Passive components makers seeking new applications to revive shipments
By DigiTimes
Posted On 4.12.2018
source: DigiTimes news
Taiwan makers of aluminum electrolytic capacitors and aluminum solid capacities are moving to develop new industrial applications for their passive components, as their shipments have been affected by drastic shrinkage in demand for crypto mining machines amid sharp plunges in the prices of digital currencies, according to industry sources.
The sources said that the price of Bitcoin has once fallen under US$4,000 recently, far below the mining cost level of US$6,000, while that of Ethereum has plunged to US$115 from a high of US$1,377 seen in January 2018. The hard landing of crypto currencies has pushed up inventories of passive components and mining machines, and second-hand mining devices have reportedly been dumped at only 5% of the prices for new machines, further squeezing demand for new machines.
Having expanded production capacities when supply was tight, makers of aluminum electrolytic or solid capacitors have also begun since third quarter of 2018 to suffer due to the US-China trade, lackluster sales of new cars, smartphones, notebooks and tablets worldwide, in addition to stagnant sales of crypto mining machines, the sources indicated.
Mounting inventories at passive components makers are expected to drive down their product quotes by 10-20% in the first quarter of 2019. In addition, rising labor cost and environmental protection expenses in China will also combine to pose increasing pressure on makers, the sources commented.
But makers are not pessimistic about overall business prospects for passive components in the future, as basic market demand still exists and they can move to explore many potential markets including 5G applications and other innovative applications, the sources added.
