Lead times grow as passive component market slows

10th May 2018

Chemigraphic

Lanna Deamer

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Working closely with its supplier network and customers, Chemigraphic is trying to combat an industry-wide delay on the manufacture and delivery of passive electronic components. Lead times for MLCC SMD Capacitors and SMD Resistors have been experiencing extended lead times or allocation times for the last few quarters, and in some cases lead times are now exceeding 50 weeks.

Through continuous market monitoring and analysis, Chemigraphic has been able to stay on top of this issue and secure large amounts of stock on behalf of its customers to provide sustainable supply.

However, the market has tightened further over the last few weeks with many manufacturers of these parts no longer taking additional orders.

The up take in demand is also having a negative effect on pricing, with some prices increasing beyond 75%.

In order to maintain supply levels and keep to product delivery timeframes, Chemigraphic is talking directly to its customers to ask that orders are placed as early as possible to ensure the best possible outcomes and avoid delays and interruptions to the supply chain.

Jemma Heath, Supply Chain Manager at Chemigraphic, commented: “Having once been easily accessible, staple electronic components, these parts have seen a huge increase in demand due to growing markets such as smartphones and electric vehicles. As a result, other industry sectors are seeing a huge squeeze on the availability and delivery times surrounding these components, as well as adverse pricing trends.

“We always ensure we regularly monitor the market to stay on top of such trends, and this has enabled us to increase our stock holding of these parts as this issue develops. However, as our analysis indicates these conditions are unlikely to ease for at least the next 12 months, we are asking our customers to work with us to stay on top of demand and allow us to forward plan as far in advance as possible.”