It is expected that the price of many ceramic capacitors will be firm and the delivery time will be extended. The demand for small chip capacitors is very strong, but the supply shortage is restrained due to the large number of suppliers. There is also a high demand for large capacitance components. ISuppli expects that some components (such as capacitors with 22uF 0805 package) will be in serious shortage. The user should work closely with the supplier to obtain capacitors with capacitance value not less than 1uF. Manufacturers have increased productivity for these products, but the delivery of production equipment has been extended to six months. ISuppli expects these products to be in short supply by the fourth quarter of 2006. The price rise is limited to the spot market, and because suppliers are hesitant to increase the price of OEM and EMS users, there will be no distribution status.

Demand for tantalum capacitors has also been strong, and this situation will continue until the end of the second quarter. Some suppliers will raise the prices of some popular components, but iSuppli does not expect prices to rise in the long run. On the whole, prices will remain stable in the second quarter, and the delivery period of some products will be extended. Like ceramic capacitors, suppliers are hesitant to raise the price of OEM and EMS customers.

It is expected that KEMET's acquisition of EPCOS's tantalum capacitor business will not disrupt the market supply order. In fact, supply efficiency will increase.