Showing posts for March 2018
22 March 2018
The EU fines eight Japanese capacitor makers
The European Commission has fined eight Japanese companies a total of £222 million for operating a cartel for the supply of aluminium and tantalum capacitors.
The eight companies fined by the Commission were Elna, Hitachi Chemical, Holy Stone, Matsuo, NEC Tokin, Nichicon, Nippon Chemi-Con and Rubycon. Sanyo was also named in the case, though the Osaka-based firm avoided a £28 million fine by blowing the whistle on the cartel’s activities.
Speaking on the case, Margrethe Vestager, the European Union’s competition commissioner said: “Capacitors are an essential part of almost all electronic products. [The] companies fined today colluded to maximise their profits. This may have happened not only at the expense of manufacturers but also of consumers. Our decision again makes clear that we will not tolerate anti-competitive conduct that may affect European consumers.”
An investigation found that over a fourteen-year period between 1998 and 2012, the Japanese firms conducted multilateral meetings and willfully shared commercially sensitive information to avoid competing with one another. It has also been reported that in some instances, the participants even agreed on pricing strategies and “monitored their implementation.”
It was also determined that the nine companies were aware that their business practices were anti-competitive. Messages uncovered during the investigation contained reports of meetings that were signed off with instructions to delete the sensitive information.
Although the companies are all Japanese and most of the meetings between high-ranking executives took place in Japan, the alleged cartel operated on a global basis, including in the European Economic Area (EEA).
You can find a breakdown of the fines below.
|Supplier||Reduction (if any)||Fine|
16 March 2018
Semiconductor Lead Time News (March 2018)
There has been little in the way of change in the relation to the availability and lead times of semiconductors since our previous update last month.
The majority of market sectors have stabilised, providing buyers of electronic components with some degree of confidence as we head towards the end of the financial year here in the United Kingdom.
However, our information continues to indicate that some areas remain beset by lead time issues, most noticeably in regards to discrete, DSP and MCU products. This is something that will need to be accounted for when planning long-term purchasing strategies and we would recommend everybody to work with independent distributors to ensure delivery schedules are met.
For a full breakdown, read our complete market report below
14 March 2018
A Brief Guide to Allocation
As subscribers to our monthly lead time report will be aware, market demand for semiconductors has led to a tightening of supply in recent months.
A report, published by the Semiconductor Industry Association at the beginning of March, highlighted that worldwide sales of electronic components rose year-on-year by 22.7% for the month of January 2018. There was sizeable growth in sales within the European and UK markets, with component sales up by 19.9% and 22.6% respectively, according to both the SIA and the ECSN.
At the same time as global sales have risen, many lead times have started to creep upwards. Our lead time report for February noted that lead times for Texas Instruments and Intel had both gone up, and that lead times in excess of 40 weeks was not all that uncommon.
Some product groups remain on allocation, predominantly in high volume areas such as memory and optical. However, some analysts are predicting that allocation could become more widespread as we head throughout 2018.
So how can purchasing managers guard themselves against the threat of increasing lead times and allocation?
We map out some steps to take before, during and after allocation bites.
As always with the threat of allocation, it pays to be proactive. Customers that schedule their orders in advance are in a favourable position should lead times rise, or a period of allocation hits the market.
If you can commit to purchasing stock months in advance, then you will obviously be protected should products be placed on allocation. Your pre-placed order should be accounted for and should arrive as normal.
If you are unable to schedule orders ahead of time, it may be worth offering a letter of intent or seeing if you can agree on some sort of NCNR where the stock will be purchased ahead of time but payments can be deferred until the date of delivery.
Work with stocking distributors
Many distributors are in fact stocking distributors, and these are a great port of call during the stormy seas of allocation. Cyclops, for example, has 189,785 lines of electronic components in stock and ready for next-day delivery. It goes without saying that during periods of allocation or long lead times, stocking distributors can provide an immediate – or temporary buffer – stock for their customers.
Manage stock – either internally or externally
If you have buffer stock of your own, fantastic! But be careful to manage it and ensure that it is replenished as soon as is feasibly possible.
Some manufacturers will have provisions in place to keep buffer stock on-site, however, if this is not possible, see if you can work with a stocking distributor. Distributors could offer to buy in an extra quantity of stock that could be then used as buffer stock. For in-demand lines, this could be something relatively easy to initiate and will allow for effective stock management for all involved.
Keep up-to-date on industry trends
It is important to keep up-to-date on market conditions at all times, but especially so during periods of allocation. Every month, we produce a report that covers many popular product groups and semiconductor manufacturers, so if STMicroelectronics raise its lead times for its analog lines, we’ll let you know.
When lead times reach unsustainable levels or semiconductors go on allocation, it is easy to panic buy. Unfortunately, attempting to over purchase large quantities in bulk has a knock-on effect throughout the entire supply chain which can force manufacturers to further increase lead times, or leave items on allocation for longer.
It can be a vicious cycle, but if you are transparent then everybody will be better prepared to meet the demands of their customers. If you need 3,000 pieces this week and a further 3,000 pieces in a month’s time say so – don’t attempt to bulk order 6,000 pieces and place unnecessary strain on a system that’s already under pressure.
….and don’t attempt to multi-source….
Many franchised distributors have to report point of sales to their own suppliers. So if you try and multi-order through various companies the likelihood is that you’ll get found out and you could end up being punished for by the manufacturer themselves.
...but do make use of independent distributors
As long as they’re reputable!
If you decide to venture away from franchise distributors in times of allocation, make sure that you do your due diligence. Here at Cyclops, we offer a one-year guarantee on all parts sourced through us but, unfortunately, not every company provides such a safety net.
There’s nothing to fear by going to an independent distributor, especially during times when lead times and allocation make purchasing through ‘traditional’ avenues a fool’s errand. The bigger, more established companies will have built up a large database filled with trusted suppliers and should be able to locate stock no matter where in the world it’s located.
Enter Electronic Component part number below.