising in light of some jitters about the global economy, but by all accounts we will see a rebound before the year is out.