The shipment volume of 1359 billion units from January to April decreased by 34 year-on-year, and MLCC suppliers‘ capacity reduction may become a short-term norm

Source: Global Semiconductor Watch Author: Jibang Consulting

    According to TrendForce Consulting, the total shipment volume of MLCC suppliers from January to April this year was 1359 billion, a decrease of 34% compared to the same period in 2021, indicating that global economic issues have a significant impact on the MLCC industry.

    Since the second quarter, due to fluctuating demand for branded and ODM orders, coupled with continuous pressure to lower prices, MLCC suppliers have continued to control production capacity and load to maintain a balance between supply, inventory, and price. The average daily production capacity turnover rate of the factory in May was 78%; Land factories, Taiwan factories, and South Korean factories account for about 60-63%. In the face of continued sluggish terminal consumer demand, suppliers may reduce production and load as a short-term norm.

    From the perspective of the main market demand for MLCC, in terms of mobile phones, the new phones launched by Huawei, Honor, and OPPO in the second quarter cannot effectively boost market consumption power, leading brand factories to be more conservative in their new product sales plans. In terms of servers, it is currently estimated that the annual decrease in total machine shipments this year will be 2.85%, and there may be a possibility of further repairs. The depletion of ODM material inventory will be affected, and as of the end of April, the average inventory of Yingyeda, Guangda, Weiying, and others will still be as high as 4-8 weeks.

    In the PC and laptop markets, due to the triennial replacement season since the epidemic, ODM began mass production and shipment of Intel‘s 13th generation Raptor Lake CPU new platform, regardless of consumer or business models, starting in March. However, according to the release of shipment figures from the top two ODM factories of Guangda and Renbao in April, they only reached 3.3 million units and 2.4 million units respectively, even close to the same period last year. Under the impact of the epidemic, supply chain disruptions, and logistics checkpoints for finished product shipments, The figures of 3.2 million and 2.2 million units paid in. In contrast, the current performance indicates the current sluggish demand in the end consumer market, coupled with the uncertain economic outlook, which makes OEMs conservative in their sales forecasts for new product launches.

    TrendForce Jibang Consulting further stated that previously, the market generally believed that inventory pressure was the main cause of impact on the MLCC industry. However, from mobile phones, PCs, and laptop products that account for 30% of MLCC demand, ODM began to adjust inventory as early as the third quarter of last year, and gradually returned to normal in the second quarter of this year. There were occasional inventory replenishment situations of urgent and short orders, but overall, it still did not meet the pressure of the sluggish consumer market, Therefore, the buyer‘s pulling power towards MLCC is low and unsustainable. The BB Ratio (Book to Bill Ratio) of MLCC supplier in May was 0.85, only a slight increase of 0.01 compared to April, indicating a very low order growth rate.

    Looking ahead to the third quarter, although brand manufacturers and ODM still hope that the traditional peak season can stimulate demand recovery, the calculation essentially reflects the low growth rate of MLCC forecast orders for suppliers, and has not yet seen the performance that the traditional peak season should have. It is worth mentioning that Nissan Murata recently received orders from Apple for the preparation of the iPhone 15 new device, which is expected to be launched in the third quarter. The order volume is slightly higher than the same period last year, indicating that Apple believes that the software and hardware upgrade performance of the iPhone 15 this year is still attractive to consumers.