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The passive component industry has undergone more than a year of inventory adjustment. The current consensus in the industry is that the "low point" has passed, and inventory levels are now generally below a healthy level. Industry players are waiting for the market to recover.
According to reports from Taiwanese media, passive component manufacturers are now more cautious in adjusting production capacity. After realizing something was amiss in the first half of last year, everyone started reducing capacity utilization and strictly controlling output to maintain a balance between "supply, inventory, and prices."
In terms of demand, distributors, unnamed passive component manufacturers, and EMS manufacturers all indicate that although the inventory of consumer electronics such as mobile phones, notebooks, and PCs has been largely depleted, the recovery in demand is only "slight" and not very noticeable. Orders mainly consist of urgent or short-term types.
Regarding inventory, supply chains in China and Taiwan all state that after a long period of inventory digestion, stocks of various applications have been almost completely depleted, awaiting a recovery in end-user demand.
According to CMoney's statistics, the inventory amount and inventory turnover days of passive component manufacturers in the second quarter have generally fallen significantly compared to the same period last year. Yageo's proportion of high-end niche products has climbed to over 75%, resulting in higher inventory turnover days due to more special specifications. However, it is understood that Yageo's inventory turnover days for standard products are less than two months.
Huaxin Technology, which has a relatively high proportion of standard products, is also making efforts to reduce inventory. According to CMoney's statistics, Huaxin Technology's inventory turnover days in the last quarter decreased to 94.57 days, compared to 116.8 days in the fourth quarter of last year and 100.33 days in the first quarter of this year. It has fallen below 100 days, approaching the lower limit of a healthy level.
Regarding the market outlook, manufacturers also believe that Q3 may be on par with Q2 and are optimistic about the gradual recovery of market demand.
Murata Manufacturing Company previously anticipated that smartphone demand would slowly improve in the second half of this year, and the annual performance would remain unchanged. They have a positive outlook on the trend of automotive electrification, which will significantly increase the demand for MLCCs.
Yageo estimates that the performance in the third quarter of this year will be similar to the second quarter, with gross profit margin and operating profit margin remaining stable or slightly increasing. The utilization rate of high-end specialty product capacity should be comparable to the second quarter, possibly exceeding 70%.
The chairman of Walsin Technology previously analyzed that the second half of the year would return to normal seasonal performance, and the overall prosperity for the year is expected to remain stable. The vice chairman added that the demand for automotive and communication products is good. The company continues to invest in specialty products in Taiwan, China, and Malaysia, and expands its customer base in Europe and America, focusing on new products such as satellite communication and automotive.
Suppliers in the upstream of passive components are also indicators of the industry. Qinkai, a conductive paste manufacturer, believes that the majority of the industry chain still consists of short orders, with limited order visibility. However, due to the low operating base in the second half of last
Information source: China Electronic Components Association
