The lead-time indicators for passive electronic components have demonstrated anemic market performance for the past two years suggesting lackluster demand from end-use markets. Raw material pricing has been trending downward, which bodes well for the operating margins for passive component manufacturers, but also suggests weakness in the larger global economy, which is a negative indicator for component sales.
Vendor revenue data suggests improvement over the past six months, but this is consolidated to Japan due to the valuation of the yen to the US dollar (and other world currencies) and the growth of the high capacitanceThat property of a system of conductors and dielectrics which permits the storage of electricity when potential difference exists between the conductors. Its value is expressed as the ratio of a quantity of electricity to a potential difference. A capacitance value is always positive. MLCCMultiple-layer capacitors interleave dielectric and electrode layers. This type of capacitor has increased current handling capacity, higher Q, and lower internal series resistance than conventional capacitors of the same size and capacitance., which is outperforming all other passive electronic components when it comes to revenue generation. The outlook for the December 2013 quarter suggests a market slowdown, which is historically accurate due to the holiday season. Longer term growth depends upon the revival of the European economy, which will in turn spur manufacturing growth in China. While we expect key end-markets to remain healthy, including automotive, commercial aerospace, medical, railroad, oil & gas , wireless handsets, tablets, data communications and storage, we also expect other key end markets, such as televisions, notebook computers, desktop computers, cameras, GPS devices and MP3 players to continue to struggle in the new year.
