According to the TTI, these are some of the issues contributing to the shortages:
Dramatically Increased Electronic Content
There has been an electrification surge building for the past few years as more electronic functionality is added to many devices. The automotive industry in particular is a prime example with the electronic content in new cars growing +10% per year. Advanced driver assist, backup cameras, infotainment, self-driving and a general move toward all-electric drive will dramatically amplify that trend in the near term. Smart phones and ultra-high definition televisions and displays use a dramatically increasing number of MLCCs.
Simultaneous Demand Increase Across Market Segments of the Electronics Industry
This is an unusual time in the electronics distribution industry as we are seeing growth in most segments of the market – automotive, industrial, military-aerospace, and telecom. Demand for many components, not just MLCC, has quickly soaked up much or all of the unused component manufacturing capacity.
Suppliers’ Reluctance to Add Capacity
The usage of chip resistors and MLCC capacitors has increased every year while resales have dropped at the same or faster rate. Most manufacturers are adding capacity but are focusing this capacity on segments with reasonable returns which means they are not focused on the commercial, general use segments. The economics of the market do not support the level of capacity investment that the market is accustomed to relative to commodity MLCC products. In the past, the supply base has always overshot demand with their capacity additions, perpetuating a strong buyers’ market and on-going piece price deflation. As a result, suppliers are adding capacity in a more measured, balanced way. Capacity is being added now in a closer alignment with demand (growing 12%-15% per year and the industry capacity going up 10%-25% per year). It is just not enough to close the gap that has been created over the last 12 to 18 months and it could take a couple of years to level out.