Tantalum: Kemet announces customer-funded capacity increases for MLCCs

On 29 November, capacitor giant Kemet Corporation announced that it had entered into an agreement with one of its customers to help fund increases to capacity. The unnamed customer, assumed to be a large producer of electronic devices, will provide Kemet with interest-free advance payments totalling US$30M. This follows a similar agreement made by Kemet with a customer on 4 September 2018 for US$36M. The funding, which will be paid in quarterly installments for both agreements over an expected period of 18-24 months, will be used to build new capacity for multi-layer ceramic capacitors (MLCCs), for which there is currently a critical global shortage. Kemet says the funding will cover approximately 33% of the company’s planned future capacity. Once the capacity has been built, Kemet will then repay its customers on a quarterly basis.

Roskill view:

At the T.I.C.’s tantalum conference in October this year, Kemet’s CEO Per Loof told delegates how the global market for MLCCs is in deficit of around 500Bn pieces. Many industry members believe this to be an overestimate but the fact remains that there is a global shortage of MLCCs, some of which is being filled by tantalum capacitors. In its new 2018 report on the tantalum industry, Roskill analyses the capacitor market – the largest single application for tantalum which accounted for more than 0.8kt Ta of tantalum consumption this year. MLCCs are the most widely used type of capacitor in electronic devices, while demand for higher-cost tantalum capacitors is usually limited to high-performance, typically high-temperature devices. The MLCC shortage, however, has resulted in tantalum capacitors taking market share from MLCCs in some applications, with consumers building stockpiles of tantalum capacitors through 2017 and 2018 to guard against continued shortages. Once capacitor manufacturers bring new MLCC capacity online and relieve the shortage, this situation will be reversed. 

The capacitor market is seeing strong positive growth because of the ongoing drive for electrification. From the emergence of electric vehicles to the growing use of interactive devices in our homes, we are using a growing number of capacitors in our everyday lives. Devices are also using an increasing number of capacitors per device. The iPhone X, for example, now contains in excess of 1,000 capacitors, more than double that compared with a few models ago. The outlook for tantalum capacitors is particularly positive, with much of the new capacitor demand being for high performance products such as those that can perform in new 5G communications devices or those that can operate at high temperatures in electric vehicles. Future development is focused on replacing multiple MLCCs with one tantalum capacitor product.

Roskill’s new Tantalum: Global Industry, Markets & Outlook report was published in November 2018. Click here to download the brochure and sample pages, or to access further information.

To discuss the tantalum market with Roskill, contact Suzanne Shaw: suzanne@roskill.com or Patrick Stratton patrick@roskill.com