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Highlights of the day: Components prices rising

DIGITIMES staff 0

The coronavirus outbreak is disrupting production at both assembly plants and their upstream suppliers, with components prices rising. Now MLCC and chip resistor prices are expected to increase throughout 2020. Memory pricing is also expected to rise, as the quickly spreading coronavirus in South Korea has cast a cloud over production at major DRAM and NAND flash suppliers, Samsung and SK Hynix. Despite the rising price trend, notebook ODMs remain cautious about replenishing their components inventories, as the utilizaation rates at their production plants in China remain low. Server makers may not be hit hard by the outbreak, as manhy of their production lines are outside of China. But their clients are asking them to shift more of their server production out of China, preferably to Taiwan.

MLCC, chip resistor prices set to rise through 2020: Prices for MLCCs and chip resistors are expected to rise through the fourth quarter of 2020 as supply will increasingly fall short of demand for 5G applications while fallouts of the coronavirus outbreak are gradually surfacing, according to industry sources in Taiwan.

Uncertainty grows over global memory chip supply: The rapid spread of coronavirus in Korea has raised increasing concerns about global supply of memory chips in 2020 as Korean makers, Samsung Electronics and SK Hynix, account for 73% global output of these devices, according to industry sources.

Notebook makers cautious about components replenishment amid price hikes: Notebook makers are turning cautious about purchasing some specific components such as MLCCs and chip resistors that are running low in inventory and facing price hikes, as the purchases may push up their costs amid epidemic-induced uncertainties over capacity utilization and terminal demand, according to industry sources.

ODMs asked to install additional server production capacity in Taiwan: ODMs have seen more requests from their server clients for installing additional SMT lines in Taiwan as China's coronavirus outbreak has been impacting server supply from the country, with the development of the US-China trade tensions being another key factor, according to sources from the upstream supply chain.