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Tantalum capacitor prices have increased 5–10% in recent months, but price should stabilize unless the price of tantalum increases dramatically. Prices increased because suppliers took capacity offline last year during the downturn, but now demand has picked up resulting in longer leadtimes and higher prices.
David Valletta, executive vice-president for worldwide sales at Vishay Intertechnology in Malvern, Pa. sees demand increasing in all regions including North America. It's a far cry from what was happening in the tantalum capacitor market in the first quarter of 2009.
Because of the recession, tantalum capacitor demand fell dramatically in the first quarter of 2009 as demand for end electronics equipment declined. "Everyone slammed on the brakes and took capacity offline, closed or idled plants, including us," says Valletta. Tantalum capacitor inventories were high in the first quarter but burned off during the year.
Tantalum capacitor demand started to pick up in the third quarter and suppliers started to bring capacity back online.
Because of low inventory levels, increasing raw materials costs and growing demand, tantalum capacitor prices have increased 5–10% since September, says Valletta. Prices should be stable unless the price of tantalum ore rises. In fact, the price of tantalite from which tantalum is derived has increased from about $35/lb in December to $39/lb in January, according to website metals.com.
Buyers can expect inventory levels to remain relatively low for the next quarter or two. Parts being ordered are going to production lines and not stockpiles.
While demand may be increasing, the tantalum capacitor market will not post revenue growth in 2010, according to researcher DECISION in Paris. The researcher says the global market for tantalum capacitors will decline from $2.3 billion in 2008 to $2.1 billion by 2010, but then increase to $2.3 billion by 2013.
Still, growth will be slow because tantalum capacitors are losing market share to other capacitors such as aluminium electrolytic and ceramic.
"Tantalum capacitors have been decimated by multilayer ceramic capacitors (MLCCs)," says Jim Wright, vice president technology for NIC Components, based in Melville, N.Y. "Over the years the tantalum capacitor market has shrunk. They are niche products used where high capacitance value is needed."
Wright says tantalum capacitors used to represent about 25% of NIC's overall business, but now it is only about 15%.
Tantalum offers some advantages in some applications. "With higher voltages, tantalum is a better choice when you need a certain amount of capacitance," says Valletta. "With high capacitance ceramics you can get the high capacitance, but not a significant amount of a voltage rating."