Managing MLCC Shortages | DMTL

2018 saw a worldwide shortage of commonly used multi-layer ceramic chip capacitors (MLCC). 

Why was there an MLCC shortage in 2018?

The reason for the shortage was the increase in demand for MLCCs in portable computing devices, smartphones and the automotive industry. Whilst manufacturers anticipated an increase in demand, this increase was significantly larger that expected.

The development of electric vehicles did play a part in the global shortage with electric cars like the Tesla Model S using around 10,000 MLCCs compared to a car powered by an internal combustion engine that has a count of around 2,000.

However, the most significant increase in demand was from mobile communications and computing devices. Phones like the iPhone doubled their MLCC count from 500 to 1,000 per handset between the iPhone 6s and the iPhone X! This created a demand that simply could not be met. 

DMTL's Approach

• Buffer Stocks
  • DMTL offer consistency of supply with a proactive approach to holding buffer-stock, working to schedule orders, call-off orders etc. This meant that DMTL could mitigate the impact of the shortages for clients.

• Extensive Offering
  • DMTL are franchised distributors for almost 30 different manufacturers and have direct relationships with many more, therefore, as leadtimes increased, DMTL were able to look at reliable, alternative sources.

• Expertise
  • As a specialist design-in distributor, the team at DMTL are pro-active and knowledgeable. This proved to be invaluable for clients requiring technical assistance in navigating the MLCC shortage

• Communication
  • A fundamental, commercial principle within DMTL is communication. Account Managers will update customers at the earliest opportunity with information that is useful to them. This basic principle helped clients understand exactly what was going on, when it was going on which is critical when negotiating a shortage situation.

• Relationships with Suppliers
  
  • DMTL have extremely close, personal, relationships with all of their suppliers, some spanning over 30 years. This gives DMTL a unique advantage within negotiations and pre-empting market changes. Internal processes between DMTL and their suppliers have been honed through years of experience to ensure that clients are afforded the best service available. Utilising these relationships during times like the MLCC shortage is invaluable.