Murata Rushed and Plundered: Inventory Cleared Out, Prices Surged Over 10 Times!

1. Murata's Inductor Factory Hit by Earthquake: Inventory Cleared, Prices Soar Over 10 Times!

Following a significant impact from the early-year earthquake in Japan, Murata's inductor factory has experienced substantial disruption, leading to market turbulence. According to Murata's official update on January 19, their inductor factory in Awasu is expected to resume production in mid-May or later this year. Internal assessments indicate that equipment and buildings require repairs for production to resume, a process expected to take over four months.

The affected factory primarily produces automotive-grade and industrial control inductors, mainly involving the LQH and DLW series. The most significant impact on downstream industries is observed in automotive-grade inductors, while consumer-grade inductors are relatively less affected due to lower usage. This situation suggests a significant impact on the production of automotive-grade inductors, potentially affecting downstream industries substantially.

By observing widely circulated models in the market, it is evident that Murata's procurement demands are concentrated on affected inductor products from the LQH series, such as LQH32CN_53, LQH32PZ_NC, LQH3NPZ_ME, LQH2HPZ_GR, many of which are automotive-grade materials with unit prices ranging from one to two yuan. Following closely are the DLW series filters, with DLW5BSZ501TQ2L for automotive-grade and DLW5BTM501SQ2L for consumer-grade, where market reports indicate significant price hikes, reaching around five yuan from the initial five cents for DLW5BTM501SQ2L.

Murata's official website information reveals that the LQH series comprises over 1300 models, with 500 AEC-Q200 certified, primarily used in automotive powertrains/safety devices (206 models) and automotive infotainment/comfort devices (297 models). The remaining 700 models serve civilian equipment products.

Based on Murata's LQH series naming conventions, distinguishing models like LQH32CN4R7M53L can be done easily. For example, "32" denotes the size in length multiplied by width, "C" represents the application type (recommended for consumer devices, while models with the letter "P" are recommended for automotive use), and the suffix "L" signifies tape packaging.

The market faces challenges in matching demand with available models. Murata's inductor series features numerous models, primarily produced based on custom requirements, unlike capacitors and resistors, leading to lower versatility. As the shortage event intensifies, an imbalance in supply and demand occurs, gradually depleting distributor inventories. Simultaneously, disruptions in original factory supply due to damages exacerbate the shortage issue, potentially leading to a phenomenon where many rush to purchase existing stock, further intensifying product scarcity.

2. Skyrocketing Inquiries: Is the Real Demand So High?

While Murata faces shortages, reported demand quantities in the market are surprisingly high. For a single model like LQH32CN4R7M53L, global distributor inventories do not exceed 2500 units, with each pack containing 10 units, totaling only 25,000 units. Considering the reported demands of 30-40k units from a single customer, it raises doubts about the authenticity of such high demand and suggests a possibility of panic-driven stockpiling. Rumors suggest that Murata's distributor inventories can sustain for six months, but the real demand for urgently securing the products remains uncertain. This indicates the presence of panic-buying behavior in the market, contributing to an abnormal surge in product demand.

Murata's prediction for the inductor factory's recovery may not be overly optimistic. Not only is the expected recovery in mid-May or later, but the notification strongly recommends replacing products manufactured in the Awasu factory with third-party products listed in the replacement list (to be periodically updated).

For end-users with genuine, long-term demand, seeking alternatives like TDK, Sunlord, Chilisin, Taitsu, and Shunlong Electronics is a viable option. In the inductor field, Japanese companies, including Murata, TDK, and Sunlord, collectively hold a dominant market share of 14%, 14%, and 13%, respectively. While direct competitors TDK and Sunlord are not listed as replacements, TDK provides various products for automotive V2X, in-vehicle networks, powertrains, safety, and comfort, and Sunlord offers a wide range of inductor products for automotive control, safety, body, and information applications.

According to Taiwanese media reports, Yageo (Chilisin's parent company) and Taitsu have received numerous inquiries from customers. Taitsu confirmed overlapping customers with Murata's inductor factory and mentioned that non-Taitsu customers might need some time before placing orders. Some customers may start redirecting orders due to Murata's production halt, but this requires further observation. Taitsu also observed that some customers, anticipating the extended Lunar New Year holiday in February, have begun pulling orders ahead. Yageo, the parent company of Chilisin, stated that they have received many customer inquiries and will make every effort to assist in meeting customer demands.

Consumer-grade inductors are relatively easy to replace, but the majority of inquiries in the market are for automotive-grade inductors like "LQHxxPxxxx," challenging to replace in automotive applications due to their long lifespan, requiring an extended time for replacement. This situation forces some affected end-users to prioritize deliveries, ensuring ample preparation for production.

3. Conclusion

The earthquake-induced panic buying has brought some order opportunities to the electronic components industry but also has the potential to trigger price speculation and supply chain issues. Challenges in product quality and customer service, such as counterfeit issues and increased customer complaints, are evident. Specialized products like inductors, with distributors not supporting cancellations or returns, elevate customer risks and dissatisfaction. Despite the passive components industry emerging from a low period, performance across application areas is not exceptionally outstanding. The smartphone market shows a mild recovery, industrial sectors continue destocking, and growth in automotive electronics is slowing. In this scenario, companies like Murata may experience significant price fluctuations in the short term, necessitating continuous monitoring of market changes and timely strategy adjustments.