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Quake Contributes to Higher Prices, Longer Leadtimes for Some Components

Electronics buyers can expect longer leadtimes and higher prices for a variety of electronic components through the rest of the year, due in part to the March 11 earthquake in Japan.

The electronics supply chain in Japan is slowly recovering from the damage and disruption caused by earthquake and tsunami, but it will take up to six months for all fabs and factories that were damaged or shut down to get back to full production. That means parts, including aluminum electrolytic and tantalum capacitors, power MOSFETs, IGBTs, and microcontrollers, will be in short supply through the end of the year, according to researcher IHS iSuppli.

Analog IC and microcontroller supply has been hard-hit, and prices and leadtimes are being affected. Analog chips, including general-purpose amplifiers, comparators, and voltage regulators were under-supplied last year and prices increased.

"We had been expecting some relief in 2011, but we are not going to get that relief," said Dale Ford of iSuppli during a recent webinar about the continuing impact of the quake on the supply chain. "There will continue to be extended leadtimes and upward price pressure for those components."

The supply situation is worse for power MOSFETs, IGBTs, small-signal transistors and rectifiers, said Ford. Leadtimes are beyond 20 weeks for those components and there are shortages. Prices will increase for power MOSFETs by 2.2 percent in the third quarter and 1.2 percent in the fourth quarter, according to IHS-iSuppli. Tags for rectifiers will rise 2.0 percent in the third quarter and 0.9 percent in the fourth quarter, while prices will increase 2.1 percent in the third quarter, and 1.2 percent in the fourth quarter for small signal transistors, according to IHS iSuppli.

One semiconductor supplier that was impacted severely the quake was Renesas. Eight of its fabs shut down after the quake, although production has resumed at some of them. However, its Naka fab is still down. That facility builds microcontrollers and system-on-chip devices.

Many of those devices are used by the auto industry, which has been impacted by the quake the most compared to other industries, reported IHS iSuppli.

Renesas represents 44 percent of the world supply of microcontrollers in automotive electronics and automotive electronics represents the largest share of demand for MCUs, according to IHS iSuppli. The total MCU market in 2010 was $16.4 billion, and automotive represented about $5 billion of total market.

Renesas has shifted production from its fabs which were shut down to its other fabs in Japan and to foundries. Renesas reported that its Naka factory will restart in July.

While much of the focus has been on the semiconductor industry, passive component production has also been disrupted in Japan because of the quake. "Seventy percent of the world's supply of aluminum electrolytic capacitors comes out of Japan," said Ford.

Production at capacitor manufacturers, including Nippon Chemi-con, Nichicon, and Rubycon was disrupted by varying degrees. "All of them are working to bring back supply of aluminum electrolytic capacitors," Ford added.

Ford said there are shortages of aluminum electrolytic capacitors and tantalum capacitors and "that will continue through the end of the year," although leadtimes will ease a bit toward the end of the year. Leadtimes for aluminum electrolytic capacitors will average about 14 weeks in April, but will fall back to 12 weeks in the fourth quarter, Ford noted. Leadtimes for tantalum capacitors were 20 weeks in April and will drop to 17 weeks toward the end of the year. Prices for aluminum electrolytic capacitors will rise 2.2 percent in the third quarter and 1.4 percent in the fourth, while tantalum capacitors will move up 1.5 percent in the third quarter and 0.3 percent in the fourth, according to IHS iSuppli.

Ford said the quake had a "broad and deep" impact on the electronics supply chain and is "testing the ability and the resiliency of the supply chain. It is testing the ability of players in the supply chain to respond to this, manage, and learn from it."