Network equipment maker warns of MLCC capacitor shortages: Page 2 of 3

August 06, 2018 //By Nick Flaherty
Network equipment maker warns of MLCC capacitor shortages
Network equipment maker Arris is warning of higher prices from a long term shortage of multilayer chip capacitors (MLCCs) and memories.
to this by aggressively expanding inventory of MLCCs to shield customers from expanding lead times and price increases, and decided to decline orders from new customers for constrained and allocated parts. Market conditions have turned out to be worse than expected it said in June.

“Even with our decision to reserve our inventory for existing customers, we will not have enough to cover the increases.  It is not unusual right now to see true demand increases from customers of 30% or more year on year. The supply chain is further complicated by the fact that there are a number of buy-resell agreements among MLCC manufacturers and we are already seeing unexpected shortages as a result.”

McClelland saw this on a recent trip to Asia.

“I spent a week in Asia just a week or two ago and met with all of our key suppliers as well as all of their key suppliers, including MLCC manufacturers,” he said. “It's an interesting environment. It's the typical kind of supply-demand equation but there's a couple of nuances with the approach to business and pushing more component supply through distribution, which has kind of created an odd environment around MLCCs. So, it's not just kind of the normal supply-demand price has gone up a bit; it's really the business distribution model that changed.”

“And so, most companies like us are in an environment where trying to secure supply is on a week-to-week basis and prices fluctuate pretty significantly. So what we've done is worked pretty closely with customers around their supply needs, try and minimize the amount of premiums you're paying as much as possible, and ultimately on top of what we've gone through with memory, we're not in a position we can absorb those costs,” he said.

This has led to higher box prices this year. “We've been pretty upfront and open with customers on what the price increases are, and obviously, seeing

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