MarketEye: Technical Trends in the Global Capacitor Industry in 2009

05.01.2009 // Posted by: Dennis Zogbi // Posted in: Articles, Passives

Statements of fact and or opinions expressed in MarketEye by its contributors are the responsibility of the authors alone and do not imply an opinion of the officers or the representatives of TTI, Inc.

During the past six months, revenues for passive component manufacturers declined dramatically, resulting in limited return on investment and a slow-down in free cash for investments in new product development. Thus, investments over the past six months were largely investments in continuing programs from past years.

Product innovation in the global capacitor industry in 2009 can be categorized as customer driven on a global basis and based upon a grander concept of overall system efficiency into three main areas of product innovation and development-miniaturization, enhanced performance; and faster response (smaller, better, faster).

Miniaturization:

The trends in 2009 in miniaturization affected the ceramic, tantalum, aluminum and film capacitor markets, with ceramic MLCC now being mass produced in the EIA 01005 case size and the perfected mass production of the EIA 0201 MLCC case size. In tantalum capacitors developments continue in ultra-small case sizes with mass production of the EIA P and J case size parts, with developments continuing in even smaller case size tantalum chips. In aluminum capacitors, the developments in ultra-small and lower profile V-chip aluminum products as well as developments in smaller case size solid-polymer aluminum chips continues as well. In film capacitors, the technical trends still surround the developments of smaller PEN, PPS and PET film chips to displace older radial leaded designs for filtering and X and Y safety circuits.

Enhanced Performance:

In ceramics, tantalum and aluminum capacitors there was a general push toward greater reliability in higher voltage applications, and in higher temperature environments. In high capacitance ceramics there was the continued build-out of MLCC in the 100 µF range with short term plans to develop and introduce ceramic chip capacitors to 220 µF, 330 µF and 470 µF although this technology has been slow in development. In tantalum and aluminum, there was continued development of organic polymer cathode materials for enhanced ESR. In larger can power capacitors, there has been significant activity in innovation and development, especially for high voltage power factor correction capacitors, EDLC supercapacitors, and in screw terminal aluminum capacitors. These large can capacitor products are critical elements in modern renewable energy systems and have supply chain development support from the major vendors of raw materials- including polypropylene, activated carbon and thin aluminum foils. There has also been activity in enhanced binder systems for both ceramic and tantalum capacitors. By controlling the rate at which the binder burns out the capacitor manufacturer can create capacitors with enhanced performance by lowering ESR or lowering ESL.

Integration:

There was also increased activity in integrated passive device development that employs either nichrome, chrome silicide or tantalum nitride resistance layers with silicon dioxide or silicon nitride based capacitors. The need for integrated passive devices is becoming more apparent, with major OEMs involved in the production of small, sophisticated designs, such as power amplifier modules, electronic watches, and DC/DC converters now actively including integrated passive components in a variety of traditional semiconductor packages into their designs to save board real estate.

Market Drivers Behind Innovation:

The primary market drivers behind innovation in passive components continues to be increased functionality of portable digital electronics. Wireless handsets and notebook computers continue to push the envelope of form and functionality, and the movement to smaller capacitors and integration of components continue to be the viable choice for achieving the desired performance levels and customer expectations. This grand concept of achieving increased performance in smaller packages has driven innovation in the capacitor industry since 1990, and this will not abate any time soon.

A more recent trend in passive components is impacting the larger can capacitors that provide critical component functions in renewable energy systems. This includes hybrid electric vehicles, windmills, wave motion machines and solar converters. Innovation in large can capacitors is also driven by the planned modifications of the existing power transmission and distribution systems in the United States under the American Reinvestment and Recovery Act of 2009. To that end we have seen the beginnings of promising new innovation in polypropylene film capacitor technology for power factor correction. Innovations in polypropylene film dielectric over the past five years hold promise for higher voltage, higher capacitance cells that operate at higher temperatures greater than 85 degrees C.

Technology Platforms Supporting Innovation:

The fundamental concept that capacitance is equivalent to the available surface area of the dielectric continues to be the building block upon which innovation continues to grow in passive components. The greatest strides in technology innovation over the past 20 years has been in the application of nanotechnology to ceramics and metals to create greater available surface area in finished capacitors. The adoption and perfection of ceramic and metal processing has enabled the development of ultra-small particle sizes that are consistent from lot-to-lot and are easily worked into a finished capacitor either through advanced stacking or pressed anode technology. In MLCC for example, the application of nanotechnology in ceramic dielectric materials and nickel electrode powders has increased the capacitance value in any given case size by 100 times since 1993. The application of nanotechnology in tantalum has tripled the capacitance value in any given case size since 1993 as well. The increased capacitance noted per capacitor cell over the past 20 years is significant, as it also allowed for the creation of increasingly smaller case sizes. The 01005 MLCC for example, would have been considered impossible to produce in 1993.

In large can capacitors, the innovation is also focused upon increasing either the capacitance value per cell or the operating voltage and operating temperature characteristics per cell. The initial focus of innovation in large can capacitors will be to increase the operating temperature from 85 degrees C to 105 degrees C with targets at 125 Degrees C for the future. Improvements in voltage per capacitor cell are also expected through innovative new dielectric fluids and electrolytes, coupled with advanced new separator materials.

An Innovative Slowdown for FY 2010:

Innovation can be directly traced back to spending on research and development. The top 18 passive component manufacturers in the world spend about 5% of revenues on research and development each year. With the global downturn in revenues in 2009, the amount of spending on research and development has declined accordingly. Thus, while the trend toward “smaller, better, faster” continues, the rate at which new products are coming to market has slowed down significantly over the past six months and new developments will be slow in coming through 2010. The variable in this scenario will be government stimulus packages in the United States, China and Europe that are centered on a common theme of enhancing or upgrading existing infrastructure. Part of these recovery packages includes funding for research and development. This will have the greatest impact upon the large can capacitors where innovation is still sorely needed to make products more efficient. Expect innovations in capacitor technologies that impact power factor correction and smoothing, such as power factor correction capacitors, outdoor lighting ballast capacitors, motor start capacitors and motor run capacitors. Otherwise, for standard chip components, we expect the innovative cycle to return to its prior level of funding in 2011 and 2012, just in time to support the next generation of advanced microprocessors.

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