Global Passive Components Industry Market Conditions 4/15
This MarketEYE installment takes a closer look at the current market conditions in passive electronic components for 2015 and the historical trends with respect to currency valuations, lead time indicators, raw material pricing and vendor revenues.
The major factor contributing to adverse market conditions in the global passive electronic component industry in April of 2015 is the continued weakening of foreign currencies to the U.S. dollar. This weakening of the yen, won and New Taiwan dollar is causing increased price competition in all regions of the world. The yen and won weakness to the U.S. dollar will continue to be the major factor impacting revenues of passive component vendors for the remainder of 2015.
The exchange rates of foreign currencies that define the passive component market index, have been having a major impact on vendors that report their revenues in U.S. dollars. Between October 1, 2014 and December 31, 2014 the yen value to the U.S. dollar increased by 10.2%, followed by an additional 4% gain in the March 2015 quarter. Both the won and the NT$ are also weakening to the dollar as is shown in Figure 1.0 below. The weakening of the won in the March 2015 quarter was greater than expected and this improved reporting for Korean vendors of passive components for the quarter when converted into U.S. dollars.