Over the past two years, electronic component supply chains have become increasingly difficult to predict.
In the past, an MLCC, resistor, or standard capacitor was usually not important enough, from a cost perspective, to receive much attention from a procurement team.
That is changing.
Based on the BOMs we see in our own projects, passive components such as resistors and capacitors historically accounted for less than 10% of total BOM cost in many products.
Today, for some consumer electronics products—especially those using four-layer or higher-layer PCBs—that share can exceed 20%.
For certain industrial electronics products, the impact can be even more significant.
In products such as signal distribution devices, industrial gateways, and power control boards, passive components can account for around 30% of BOM cost.
That means a category of components that was once relatively easy to overlook can now materially affect the overall cost of a product.
MLCCs are one of the clearest examples.
Recent market developments make this particularly relevant.
TrendForce reported in August 2026 that Samsung Electro-Mechanics had begun raising 4Q26 MLCC prices for OEM and ODM customers, with consumer-grade X5R products expected to increase by an average of 25–30%. High-end X6S products for AI servers were expected to see increases of around 10–20%, depending on negotiations.
Source: TrendForce, Aug. 27, 2026.
A more recent TrendForce report also described a clear split in the Chinese MLCC market: high-end products for AI servers remain under supply pressure, while some standard consumer-grade products have seen spot prices retreat from earlier peaks. Some Chinese suppliers reportedly already have high-end AI-related orders extending into 2Q27.
Source: TrendForce, Sep. 21, 2026.
So the question is no longer simply:
“How much have MLCC prices increased?”
The more useful question is:
“Which parts of your BOM are becoming more expensive, which are becoming harder to source, and where are there still viable options?”
For a product containing hundreds or thousands of MLCCs, those differences can quickly become significant.
And this is where the role of an EMS becomes more relevant.
For manufacturers handling more complex BOMs and production requirements, this broader role is reflected in Fumax’s electronics manufacturing services, where PCB assembly, component sourcing, PCB fabrication, and box build are handled within the same manufacturing structure.
There is an easy assumption to make here:
China has a mature MLCC supply chain, therefore Chinese MLCCs must be cheaper.
That is not necessarily true.
Chinese MLCC manufacturers are operating in the same market environment as everyone else. Strong demand, capacity utilization, and supply constraints can affect their pricing as well.
The more important advantage, in our view, is choice.
For the same specification, there may be different brands, different distributors, and different supply channels, each with different:
prices, inventory positions, lead times, MOQs, and approval status.
From an EMS perspective, a BOM is not simply a document used to calculate a PCBA quotation.
It also becomes part of the day-to-day supply chain work.
When a component changes in price or availability, the practical questions become:
What changed?
Who can still supply it?
How long will the current inventory last?
Will the change affect the production schedule?
Are there other sourcing options?
Would an alternative require customer evaluation or approval?
The customer defines the BOM and the technical requirements.
The component supplier provides the material.
The EMS has to connect that information to the actual manufacturing plan.
That means a supply-chain change should not stop at:
“This part is now more expensive.”
The useful question is what that change means for the BOM, inventory, purchasing plan, and production.
That is one of the practical differences between buying components through an EMS and simply buying components through a distributor.
Having more suppliers available does not mean an EMS can freely replace validated components.
This is particularly important for mature industrial products.
A component may have already gone through reliability testing, regulatory approval, or years of field use. A part that looks electrically interchangeable on paper may not automatically be an acceptable production replacement.
So when an existing supply channel becomes difficult, the process should remain transparent:
Identify the supply problem.
Review possible sourcing options.
Check availability, specifications, and commercial conditions.
And if a substitution is required, involve the customer in the appropriate validation and change process.
That is very different from a CM changing a validated component simply because it found another purchasing option.
An EMS can expand the customer’s sourcing options. It should not redefine a validated product without the customer’s involvement.
Another situation is often missed when companies compare PCBA quotations.
Not every PCB consists entirely of standard off-the-shelf components.
A BOM may include:
custom inductors,
PCB transformers,
special magnetic components,
or other components manufactured to specific design requirements.
In those cases, the relevant question is no longer simply:
“Which EMS has the lowest SMT assembly cost?”
It can become:
“Which manufacturing ecosystem can better support the custom parts behind this PCB?”
A custom component may involve:
From the EMS side, the work does not end when a supplier is identified.
Supplier communication, samples, parameter confirmation, purchasing, incoming material, and subsequent production all have to remain connected to the BOM and the manufacturing schedule.
When this supplier base is located within a dense manufacturing ecosystem, the distance between sourcing, engineering communication, sampling, and production can become much shorter.
For the PCB itself, this is also where a broader PCB assembly manufacturing capability becomes relevant: the sourcing decision ultimately has to work with the actual SMT, through-hole, inspection, testing, and production process.
That is why, for some complex PCBAs, the advantage of manufacturing in China is not necessarily a lower SMT assembly fee.
The advantage may come from the supply chain behind the PCB and the BOM.
There are also situations where sourcing options are limited.
The customer has a specified component.
There is no suitable alternative.
The price cannot be negotiated down.
And the normal lead time cannot be shortened.
In that situation, VMI can become useful for a different reason.
VMI is often understood simply as:
“Keeping some inventory for the customer.”
But for components with volatile pricing or supply, it can also help connect three things that otherwise tend to be managed separately:
future demand,
supplier availability,
and production requirements.
From the EMS side, VMI is therefore not simply about putting more material into a warehouse.
When demand is sufficiently visible, inventory can be planned in advance, replenishment can be coordinated with actual production requirements, and the impact of supplier changes can be monitored more closely.
It does not change the market itself.
A shortage is still a shortage.
A price increase is still a price increase.
But the customer may be less exposed to having to react to the market only after production is already due.
For long-life industrial products, that kind of visibility can sometimes be more useful than pursuing the lowest possible component price at every individual purchase.
Earlier this year, we encountered a good example of how this can work in practice.
A new customer was developing an edge-computing product using Compute Module 4 (CM4) as the core computing platform.
This is also a direction we have increasingly seen through new RFQs, BOMs, and platform selections: more companies are experimenting with combinations of IoT connectivity, edge computing, and greater local processing capability.
As an EMS, we sometimes see these product directions at the RFQ and BOM stage, before they become widely discussed in the broader public market.
At the same time, new computing platforms can bring new supply-chain challenges.
CM4 is one example.
In early 2026, Raspberry Pi reported significant increases in LPDDR4 memory costs and announced further price increases affecting Compute Module 4 and Compute Module 5 products with 2GB or more of memory. In its April 2026 update, Raspberry Pi said the price of the LPDDR4 DRAM used in its products had increased sevenfold over the preceding year.
Source: Raspberry Pi, Apr. 1, 2026.
For our customer, the issue was not just price.
The actual CM4 price and lead time were both difficult to predict.
We suggested using VMI.
The customer agreed.
They provided funding specifically for the purchase of 500 PCS of CM4, creating an actual order that could then be used to engage the upstream supplier.
The interesting part was what happened next.
The public price did not suddenly become lower.
The published lead time did not suddenly become shorter.
But the quality of the supply information changed.
Previously, we might only have had a website inventory figure or a customer-service response saying that the latest lead time was still being checked.
Once there was a real order behind the requirement, a dedicated sales contact began following the supply status.
We started receiving weekly updates.
Those updates could then be connected back to the customer’s production planning.
So instead of asking:
“What does the website say?”
we could ask:
“Where is our order now?”
Instead of receiving:
“We are still checking.”
we had:
“Here is the latest status from the person responsible for the supply.”
That may not change the market.
But it changes the customer’s visibility into the market.
And in a volatile component environment, visibility itself has value.
The CM4 example is useful because the value was not a lower component price.
It was the connection between several otherwise separate activities.
A customer order created a purchasing commitment.
That purchasing activity created a real supplier interaction.
The supplier’s updates provided better visibility into expected supply.
That information could then be used for inventory and production planning.
In practical terms:
BOM → Supplier → Inventory → Production
The BOM tells us what is required.
The supplier determines what can actually be supplied.
Inventory determines how much production can be supported.
Production turns those purchasing decisions into finished products.
When one part changes, the others can be affected as well.
For an EMS, the work is to keep those changes visible and coordinated through to manufacturing.
That does not mean the EMS replaces the customer’s engineering or procurement function.
It means the manufacturing partner is working close enough to the BOM, suppliers, inventory, and production schedule to understand how one change affects the others.
For products that extend beyond the PCBA itself, the same logic can continue into final integration, wiring, enclosure assembly, testing, and packaging through Fumax’s box build assembly services.
Looking back over the past two decades, electronic component markets have gone through repeated cycles of shortage, oversupply, demand shocks, and price changes.
The 2008 financial crisis created a major demand shock.
The COVID-19 period brought a different combination of factory shutdowns, logistics disruption, inventory shortages, and semiconductor constraints.
Today, the market is being influenced by another combination of factors:
AI infrastructure demand.
Geopolitical uncertainty.
Supply-chain localization.
Pressure on traditional electronics markets.
These forces do not move every component in the same direction.
Some product categories have strong demand.
Others remain weak.
Some components become extremely difficult to source.
Others remain readily available.
The result is a market that is increasingly segmented rather than simply “up” or “down.”
For products with five-, ten-, or even longer-year lifecycles, that matters.
The procurement assumption of:
“We bought this part last year, so next year should be roughly the same.”
is becoming less reliable.
The answer is not:
“Everything is cheaper in China.”
That statement is simply too broad.
If a product is a relatively straightforward PCBA and a local EMS already offers a highly competitive quotation, moving production to China may not create a dramatic advantage in the PCBA assembly cost itself.
But as the product becomes more complex—more components, more complicated PCBs, longer product lifecycles, more custom parts, or greater supply-chain volatility—the value of a China EMS can come from somewhere else.
It may be:
more sourcing options,
a denser electronics manufacturing supply chain,
better access to suppliers for complex PCBs and custom components,
practical VMI and inventory coordination,
a wider mix of domestic and international component sources,
and closer interaction with the surrounding manufacturing ecosystem.
For an EMS, these advantages only matter when they connect back to production.
It is not enough to say:
“We have many suppliers.”
The useful part is being able to connect supplier information to the customer’s BOM, connect purchasing status to inventory, and connect inventory to the actual production schedule.
That is ultimately what the customer is buying from an EMS.
Not just PCB assembly.
Not just component purchasing.
But a manufacturing process in which BOM, sourcing, inventory, and production remain connected when the market changes.
When component markets are stable, procurement can focus primarily on:
Which supplier has the lowest price?
When the market becomes more volatile, the question becomes broader:
Which manufacturing partner gives us enough options to keep the product manufacturable?
Sometimes the answer is a second source.
Sometimes it is earlier inventory planning.
Sometimes it is VMI.
Sometimes it is a real order that gives the supply chain a clearer commitment and a more reliable source of information.
And sometimes it is simply having a manufacturing partner close enough to the supply chain to see changes early and connect them back to production.
That is one reason the value of an EMS cannot always be measured by the assembly price of a PCB.
The value of an EMS is not simply what it pays for a capacitor today.
It is how well the manufacturing supply chain can keep your product manufacturable when the market changes.
