Daniel Persico: The long term future of the tantalum market will depend on technology driven innovations

Asian Metal: Please tell us a little bit about your company and what products you work with.

Daniel: My mother company is Kemet Electronics. Kemet is one of the largest tantalum capacitor manufacturers in the world, but also manufactures film, and electronic and ceramic capacitors. I'm currently in Tokyo working with NEC TOKIN, who is being bought by Kemet. The deal isn't done yet because of anti-trust issues, as Tokin also makes tantalum capacitors. I'm in Tokyo running sales and marketing as Senior Vice President of Token. Token, besides making tantalum capacitors, makes power relays for the automotive and telecommunications industry, and other electronic components.

Asian Metal: What is your current assessment of the tantalum market?

Daniel: Steady. The aerospace industry is doing ok. On the capacitors side of it, there is a constant 3% decline on an annual basis because of pinch points both in ceramics on one side and aluminum capacitors on the other. A lot of it has to do with raw material pricing. But I think the market is pretty steady at this point.

Asian Metal: With much if the global production of tantalum coming out of conflict areas in Africa, what impact have the Dodd-Frank bill and other regulatory measures had on the market?

Daniel: There have been pluses and minuses. I’m a big proponent of Dodd-Frank. I've been very involved in Washington, from Kemet's out-reach perspective, talking to Congress and the Senate. Over the long term I think it will have a very positive impact, primarily from a credibility aspect. In the short term there are concerns. In central Africa, people are just walking away because they feel it is just too much of a hassle. I think that’s over blown. The biggest issue we have today is lack of capacity for mine certification, bringing these mines on. Part of the TIC's responsibility is to help support certification programs so that we can bring more of these mines back to work.

Asian Metal: How do you see the development of the capacitor and aerospace sectors moving forward, and what impact will this have on consumption?

Daniel: In general, tantalum capacitors, on a revenue basis, are seeing over the past 10 years a 3% decline per year. A lot of that is due to competition. Also, instability in the market every 5-7 years has had a significant impact on the sustainability of tantalum business in particular. I think we will continue to see a slow decline on the capacitor side. But I think we will continue to see aerospace usage, primarily alloys, continue to grow. It really all depends on the GDP perspective. What is the health of the global economy? Are things growing or flat? That is key. I think overall, unless we see some systemic change, things will remain steady. Maybe niche areas like the medical industry will grow, but they don’t drive the overall tantalum market.

Asian Metal: What are your long term thoughts on the market?

Daniel: It will be technology driven, with something new coming out of the industry. That allows for the replacement of some other material. Also, can we deliver more functionality at a lower price? That’s really what drives the capacitor industry.

Asian Metal: What goals do you have moving forward?

Daniel: Finding opportunities for growth. I think driving awareness of what tantalum can be used for is key. Relying on the TIC membership, and the technology that they develop, to create new opportunities is important. The biggest impact on this market has been the decline of capacitors used in PCs and cell phones. My 2000 model computer had 85 capacitors, and big ones. If you take apart a PC today you will find 10-15. Even tablets, where there is growth, do not use as many capacitors as in PCs. We need to find the next application for tantalum. The industry is pretty resilient and I’m always amazed by what applications people come up with. A lot of stuff comes out of universities, so we need to make sure they are given the opportunity to use tantalum in developing technologies.