In this important interview, Dr. Axel Westerhaus, who heads up H.C. Starck’s tantalum metal powder business, provides insight on H.C. Starck’s plans for the future support of the global electronics industry.
PCI Magazine: Dr. Westerhaus, how would you assess the worldwide market for tantalum in the electronics industry, especially taking into account the effects of the recent global economic downturn?
Dr. Westerhaus: The affects of the global economic crisis were already visible in mid-2008. We at H.C. Starck reached our low point in the first quarter of 2009. Since then the industry is back to the equivalent of about 90 percent of the level of the pre-crisis time. It was a very difficult time for the suppliers to the electronics industry because the entire industrial supply chain was focused on de-stocking. This led to a drastic decline in production for upstream suppliers like us. We tantalum-producers have now emerged from rock bottom and have seen continuous growth since the first quarter of 2009.
PCI Magazine: How has the economic downturn changed the tantalum supply chain?
Dr. Westerhaus: In the times of the crisis the pricing pressure within the entire value-added chain increased enormously. The starting point was the pressure on prices coming from the ultimate consumer end-markets. The trend towards lower-priced items in terms of laptops, mobile phones and other electronic products has been evident for a long time.
PCI Magazine: How has H.C. Starck reacted to this trend?
Dr. Westerhaus: We have decided to expand our low-cost tantalum site in Thailand for the production of all price-sensitive products. In future, the Map Ta Phut plant in Thailand will produce a large part of our product line for the electronics market. Because of the cost structure in Thailand we are still highly competitive even when compared to the Chinese producers.
PCI Magazine: What does this mean for the other tantalum sites of the H.C. Starck Group?
Dr. Westerhaus: At the other sites we will concentrate on special products and innovation-driven projects, which we are developing in collaboration with our customers.
PCI Magazine: Does this mean you will be concentrating a large portion of production in Asia in the coming years?
Dr. Westerhaus: This is true, and at the same time, we will also direct this business from Asia.
PCI Magazine: How do you judge the current situation with raw materials, especially in light of the circumstances in Central Africa?
Dr. Westerhaus: The Australian mine Talison closed during the downturn, as neither the quantities nor the price levels were large enough to justify continuing production. However, this mining operation can resume, if necessary. Material from unclear origins in Central Africa is unacceptable as a raw material for the electronics industry for ethical reasons. The use of material from unclear sources will be additionally limited in the future due to anticipated U.S. legislation.
PCI Magazine: Under these circumstances how will you secure your raw material supplies in the long term?
Dr. Westerhaus: H.C. Starck has reliable and ethically credible raw material sources. We recently had the origins of our raw material supplies checked by an independent certification company and received the confirmation that H.C. Starck only stocks raw materials that come from ethically faultless sources. We are currently working towards having our entire supply chain, which includes our partners in the countries of origin, certified in the same way.
PCI Magazine: Do you believe that with these plans you will be able to keep pace with future markets?
Dr. Westerhaus: Yes, we can keep up with the market from the cost side, and we are also able to meet the requirements of the industry from a technological point of view. In terms of raw materials we are, as already mentioned, a reliable partner.
These are the main demands of the markets and, therefore, we are confident that we will continue to play a leading roll in the markets of the electronics industry in the future as well.
Additional Resources: (1) Tantalum Capacitors: World Markets, Technologies & Opportunities: 2010-2015 ISBN # 1-893211-11-8 (© April 2010) (2) TANTALUM: Global Market Outlook: 2008-2013 ISBN # 0-929717-81-3 (2008)