International electronic commerce believes that after the price increase of Taiwan manufacturers, domestic resistance manufacturers will follow up. Unexpectedly, domestic manufacturers have also sent product price increase notices to customers.

The contents of the notice are basically the same: as the cost of many raw materials and packaging materials continues to rise, the cost of some chip resistors increases, and the operating pressure increases. Therefore, after cost accounting and market analysis, we decided to adjust the price of chip resistors. Among them, the product price corresponds to the unit price of standard product precision and model multiplied by 1.1 times, etc., etc. When will the formal implementation begin. Relevant market participants said that the delivery date of products related to customer orders had been extended, the price adjustment documents had been released, and the price increase was confirmed to be true.

According to the data of China Industry Information Network, consumer electronics, industrial electronics, communications and mobile phones account for 43%/23%/18% of the downstream market demand of resistance and capacitance sensor respectively, with consumer electronics accounting for the highest proportion. Passive devices are widely used in consumer electronic equipment. With the development of electronic products towards lightweight, supporting components will also gradually develop towards small size, and the MLCC (chip multilayer ceramic capacitor) procurement market shows a scale growth. According to Rohm data, since 2005, the market share of large size MLCC such as 1206/0805/0603/0402 has continued to decline, and that of 0201/01005 and even smaller size MLCC has continued to grow, and is expected to exceed 40% in 2025. At present, there are less than 20 enterprises in the world that fully master the 01005 MLCC technology, and the product price reaches 145-178 yuan per thousand pieces, which is more than ten times of the 0402/0603 specification. The leading enterprises with technical advantages enjoy high profits.

Since, the smart phone market has ended its rapid growth, and consumer electronics has entered the era of micro-innovation. The lightweight and short size has become the development trend of smart phones, driving the miniaturization of supporting components. Under the general trend of miniaturization, it is expected that the market with high barriers will grow faster. An ordinary 4G mobile phone needs 300-400 MLCCs, and the amount of iPhone7 is more than 700, and most of them are small. Benefiting from the smart phone market, MLCC is expected to grow steadily. It is expected that the global market size will reach US $11.5 billion in 2020, with a CAGR of 5% in five years, higher than the industry average growth rate.

In Japan, TDK acquired EPCOS, the world's third-largest resistance-capacitance sensor component company, in 2008 for 1.2 billion euros; In recent years, Murata of Japan has successively acquired VTI Technologies Oy of Finland and IPDiA S.A. of France. In China, Taiwan Wangquan bought Singapore resistance company ASJ for 430 million yuan in 2014, and Taiwan Guoju bought Camry for 1 billion yuan in 2016. With the frequent mergers and acquisitions of giants, the concentration of the component industry has been increasing.

In response to the technological upgrading and market demand brought by new application fields such as 4G communication, wearable devices, the Internet of Things, and new energy vehicles, in 2014, Fenghua raised 1.2 billion yuan for the scale expansion and key process technology upgrading projects of MLCC, chip resistors, and chip inductors, and planned to invest 1.38/3.27/4.85/251 billion yuan respectively for small MLCC, thin medium and high capacity MLCC, chip resistors, and chip inductors. By the end of 2015, 40% of the capacity construction target has been achieved, and it is expected that it will be available from December 2016 to March 2017. Starting this year, Fenghua's MLCC, SMD resistor and SMD inductor production capacity is expected to increase by 50%/100%/60% respectively compared with that before production, promoting rapid revenue growth.

According to the data from Taiwan's passive component agents, MLCC is very popular at present, which can only meet about 95% of the demand, and the delivery time has been extended for 2 to 4 weeks, before the peak of Chinese Mainland brand phones. In terms of materials, due to the shortage of MLCC high-volume materials (0603/10UF/6.3V), the purchase price has risen significantly from the stable market of about 25-28 yuan to more than 40 yuan. For customers who purchase in small quantities, the purchase price is even as high as 50 yuan. In less than two months, the price of MLCC high capacity has nearly doubled.