Passive component price decline may ease to less than 10% in 3Q19

The price decline of passive components is expected to ease in 2H19. Industry sources pointed out that in the 3Q19, the price decline of MLCC and chip resistors may ease compared to 1H19. The price decline of MLCC may reduce to less than 10% and the price of chip resistors may cease falling.

At present, the suppliers of MLCC in Taiwan include Yageo (2327-TW), Walsin (2492-TW), and Holy Stone (3026-TW). The suppliers of chip resistors include Yageo, Walsin and TA-I (2478-TW). Although the industry holds a conservative view toward the market condition in 3Q19, the ease of price declines may still support the company’s revenue/earnings.

According to the industry, although current MLCC price decline is eased, it may go through a series of correction. The price of MLCC dropped by 30% in 1Q19 and fell by 15-20% in 2Q19. The price decline of MLCC may ease and decrease by 10% in 3Q19. On the other hand, since the price of chip resistor did not increase as much as the price of MLCC, the price of chip resistors may cease falling in 3Q19.