Low-ESR Aluminum Electrolytic Failures Linked to Taiwanese Raw Material Problems
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FEATURE Breaking News Low-ESR Aluminum Electrolytic Failures Linked to Taiwanese Raw Material Problems n September 13, 2002, it was reported to Pas s i v e low-ESR aluminum electrolytic capacitors developed by Component Industry Magazine by contacts in Luminous and equivalent to the Rubycon ZAand ZL se- OJapan that an unusually high rate of failures of ries. Subsequently, the scientist’s staff members defect- low-ESR aluminum electrolytic capacitors produced in ed with the formula, and began to sell an electrolyte at Taiwan by Lelon Electronics, Luxon Electronics, and a low price to many of the major aluminum electrolytic other aluminum capacitor manufacturers had been houses in Taiwan, including Luxon Electronics, Lelon traced to a problem with an aqueous electrolyte that had Electronics, and other aluminum capacitor manufactur- been used throughout the Taiwanese electrolytic capaci- ers. (IBM has stated that five companies were affected, tor industry. while other sources in Taiwan suggest that as many as Re p o r t e d l y, the problem developed after a materials 11 companies were affected.) scientist working for Rubycon Corporation in Japan left Unfortunately, the staff members who defected from the company and began working for Luminous Tow n Luminous Town Electric with the formula copied only Electric in China. The scientist then developed a copy of the partial formula, and the subsequent electrolyte pro- the Rubycon P-50 type water-based electrolyte, used in duced was unstable when packaged in a finished alu- minum capacitor. The insta- bility of the electrolyte in the low-ESR aluminum elec- Taiwanese Aluminum Electrolytic Capacitor Production trolytic capacitors using this water-based electrolyte leads to the build-up of excess hy- Manufacturer Monthly Output Yearly Output Source (Million Pieces) (Million Pieces) drogen inside the aluminum can, which results in either a Lelon 610 7,320 Actual rupture of the can itself or destruction of the rubber Luxon 450 5,400 Actual end-seal. Either failure is po- tentially catastrophic due to Taiwan Capacitor* 180 2,160 Actual the leaking electrolyte. Ac- Teapo** 155 1,860 Actual cording to top material scien- tists in the aluminum capac- Kamei/Jamicon 150 1,800 Estimated itor industry, if the correct amount of additives is not Other 330 3,960 Estimated mixed into a water- b a s e d electrolyte, electrolysis will Total 1,875 22,500 — o c c u r, releasing a high amount of hydrogen gas in *Taiwan Capacitor produces 80 million pieces per month in Taiwan, and 100 million pieces per month in China. the can and resulting in cat- **Teapo produces 105 million pieces per month in Taiwan and 50 million pieces per month in China. astrophic failure. Subsequent lifetime tests Continued on page 12 10 PASSIVE COMPONENTINDUSTRY SEPTEMBER/OCTOBER 2002 Breaking News Continued from page 10 on low-ESR aluminum electrolytic capacitors pro- Rubber seal is duced in Taiwan by Japanese aluminum capacitor ruptured due to hydrogen houses revealed the occurrence of catastrophic failures buildup from of the Taiwanese aluminum electrolytic capacitors poor electrolyte. after 2000 hours of operation on parts rated for 4000 hours of operation. Intel has stated that the aluminum capacitors with the poor electrolyte may fail after only 250 hours of operation. Industry sources have further revealed that many top companies in the computer motherboard and tele- com infrastructure businesses have been scrambling to obtain low-ESR parts from aluminum electrolytic ca- pacitor suppliers who did not have plants in Taiwan. Subsequent reports suggest that Rubycon Corporation, Nichicon, and Nippon Industries (NIC Components) have been inundated with orders for low-ESR alu- minum capacitors, as more customers shy away from Taiwanese-produced parts. Rubycon, Nichicon, and Failure could Nippon Industries (NIC Components) do not have be catastrophic plants in Taiwan, and thus were not exposed to the bad due to leaking electrolyte in their low-ESR aluminum capacitors. Fur- electrolyte. ther intelligence has revealed that lead times for low- ESR aluminum capacitors are now increasing, and Typical failure mode for low-ESR aluminum electrolytic price increases are imminent as Japanese suppliers capacitor with poor electrolyte prepare to fill the void left by this unfortunate incident. Many industry insiders note that some major Japan- ese aluminum capacitor houses also have offshore pro- industries that consume these products, namely com- duction plants in Taiwan, including both Nippon Chemi- puter motherboards and high-speed modems; although, Con (Hsien plant) and Matsushita (Nantou Hsien depending on the number of parts sold and range of Plant). However, our research has concluded that many buyers, the problem may affect the power supply, mon- of these companies obtain their electrolytes directly itor, and game console industries. It is important to em- from Japan and were probably not affected by the taint- phasize, however, that the products that have been af- ed supply. Other Taiwanese suppliers, such as Jamicon fected are only the low-ESR type aluminum capacitors, (Kamei), apparently were not affected because they ob- which account for less than 20% of Taiwan’s aluminum tain their electrolytes from Japan. Teapo has stated electrolytic capacitor production volume. that it also gets its electrolytes from Japan, and was not affected or disqualified. Potential Long-Term Effects Some industry insiders further speculate that many The effects of the bad electrolyte on the aluminum elec- of the original equipment manufacturers in the comput- trolytic capacitor supply chain are not known at this time. er industry may not be aware of the problem because Two factors play an important role in determining the visibility into component supply chains is limited due to e ffe c t s : the increased usage of contract electronic manufacturers • How long have these electrolytes been in the field; in Taiwan. Other industry sources have commented that • Has the problem been contained to Taiwan, or have the movement of contract electronic manufacturers to the electrolytes found their way to other nations? Asia, coupled with a tendency to source low-cost compo- As the industry becomes aware of the problem, it may nents locally, opens up the potential for additional com- experience a shift in the supply chain for aluminum ca- ponent problems in the future. pacitors. This could result in an increase of lead times and prices for low-ESR aluminum capacitors. Effects on The Market Total Taiwanese production of aluminum electrolytic Publisher’s Note: I n formation about this story was capacitors is approximately 22.5 billion pieces or 30% of obtained from multiple sources, many of which wish to global aluminum electrolytic capacitor unit shipments. remain anonymous due to the ramifications to the entire Thus, the failure of these Taiwanese aluminum elec- supply chain for aluminum electrolytic capacitors. How- trolytic capacitors could have a major impact on the prime Continued on page 31 12 PASSIVECOMPONENT INDUSTRY SEPTEMBER/OCTOBER 2002 Breaking News Continued from page 12 may have on the aluminum electrolytic capacitor supply ever,the story has been confirmed by a variety of sources, chain, but conceded that the effect may be substantial. including m a n u f a c t u r e rs of aluminum capacitors, a s Intel also confirmed the story, but suggested the prob- well as consumers of aluminum electrolytic capacitors lem might be more widespread and may have affected in the computer industry.It is our intention to reportt h i s other aluminum product lines, not just the low-ESR in f ormation so that companies subscribing to Pass i v e parts. Component Industry Magazine are aware of this situa- Dell Computer also confirmed the story, but would not tion and take steps to determine their exposure levels to comment further because of existing secrecy agreements. this emerging problem. Further intelligence revealed that Kamei/Jamicon At press time, IBM Corporation also confirmed the sources its electrolytes from Sanyo in Japan,and likely reports regarding failures of Taiwanese aluminum was not affected by the faulty electrolyte supply. c ap a c i t o rs, stating that five Taiwan-based companies Te apo has stated that it obtains its electrolytes from are involved, not just three. IBM further stated that it Japan and was not affected. They also stated that the is not planning a recall. The problem is limited to desk- situation is isolated to a few suppliers in Tai w a n ,and is top computers only—no laptops are affected. IBM fur- not characteristic of its product line or the Tai w a n e s e ther stated that the problem is univers a l ,a f f e c t i n g aluminum capacitor market in general. Teapo suspects it most brand name computer manufacturers in North is an attempt by Japanese aluminum capacitor suppliers America and Ja p a n .IBM has recorded some failures in to gain market share, and that the unfortunate incident the field, but plan on handling them under p r o d u c t involving a few companies will unfairly categorize the w a r r a n t e e. IBM would not speculate on the effect this entire aluminum capacitor industry in Tai w a n . PASSIVE COMPONENT INDUSTRY SEPTEMBER/OCTOBER 2002 31.