Taiwan-based passive components supplier Yageo has decided to resume taking orders for chip resistors from China customers at 15-20% higher quotes amid serious shortages in the market and rising prices, according to industry sources.
The move came in less than 20 days after the company announced on December 26 its decision to stop accepting orders for thick film chip resistors from channel operators in China due to tight capacity.
The sources said that Yageo has managed to hike prices for commodity passive components, including MLCCs and chip resistors, by 15-20% at the beginning of 2018, mainly because the price hikes are now more acceptable to China customers increasingly plagued by serious supply shortfall of passive components.
In fact, Yageo's latest price hikes are designed to reflect its increase in production cost, as the price for ruthenium, a main material for chip resistors, has shot up 2-fold so far from February 2017, while China's increasingly stringent environmental regulations have also pushed up production costs of the firm's plants in the country. In the past, Yageo could hardly pass the increased costs onto customers, but the changing market conditions have made customers willing to accept price hikes, the sources indicated.
China market sources said that MLCC spot market prices have soared 10-fold within less than two months, with electronic parts and components retailers on the Huaqiang North street, which is touted as "China's top electronics street," in Shenzhen reportedly rushing to hoard up capacitors.
But Taiwan supply chain players said that the shortages of passive components in 2018 should not be worse than in 2017, and the rampant galloping of MLCC prices should mainly result from manipulations by China distributors. But the players are afraid that the manipulations might lead to a serious market disorder.