Price Index Analysis of Electronic Market in HuaQiang North China - April, 2013


1. Price index overview in electronic market in April
The overall prices level of electronic market in  HuaQiang North,China  continued to drop. Price index of monthly average value was 92.37 points, chain fell down 2.81 points, or down 2.95%. Year-on-year declined 4.03 points, or 4.18%. Price index for digital and IT products went upwards, however, prices index for electronic components and mobile phone were lower.

Composite price index was trapped into slump. The most key factor was that domestic economic recovery were still less than expected, dropped PMI index on April verified this. The negative expectation began to appear in Enterprises. This included two aspects: The one was that terminal buyers weakened restocking , which led to short demand for electronic components products. Thus, price was difficult to strengthen; Another was that components manufacturers began to control produce capacity. Even though, shipments for Electronic consumer products generally increased slightly compared with that in March, price indices were complicated and mixed.
    Price index trend of electronics

2. Demand was less than expected, component index continued to decline
Price Index of Electronic components  continued dip direction. Index average value was 97.89 points in April, down 4.96 points, or 4.82%; year-on year fell 4.55 points, or 4.44%. In fact, at the beginning of March, component index had been in a weak trend to hit new low line, its development trend was not as good as terminals such as mobile phones, digital products.
If market weakness was beyond unexpectedly in March, components index dramatically drop could be understandable in April. This situation that domestic economic recovery was weaker than expected had not already improved. On the contrary, it had a tendency to become even worse.The market confidence in second quarter situation also appeared shaking. In this case, the components manufacturers and dealers unavoidably were panic, rushed selling would strengthen. Demand less than expectation and supply pressure increases together led to resonance, the price for components product rapidly fell.

But from  global perspective, the performance of semiconductor industry still remained stable. According to SIA data in March 2013, the sales of global semiconductor reached $23.48 billion,compared with $ 23.23 billion last month, up 1.1% ,compared to$ 23.28 billion in March 2012 also increased by 0.9%. In the first quarter of 2013,global sales in semiconductor industry grew by 0.9% compared to the same period last year. Memory recent prices kept rising,Which was particularly significant contribution to the growth.
SEM  announced that semiconductor equipment manufacturers in North American preliminaries estimated BB value of 1.14 in March 2013. This had been a new record since August 2010, the value was higher than 1 for consecutive three months. This was a rather weird phenomenon. Under the background of preferable overall development of global, China mainland market ,which led the growth of global semiconductor market for a long time, had been sluggish. We believed there was no doubt that mainland China still dominated a extremely important position in the global semiconductor market. At this stage of the recession, largely because everyone was not adapt to the reality domestic economic potential growth rate slowdown, which caused resources mismatched, the imbalance between demand and supply.
>>Electronic component
Price index for electronic components soared fell in April, average value was 106.31 points, fell 2.80 points, or 2.56%. Even though, month-on-month index for Electronic component fell this month, it was still in absolute and relative high position. This was closely relative to that electronic components market was vulnerable to product cost-push. The yield rate and other factors in the field of chip production factors nearly did not cause influence to component industry. The increased high demand for electronic components product itself, of course, was also an important reason.

It was said that Reports that, Japanese enterprises, dominated the high-end position in the field of passive components area,recently adopted a "hunger marketing" strategy. All kinds of passive components generally appeared tight supply phenomenon.Recently,the most tight supply passive components was multilayer ceramic capacitor (MLCC) . The MLCC manufacturing giant, such as taiyo yuden and murata, generally said they were unable to cope with new orders. Orders lead times stretched to 12 weeks, made the longest record since the 2000. However, competition deteriorated in low end area, which pushed the overall price level lower.

Only just inductor showed stronger performance in April, after falling nearly 1 years, inductors index revealed the steady rise-up momentum. Inductors index average value was 99.44 points in April, up 1.37 points, or 1.39%. From the microscopic research, inductor manufacturers and distributors had been at a low current inventory position.

Price index for capacitor, resistor, crystal oscillator and filter monthly fell in April, respectively down 2.06%, 2.64%, 0.03% and 2.06%. It was worth to mention capacitor, price index continuously increased, driven by strong demand and cost, at the first stage. At present, supply pressure eased , price would fall.
>>Integrated circuit
IC price index fell further. Averages value was 95.48 points in April, dropped 5.36 points, or 5.31%. Rising segment included DSP,  MCU,  connectors, and logic circuit. However,CPU, memory, amplifiers, power circuit, digital circuit and chip decreased.
For LED, backlight and lighting demand continued to heat up. For example, Crystal electric limited company, the combined revenue was more than 57 million in March, up 36.14% compared with February. The company also revealed that it began to enter orders busy season in the second quarter . Orders visibility and product portfolio were better than that in the first quarter.The excellent performance for monthly sales was expected to maintain growth momentum.The capacity utilization was pulled up to above 90% in the second quarter , expected to reach full load. Although product shipments soared, but the price of LED devices and terminals was not strong.
Memory chips were still in short supply pattern, At the early April, contract price for DRAM and NAND appeared 8%~13% amplitude increases. The professors in this industry continued to favor such product market. Nanke presented that DRAM market still had 2% supply gap in the second quarter, would be expanded to 5.5% in the fourth quarter. DRAM demand further grew in the second quarter. ASP would modestly rise up in May. The second quarter showd a rising trend from month to month. while prices rise seem little in a short term, but the overall trend would rise.
Texas instruments, DSP leading supplier in global, revenue was $2.885 billion in the first quarter, down from $3.12 billion the same period last year; But the net profit was $362 million, up 35.4%. The company indicated that its chip order had started to increase, although manufacturing customers were still very cautious. Order shipment ratio of Texas instruments increased to 1.03 from 0.91 last year in the fourth quarter.For Texas instruments, There are lots of orders waiting to be produced.

Tags:Price Index Analysis, Electronic Market,HuaQiang North, China