New-Tech Europe | Aug 2019 | Digital Edition

How the Automotive Industry Influences The Passives Market The automotive industry has been experiencing a rapid transformation with products incorporating electronic components at an unprecedented rate. While we may be a few more years away from fully autonomous vehicles, cars are evolving to become even more sophisticated: with embedded software, sensors, artificial intelligence, connectivity, and yes, electrification. Think of today's standard combustion engine car, which has somewhere between 2,000 to 3,000 capacitors. As the electric vehicle gains market share, this creates an overwhelming growth in content—with up to 22,000 MLCCs required in a single car. This number will continue to grow as more functions become electrified. Automotive-grade electronics sell at a higher price, due to the additional requirements around warranty and

liability. Demand from the automotive sector is also somewhat stable with accurate forecasts. This makes the automotive market a high priority for passive suppliers. Smartphone Miniaturization Leads to Component Supply Shortages The smartphone industry is constantly on the move. As consumers expect the release of a greater model each year, leading smartphone launches have become anticipated events. For passive components and memory products, smartphones represent a significant part of overall consumption. The math is simple but insightful. There are approximately 1.5 billion smartphones manufactured per year and each flagship model contains roughly 1,000 capacitors. With the total global output of MLCC sitting at roughly three trillion pieces per year,

you can quickly deduce that nearly 50 percent of the MLCC output goes directly to smartphone manufacturers. This makes the smartphone market the primary driver of consumption and technology. A slowdown in the smartphone market has created an opportunity for greater supply. Smartphone sales have peaked recently. If an uptick in demand happens it could flip the supply/demand picture. How does the IoT Boom Affect Component Supply Shortages? There will be more than 20 billion IoT devices deployed by 2020 according to Gartner, representing more than 100 percent growth in the number of these devices in the next two years. OEMs are working to leverage connectivity features to their advantage, introducing electronic components to previously analog products—doorbells, light switches,

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