Japanese Firms to Raise Inductor, Bead Prices by 20%

According to the Economic Daily, leading Japanese manufacturers Murata and TDK are set to raise prices on their products. This move is driven by a resurgence in demand from the smartphone and PC markets, the forthcoming peak season, and a notable increase in silver prices, which have surged over 30% this year. The anticipated price hikes will affect multilayer inductors and ferrite beads, with increases of up to 20%, marking a rare occurrence in the passive components sector.

The industry has recently emerged from over a year of inventory adjustments. As stock levels return to healthy levels and customers replenish inventories ahead of the traditional peak season, demand for passive components has surged. Additionally, the sharp rise in silver prices has been a key factor in the planned price increases for multilayer inductors and ferrite beads.

Silver constitutes approximately 60% of the production cost of these components. Although silver prices have slightly corrected recently, they have still risen nearly 35% since the beginning of the year, significantly increasing cost pressures on manufacturers.

Inductors are one of the three essential components in electronic circuits. They function by generating an alternating magnetic flux when an alternating current flows through the wire, which then inhibits changes in the original magnetic flux. This gives inductors capabilities such as filtering, oscillation, delay, notch filtering, signal selection, noise filtering, current stabilization, and electromagnetic interference suppression. Multilayer inductors, in particular, are known for their magnetic shielding properties, lack of electromagnetic interference, and effective suppression of high-frequency oscillations, making them ideal for high-density circuit designs and widely used in consumer electronics and servers.

Ferrite beads, designed with ferrite and multilayer processes, offer high impedance at high frequencies, providing superior high-frequency filtering and noise suppression. They are commonly used in smartphones, tablets, laptops, power supplies, and other terminal products.

To address the anticipated surge in new smartphone releases and the recovering PC market in the second half of the year, and to cope with rising costs due to increased silver prices, leading manufacturers including Murata and TDK plan to raise prices for multilayer inductors and ferrite beads. Larger sizes are expected to see the first price hikes, ranging from 10% to 20%.

Research indicates that the global inductor industry is highly concentrated, with Japanese manufacturers Murata, Taiyo Yuden, and TDK dominating 40%-50% of the market. TDK and Murata also lead the chip ferrite bead market, holding over 30% of the market share combined. Given their market dominance, their decision to increase prices is likely to influence other manufacturers to follow suit.

Besides Japanese companies, Taiwanese inductor giants such as YAGEO's Chilisin, Walsin Technology Corp's Inpaq, and TAI-TECH are also likely to raise prices. Passive component manufacturers in China, including Sunlord Electronics, Shenzhen Microgate Technology, and Guangdong Fenghua Advanced Technology, are expected to benefit from this wave of price increases.