Component Shortages Threaten DAP Availability

DAPs (Digital Audio Players) may face another wave of price increases, inventory shortages, and even delays in the launch of new models. Previously, both HiBy and FiiO announced pricing adjustments for some of their products due to the shortage of RAM. Now, FiiO founder and CEO James Chung has stated that passive components such as PCBs and capacitors are also becoming increasingly scarce.

Component Lead Times and Prices Affect DAP Availability and Product Launches

FiiO is experiencing delays in the delivery of several components used in DAPs (Digital Audio Players). According to the company’s founder and CEO, James Chung, PCBs, capacitors, and resistors are currently facing extremely long lead times. The situation has become so severe that, according to James, “in many cases, there is simply no inventory available for purchase.”

According to Nikkei Asia, managers from various PC manufacturers have received notices from suppliers regarding supply restrictions and price increases affecting multiple components. Natarajan Ramachandran, an executive at the U.S.-based semiconductor company Broadcom, told Nikkei:

“We are seeing supply chain challenges happening in various places. One very unexpected area for us is printed circuit boards. PCB lead times used to be six weeks, but now they have extended to six months.”

AI Remains the Main Culprit

The primary reason behind the component shortage is the massive consumption of capacitors, PCBs, and resistors by artificial intelligence (AI) servers. A single AI GPU server uses thousands of MLCCs (multilayer ceramic capacitors), resistors, inductors, and power-filtering components.

Ashley Preston (Papa), Global Marketing Manager at electronic component distributor Fusion Worldwide, explained:

“Modern server, networking, and high-density computing platforms consume substantially more capacitors and connectors to support power delivery, voltage regulation, and signal integrity. As architectures become more power-dense, passive content per system continues to rise, even if total unit volumes remain relatively stable.”

However, AI data centers are not the only factor contributing to component shortages affecting DAP manufacturing. Rising raw material costs, market speculation, and preventive stockpiling have also played significant roles in creating the current market conditions.

Higher Prices

Resistor and capacitor prices have undergone substantial increases. Adam Nguyen, Business Development Manager at electronic component distributor Lipers Corp, stated on LinkedIn:

“Metal film resistor prices will increase by approximately 20%, and thick-film resistor prices will increase by approximately 15%.”

In the same post, Adam also reported that Panasonic announced a 30% price increase for OS-CON capacitors effective June 1. Higher-end Digital Audio Players commonly use capacitors from Panasonic, as well as manufacturers such as Nichicon, ELNA, Rubycon, and KEMET.

To make matters worse, one of the most widely used components in DAPs is the MLCC (multilayer ceramic capacitor), which is responsible for regulating and stabilizing electrical currents. This type of capacitor accounts for approximately 90% of all capacitors used in Digital Audio Players.

Component prices have increased largely due to higher raw material costs. PCBs are manufactured using materials such as copper, Copper Clad Laminates (CCLs), epoxy resin, and fiberglass. PCB manufacturer Highleap Electronic reports that copper prices reached record highs (US$13,300 per ton in January), while CCL prices increased by 45%.

Preventive Stockpiling

As manufacturers raised prices and AI data centers continued consuming vast quantities of components, overall component availability declined. Uncertainty regarding future pricing and concerns over supply shortages prompted many companies to place larger-than-normal orders.

Further worsening the situation, component suppliers have begun prioritizing AI server production. A report published by the South China Morning Post (SCMP) stated:

“Japan’s Murata Manufacturing, the world’s largest MLCC producer, and South Korea’s Samsung Electro-Mechanics (SEMCO) currently dominate the high-performance AI server segment, while Japan’s Taiyo Yuden trails the two leaders by a significant margin, according to Ito.”

The same SCMP report further indicated that the world’s leading MLCC manufacturers are increasingly prioritizing AI data center demand:

“Murata, which has been operating at about 95% capacity utilization this quarter, recently announced an additional investment of 80 billion yen (US$550 million) to expand production of server-grade MLCCs. SEMCO also stated that its second-quarter production priorities include advanced industrial components such as ultra-high-capacitance MLCCs.”

The Consequences of Component Shortages for DAPs

Given the increasing difficulty in sourcing and receiving components, FiiO founder and CEO James Chung asked customers for their understanding and issued the following warning:

“There is a strong possibility that all related industries will be affected. This could result in higher prices, product shortages, and delays in the launch of new models.”

Despite the challenges, James remains optimistic and believes that rising product prices may eventually produce the opposite effect:

“Higher prices tend to reduce consumption, which may eventually reverse the supply-demand imbalance.”

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