Aluminum Electrolytic Capacitors: World Markets, Technologies & Forecasts: 2019-2023 DEEP DIVE ANALYSIS - ISBN # 1-893211-11-8 (2019)

This is the Paumanok Publications, Inc. global market analysis on aluminum electrolytic capacitors, including global markets, technologies and opportunities in 2019 and forecasts to 2023. The 207 page study contains 47 tables and graphs and is the latest report in a series of reports published by Paumanok on this unique supply chain and ecosystem since 1988.

Aluminum Electrolytic Capacitors: Value and Volume of Global Consumption: FY 2019- FY 2020 Forecast

·       This study addresses the global market for aluminum electrolytic capacitors. Aluminum electrolytic capacitors are consumed in many of the key end products that drive the global high-technology economy and are used for bypass, decoupling, filtering and burst power on printed circuit boards and in industrial equipment.  Major end-product markets include TV sets and home theatre equipment; desktop and notebook computers, automobiles, telecommunications infrastructure equipment, defense electronics, medical devices and oil & gas services equipment.  Aluminum electrolytic capacitors are an $4,837 billion USD sub-set of the $29.5 billion (Record Year) global capacitor industry (Fiscal Year ending March 2019 estimates). The shipment volume of aluminum electrolytic capacitors for FY 2019 is estimated to be about 130 billion pieces (a banner year), and average unit pricing from the manufacturer averages about $0.03 to $0.04 dollars a unit.

Impact of US China Trade War On Global Sales of Aluminum Electrolytic Capacitors: FY 2018-FY 2019 Forecast

·       In FY 2019 (Year ending March 2019) a trade war developed between the United States and China over tariffs. An important part of the trade war involved Chinese made capacitors.  China has tremendous production (transplant and domestic) capabilities for both aluminum and plastic film type capacitors because of their historical consumption in consumer audio and video imaging equipment, which also has tremendous production in China.  The trade war has been described by key domestic Chinese capacitor manufacturers as “frustrating.”

Aluminum Electrolytic Capacitors and Their Place In The Larger Energy Storage Market

·       Aluminum electrolytic capacitors account for only 7.3% of all capacitor shipments in terms of volume (130 BB Pieces);but a full 16% of the global capacitor market in terms of dollar value ($4.8 BB USD- the MLCC business segment grew by 40% in dollar value in FY 2019 due to shortages, which overshadowed all other dielectrics).  Aluminum electrolytic capacitors are considered a niche component compared to the hundreds of billions of ceramic capacitors (Multilayered ceramic chip capacitors, or MLCC) produced each year, but provide an important solution for all design engineers faced with the requirement of achieving high capacitance beyond the capabilities of ceramic capacitors.  While alternative technologies such as high capacitance MLCC, and tantalum capacitors have encroached upon the exceedingly vulnerable aluminum capacitor markets worldwide, they can only be used in certain instances to replace aluminum electrolytic.  For high capacitance MLCC this would be in the 1.0 to 1000 microfarad range; and for tantalum chips, the overlap is complete when cross-referenced with the majority of the bulk surface mount aluminum electrolytic capacitors available based solely on capacitance and voltage; however, tantalum molded chips remain more volumetrically efficient when compared to the majority of radial leaded and vertical SMD chip aluminum capacitors- however, the horizontal molded chip aluminum capacitor continues to be a viable alternative to the molded tantalum chip capacitor. 

The Value Proposition of Aluminum Electrolytic Capacitors To The Customer

·       There are two primary technical factors that impact the economics of all capacitors- 1) capacitance is required for almost all electronic circuits and 2) capacitance is equivalent to the physical size or available surface area of the finished component, which makes raw materials used in the production of capacitors key to cost, price and technical advancement.  In aluminum capacitors, the key elements are (1) etched anode and cathode foils (2) capacitor can and packaging; and (3) electrolyte.  The other key elements are (4) rubber stoppers and end-seals, and (5) capacitor separator papers and (6) lead wires.

Sensitivity of The Supply Chain For Aluminum Electrolytic Capacitors (Risk Factors)

·       Aluminum capacitors have a competitive cost structure when compared to other capacitor dielectrics due to the (1) low price per pound for bauxite and thin aluminum foil (2) the high level of automation involved in the production of aluminum capacitors.  Aluminum capacitors differ from other capacitors with respect to cost structure as a result of the number of raw material types consumed per capacitor- i.e. foil and paper, liquid or solid electrolyte, tab, can, leads, stoppers, end seals.  None of the other dielectrics, other than perhaps OPP film capacitors have so many different raw materials and required disciplines..  In terms of raw material feedstocks, aluminum is more cost effective when compared to tantalum and plastic film, but not as cost effective as ceramics, which have lower cost feedstocks in barium carbonate and titanium dioxide.

The Cyclical Nature of The Capacitor Business: Five Year Cycle Update

·       For FY 2019 we estimate that the aluminum electrolytic capacitor market is at a HIGH  point and will decline again after FY 2020 and then decline in value due to oversupply. Aluminum Electrolytic Capacitor markets are at a HIGH point because of the overlap with some of the SMD V-Chip and H-Chip capacitors with MLCC in short supply.  Expect the shortage to last to march 2020, afterwards, expect a decline in overall sales value as excess parts in the supply chain force prices down.

Importance of The Television Set Industry To The Aluminum Electrolytic Capacitor Market

Television set markets, a key end-use market for radial leaded and vertical chip aluminum capacitors, have been struggling for the past two years and having an adverse negative affect on the aluminum capacitor supply chain.  These markets struggle because the consumer preference has shifted.  Most customers, especially young and new high tech customers, are opting to watch TV on their Smartphone, which eliminates so many layers of component redundancy that entire sub-sets of the consumer audio and video imaging segment are collapsing.  Either they adapt or become dinosaurs and go extinct.

Redundant Nature of Consumer AV Products In The Wake of Smartphones: Impact on Aluminum Capacitor Supply Chain

Many consumer electronics products that consumed aluminum electrolytic capacitors are losing demand at the customer level because they are redundant with increased functionality of the Smartphone, which uses no aluminum capacitors.  End-markets that have been displaced by the smartphone include point and shoot cameras, traditional stereo equipment, some smaller television sets, GPS equipment, automotive inertial mapping systems.

Opportunities in Large Can Electrolytic Capacitors

Large capacitors such as the screw terminal aluminum capacitors and the snap mount aluminum capacitors continue to hold great promise for the future, however, in the near term demand for their use in renewable energy systems has slowed down because fuel prices have been so low that grass roots sentiment for change has diminished and consumers are back to buying pick up trucks in America.  There has always been a direct correlation between fuel prices and the interest on renewables and this has not changed.  Eventually the pendulum will swing back to favor solar, wind, geothermal and ocean wave generation technologies.  The European market for aluminum capacitors is interesting for example- it is so large because of their consumption of large can electrolytic capacitors for inverters.

Opportunities in Conductive Polymer Aluminum Capacitors

The key market trends and directions for the world’s manufacturers of aluminum electrolytic capacitors are the movement to polymer cathode systems in solid and liquid formats to lower the equivalent series resistance of the finished capacitor; the lateral movement into double layer carbon or lithium ion based supercapacitors; and market entry into the renewable energy segment- primary filtering inverters used in wind and solar renewable energy systems.

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