In the words of the industry, recently Samsung Electro-Mechanics’ multilayer ceramic capacitor (MLCC) factory has been suffering a drop down to 40%, causes due to a great decline in MLCC demand in the electronics market in the Philippines.
The recent decline in MLCC demand due to global economic uncertainty has been significantly manifested in the IT product market. It is interpreted that Samsung Electro-Mechanics first reduced the production of general-purpose MLCCs. Which have a large decrease in demand and a large amount of distribution inventory. Samsung Electro-Mechanics produces MLCCs in the Philippine plant’s main products are general-purpose MLCCs that can be used for IT products such as PCs.
Samsung MLCC plant in the Philippines fell 40 percent
The plant utilization rate of Samsung Electro-Mechanics’ component division, which makes MLCC, continues to decline quarterly this year. The component division produces passive devices such as MLCCs and inductors. Previously also, due to the pandemic, in 2020 and 2021, the cumulative calculation fluctuated between the mid-to-late 80% to the upper 90%.
However, in 2022 it fell to 70% in the 1st quarter, it rose to 74% in the first half but fell back to 65% in the third quarter. The third quarter utilization rate subtracted the first half of production capacity (616.2 billion units). The Production performance (453.5 billion units) from the cumulative production capacity (927.8 billion units). Then it has become 48% production performance (603.7 billion units) in the third quarter.
Last month Samsung Electro-Mechanics was convinced in its third-quarter earnings announcement.
“The fourth quarter (MLCC) utilization rate is expected to decrease compared to the third quarter due to the continued inventory adjustment in IT distribution in the market.”
“Although we are concentrating our capabilities on applications where demand is expected to increase, such as high value-added products, it is difficult to predict when the utilization rate will rebound in the future due to market uncertainty.”
Conclusion…
At this time, Samsung Electro-Mechanics announced that it expects a slight decrease from the third quarter for the forecast for MLCC shipments in the fourth quarter. Most Samsung Electro-Mechanics and its partner workers who went to the MLCC plant in the Philippines have returned. The work that some partners were originally scheduled to do in December was postponed to next year, due downturn.
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