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66 SMT007 MAGAZINE I JANUARY 2019 This three following items will provide a high- level summary of some of the key constrained and allocated components. 1. Multilayer Ceramic Capacitors (MLCCs) Due to underinvestment on the capac- ity side as previously mentioned, along with increased content requirements of today's electronics, the majority of manufacturers in the MLCC space are operating under alloca - tion rules. Even as many of the major players in this market are currently adding capacity that equates to an approximate 15% increase in output, the market is projected to remain allocated through 2019 and into 2020. Book- to-bill ratios are still running in the range of 1.5:1. Suppliers have also instituted price increases that range from 9–300% effective on all new deliveries after their respective increase announcements. These manufactur - ers have eliminated special contract pric- ing to franchised distributors as well, leaving them to buy at book costs, which is causing price increases in the range of 20–500% to the market. Some manufacturers are setting pric - ing at the end of each month, quarter, or as material becomes available. 2. Thick- and Thin-film Chip Resistors Much like the underinvestment seen in capacitors on the capacity side, thick- and thin-film chip resistors fall in the same situ- ation. Along with increased content require- ments of today's electronics, the majority of manufacturers in this space are operating under allocation rules. Bookings continue to exceed output with no improvements seen into 2020. Price increases began in November 2017 and persisted through the summer. Increases range from 10–25%. Distribution is also forced to buy at book prices, which inflates prices to their customers. 3. Power Discretes, Mosfets, and Diodes Raw materials for the backend have had a profound effect on component availability along with delayed capacity expansion within this commodity space, increasing demand, and availability of backend, package, and test capacity. Lead frames and packaging materi- als also have long lead times or are allocated. Most manufacturers in this space delayed capacity expansion until it was too late to react. Lead times range from 30–52 weeks to allocation depending on the manufacturer and component. There has been significant invest- ment in capacity expansion; however, avail- ability of electronic equipment has slowed the deployment. The new capacity is projected to begin making a positive impact sometime in mid-2019. Price increases have been seen in the 5–15% range.

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