The price of raw materials rises and the cost of passive components rises.
Passive components are mainly divided into three families: resistors, capacitors, and inductors, many of which are made of copper and aluminum.
The price of copper clad laminate (CCL) has risen recently, and the source is the rise in copper prices. The situation in the aluminum market is the same as that in the copper market. They both started to rise at the end of the first quarter and have accumulated a lot of gains.
With the recovery of market demand, the prices of copper and aluminum can be adequately supported. For passive component manufacturers, the price increase of copper and aluminum will increase the cost of raw materials, and price increases to ensure profits may occur frequently.

Several major markets have recovered and demand for passive components has increased.
With the development of the 5G industry chain, electric vehicles and other fields, the PC and server market demand caused by the "home economy" caused by the epidemic remains unchanged. In general, several important markets around the world are recovering in the fourth quarter, which will also stimulate the growth of passive component market demand.
In many industry sectors, the 5G industry chain and new energy vehicles have the largest increase in demand for passive components, and they are also key projects that are supported.

In the future, under the background of strong new energy vehicles, the demand for passive components will also increase sharply. In the 5G industry, both mobile phone business and new base stations are inseparable from the demand for passive components, and they are more than ever.

Major factories suspend production, may be the final push for price increases.
At a time when the supply and demand relationship in the passive component market is tight, the original factory has stopped production again, which may directly break the market balance and become the ultimate driver of price increases.

According to the latest report from Taiwanese media, Taiwan's passive component factory Walsin Malaysia factory has an employee infected with the epidemic. Currently, production is temporarily suspended and is planned to be suspended for three weeks. Affected products may include car gauge resistors, 0201 resistors and high-energy resistors.
The current critical period for demand recovery is that the original passive component factory is too late to expand production. This time, instead, a new gap has been created due to the suspension of production by Walsin. Next, it depends on how many transfer orders from Walsin can be absorbed by Yageo and Chilisin, and whether they will take advantage of the situation to raise prices.

According to the latest situation, the price increase of passive components will come earlier than expected, and the possibility that the market will start at the end of the year will greatly increase. All of us should take countermeasures from now on to prevent sudden changes in the market from being caught off guard.
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