Tantalum Capacitors March 2023 Supply Chain Update

About 70 percent of tantalum raw material demand has been dictated by the electronics industry – primarily as anodes for capacitors, as semiconductor targets and as sintering liners for anodes. Denis M. Zogbi talk about March 2023 tantalum capacitor supply chain in his article published by TTI Market EYE.

Tantalum capacitors are manufactured in both surface mount and leaded configurations. Ninety percent of production of tantalum capacitors produced in the world today are surface mount configurations (based upon dollar value). Surface mount designs are predominantly in the molded chip design; however, a coated chip is also produced for the market. The coated chip has a slightly smaller physical footprint when compared to a molded chip.  

Leaded designs include both axial and radial configurations with radial leaded designs including the molded radial box, the radial dip type tantalum capacitor and the axial type tantalum—also known as the wet slug and/or the hermetically sealed tantalum capacitor, which employs a wet electrolyte. All other tantalum capacitors use a dry electrolyte based upon manganese nitrite or the new conductive polymer cathode materials: polypyrrole, polythiophene and polyaniline (as a sealer).

Molded Chip Tantalum Capacitors

The molded chip design is manufactured by molding the capacitor pellet in a fixed shape mold after the pellet has been attached to a lead frame. Molded chips are available in standard Electronic Industries Alliance USA Style A through D case sizes, larger E case sizes and now the smaller P, J and K sizes available on the global market through distribution.

The molded tantalum chip capacitor is the largest segment of the tantalum capacitor market based upon configuration with the majority of global consumption value. Molded chips are used in almost every end-use market, especially computers, handsets, automobiles, cameras, game consoles and many additional modern electronic devices. Today, surface mount tantalum capacitors are designed for their automatic insertion and are accordingly packaged in embossed plastic carrier tapes that are specifically designed for use with pick and place insertion equipment.

Here are some key component markets in tantalum based upon style and configuration:

Legacy, Specialty and Emerging New Configurations for Tantalum Capacitors

Tantalum capacitors have been produced in specialty configurations for decades. Legacy configurations include the dipped tantalum capacitor, the molded axial and the molded radial tantalum capacitor configuration. Hermetically sealed and wet slug types are consumed in defense and the oil and gas industry. New configurations are asymmetrical owning to the dielectrics molded capabilities.

New and Emerging Configurations

There are some new and emerging tantalum capacitor configurations in the market. New designs include an asymmetrical tantalum capacitor that comes in various unique shapes and sizes (such as the predominant half-moon configuration) that are useful for medical implant environments because of their unique volumetric efficiency. Other emerging configurations include the coin cell design, the tantalum capacitor array, the stacked tantalum capacitor produced for defense applications and the module tantalum designs produced for the European defense industry.

Ta205 Capacitor Raw Materials

Tantalum Ore, Powder and Wire (For Tantalum Anode)

This is an important rare metal consumed as the primary dielectric material of tantalum capacitors (anode). Tantalite, or tantalum ore, is mined in Africa, Brazil and Australia, processed into tantalum powder and wire and consumed in tantalum capacitors. Its price is directly proportional to the supply and demand of tantalum capacitors. About 50 percent of tantalum volume is consumed in capacitor anodes each year. In the monthly report we track the price per pound of tantalite.

The Tantalum Capacitor Supply Chain

An understanding of the tantalum capacitor supply chain is important in establishing a clear picture of the sub-sets of the global components trade. It is important for the reader to know that the supply chain begins in the ground as mined materials, is processed into engineered dielectric materials, molded into and anode and manufactured into a component. It is then distributed vertically to customers into multiple end-use market segments stuffing printed circuit boards with parts and ultimately ends in the recycling bin where tantalum anodes are recycled back into the supply chain for use in tantalum carbides and chemicals. 

Figure 1. illustrates the six primary categories of tantalum capacitor supply chain/ecosystem.

Mining of Tantalum Ore Raw Materials

The supply chain for tantalum capacitors begins in the ground. Certain materials, such as tantalum, are critical to the production of capacitors (anode), resistors (thin film) and semiconductors (diffusion layer) and must be mined before they can be processed into a usable form. Tantalum has unique properties and is considered a strategic material and there is always considerable competition for materials among industries and nations. 

The entire component supply chain is sensitive to the costs of mined materials because they make up a substantial percentage of the variable costs to produce electronic components.  Tantalum is mined from the Earth using both hard rock mining techniques and artisanal collections. The majority of tantalum ore comes from Central Africa (DRC, Rwanda and Uganda), Brazil, Ethiopia and Australia.

Raw Material Processing

Mined tantalum materials must be processed into a level of purity and particle consistency to be further pressed and molded into anodes for electrolytic type capacitors. Therefore, in all instances there is a chemical processing company that bridges the gap between the mine and materials source and the component manufacturer.

In some instances, certain cost competitive capacitor manufacturers have “vertically integrated” their materials processing capabilities in-house as a concerted strategy to increase profitability. This has occurred in the tantalum supply chain to be competitive against its rival in high capacitance ceramic dielectric materials, which are predominantly manufactured captively by the capacitor manufacturers. The engineering of both ceramic and tantalum raw materials requires an expertise in nanotechnology, and the ability to create consistent ultra-small shapes and patterns upon which an electric charge can be established and delivered efficiently.

Since tantalum is a metal, its reduction requires advanced chemical procedures and its anode sintering requires unique furnaces. But the end result in the finished component is the combination of high capacitance and medium range voltage in a robust molded chip package in extremely small case sizes. This product therefore is a cornerstone product in the quest for volumetric efficiency and portability in handsets, tablets, computers, cameras, ABS Cards, SRS systems, inverters, converters and battery management. 

Capacitor Anode Manufacturing

Capacitor anodes for the electrolytic ecosystem are complex structures requiring multiple disciplines of captive and merchant knowledge. There is a concerted effort among vendors within spheres of mutual interest in ore, powder, wire and anode that work towards a commonwealth. The tantalum anode ecosystem thrives through the yoking of multiple disciplines together to consistently produce electronic components with a long history or known reliability and performance. Moreover, all electrolytic capacitor production in units are a feat of engineering because of the number of small but complex individually machines pieces requiring micro-assembly. 

Component Distribution

Once a tantalum capacitor is manufactured by a vendor, it must be distributed to the customer.  Sales are either direct to an OEM (original equipment manufacturer, otherwise known as a “brand” company) direct to an EMS (electronic manufacturing services company) or through an authorized distributor to serve the masses (TTI and Mouser, for example).  For direct sales to an OEM or EMS customer, the volumes must be of such massive proportions as to justify a dedicated sales channel. 

In the Americas and Europe, distributors account for more than half of regional sales; however, in the Asia-Pacific region, more sales are direct to OEM and EMS customers. 

End-Market Consumption

Capacitor dielectrics exist because of their known reliability and performance over time in complex circuitry. Tantalum is no exception. Its performance in an anode is to create a capacitance value at a specific voltage rating with a low equivalent series resistance and in a package size that is not disruptive and out of proportion with the other parts around it. Tantalum has been a keystone product line in portability electronics because of its capacitance + voltage combination. We therefore see tantalum capacitors consumed in these broad end-use segments:

Recycling of Critical Materials (Urban Mining)

The final part of the supply chain for tantalum capacitor components is recycling. Many products are recycled to reclaim their precious anode dielectric metals. While tantalum is not as popular as palladium, ruthenium, platinum or gold it is still recycled back into the supply chain as “scrap” and consumed in other materials processes such as carbides and chemicals.

Urban mining should get a boost from recent supply chain disruptions. This strategy involves recycling older electronic equipment for materials by magnetic separation of components.  Computers are particularly tantalum intensive and a tantalum stream from recycled electronics has contributed to the supply chain each year in a multi-year effort toward sustainability.

Tantalum Capacitor Market Outlook: 2023-2028

Tantalum capacitors have an excellent market outlook in automotive electronics. The polymer tantalum and polymer aluminum style chip capacitors are consumed in traction inverters, power converters, OB chargers and battery management systems in electric transport. Tantalum is also preferred in MedTech, oil and gas, defense, space and laboratory test and measurement equipment with all end-markets expected to grow in market value over the next five years, according to Paumanok IMR estimates,.