Capacitor distribution: exploring the fundamentals

David SteinDigi-Key Electronics’ vice-president, global supplier management, David Stein discusses some of the fundamentals underpinning capacitor supply and demand.

The capacitor industry experiences shortages for a variety of reasons. To start, capacitors are widely used in various end markets with high output. The automobile and consumer industries are just two examples where sometimes thousands of capacitors are needed to build a single product.

Secondly, capacitor suppliers have consolidated and some manufacturers have ended production of certain capacitors due to lack of supplier profitability, causing less supply and higher prices. Increasing factory capacity can take anywhere from 12 to 18-months and is very costly, whereas capacitor demand has remained robust in new design activity. Manufacturers have been hesitant to invest given the overall pressures on average selling prices over the past 10-years.

Finally, over the past two decades, suppliers have focused on creating, designing and manufacturing smaller, more powerful products. Manufacturers have shifted production output to smaller case size products versus larger case sizes, resulting in shortages for designs with larger case sizes.

To summarize, the popularity of capacitors in design activity will continue. Suppliers have not made major investments to shift supply to the market. Therefore, continued shortages in certain capacitor categories seemingly are part of the future state.