Material Facts
In early January we noted the rapid increases in prices of some materials used in the CE space, in particular copper, which is used in hundreds of CE applications especially copper laminated PCB boards which are of primary importance to almost every CE device. At the time we noted that the price of copper had been rising, especially since the end of last year, and had reached a price of $3.60, the highest point seen in 5 years. Since then, the price of copper has continued to rise, now reaching $4.11, up 14.16% since 1/15/21 and closing in on the 10 year high of $4.40, adding to the BOM of electronics across the board. That said, of the metals noted in the 1/15/21 note, only one has seen a 90 day price decline, and only two have seen a 30 day price decline, while all of the others have seen price increases.
While most of the price increases seen in these CE oriented metals have been under 5% over the last 30 days, there has been one that has been unusually strong to say the least, and that is iridium, the metal typically used as an organic bonding material in phosphorescent OLED emitters that are used in many CE devices. The price of iridium has increased by $36.4% over the last 30 days and 135.3% over the last 90 days and has just reached $6,000/ounce due to supply disruptions in South Africa, which produces 80% to 85% of the less than 10 tins that is mined each year. Because the amounts are so small, mining does not track demand and remains relatively static, which gives the metal its sensitivity to production issues and rapid changes in demand.
Increases in these and other basic materials for semiconductors and display materials are going to filter through the supply chain and force price increases above what might be the result of current semiconductor foundry shortages and display capacity. We expect demand to soften later in the year if COVID-19 is brought further under control, but it will take some time for high-cost stockpiles and contracts to be worked down.
While most of the price increases seen in these CE oriented metals have been under 5% over the last 30 days, there has been one that has been unusually strong to say the least, and that is iridium, the metal typically used as an organic bonding material in phosphorescent OLED emitters that are used in many CE devices. The price of iridium has increased by $36.4% over the last 30 days and 135.3% over the last 90 days and has just reached $6,000/ounce due to supply disruptions in South Africa, which produces 80% to 85% of the less than 10 tins that is mined each year. Because the amounts are so small, mining does not track demand and remains relatively static, which gives the metal its sensitivity to production issues and rapid changes in demand.
Increases in these and other basic materials for semiconductors and display materials are going to filter through the supply chain and force price increases above what might be the result of current semiconductor foundry shortages and display capacity. We expect demand to soften later in the year if COVID-19 is brought further under control, but it will take some time for high-cost stockpiles and contracts to be worked down.
Iridium Price Chart - 1 Year - 3/22/20 - 3/22/21 - Source: Johnson Matthey
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