Plastic Film Capacitors UPGRADE Metallized Polypropylene Film Capacitor ECQUA series Class X2 In accordance with UL/CSA and European safety regulation class X2 equipped with a safety mechanism. Features High safety (safety function installed) High humidity resistance (THB test : 85 , 85 %, 240 V [AC], 1000 h 0.1 C 1.0 F, 275 V [AC] / 500 h) Compact Flame-retardant plastic case and non-combustible resin RoHS compliant Recommended applications Interference suppressors Explanation of part number Standard 1 2 3 4 5 6 7 E C Q U A A F Product code Dielectric & construction 8 Rated voltage 9 Capacitance Code K M Special lead space product 1 2 3 4 5 6 7 E C Q U A A F Product code 10 Dielectric & construction Rated voltage 8 9 10 Capacitance Code E L 11 12 Cap. Tol. Suffix Cap. Tol. 10 20 Code Blank A 11 12 Cap. Tol. Suffix Cap. Tol. 10 20 Code D Lead form Straight Cut lead Lead form Cut lead Applicable standard It is certified as type ECQUA in the following approval. UL CSA Europe International Approval UL60384-14 CAN/CSA E60384-14 EN60384-14 IEC60384-14 Class Class X2 Class X2 Class X2 Class X2 Certification organization UL VDE or DEMKO When applying this capacitor to European and American safety standards, please use type designation and rating such as ECQUA, 0.1 F. Approval number (File No.) of safety regulations are subject to revision without notice. Ask factory for a copy of the latest file No. Specifications Category temp. range Rated voltage [AC] Capacitance range Capacitance tolerance Dissipation factor (tan ) Withstand voltage Insulation resistance (IR) Maximum AC voltage -40 to +110 275 V 0.0082 F to 10.0 F 10 % (K), 20 % (M) C 1.0 F : tan 0.1 % ( 20 , 1 kHz ) C > 1.0 F : tan 0.2 % ( 20 , 1 kHz ) Between terminals633 V [AC], 1183 V [DC], 60 s Between terminals to enclosure2050 V [AC], 60 s C 0.33 F : IR 15,000 M (20 , 100 V [DC], 60 s) C > 0.33 F : IR 5,000 M F (20 , 100 V [DC], 60 s) C 0.47 F : IR 2,000 M (20 , 500 V [DC], 60 s) 310 V [AC] Use of this capacitor is limited to AC voltage (50 Hz or 60 Hz sine wave). A faint corona discharge may occur inside of the capacitor element at rated voltage, however there is no influence on the reliability of the capacitor. Maximum AC voltage including line voltage fluctuation is 310 V [AC]. 310 V [AC] is not nominal continuous applied voltage, but only indicates maximum value including in the voltage ofthe power supply. Basic nominal voltage is considered as 240 V [AC]. This maximum AC voltae is specified in only ECQUA type, not specified in other types. Please refer to individual product specification, and contact us for further questions regarding design life. Design and specifications are each subject to change without notice. Ask factory for the current technical specifications before purchase and/or use. Should a safety concern arise regarding this product, please be sure to contact us immediately. 21-Apr-20 Plastic Film Capacitors ECQUA series Dimensions T0.5 Cut lead (Suffix A,D) Marking example H0.5 L0.5 4.00.5 20 min. F0.4 Style d0.05 1 A C (B) orC)side 15 ECQUA103K ECQUA104 275VX2 2 Solder-plated copper wire or Solder-plated copper-clad steel wire Q +1.4 -0.6 (A) side 10 K 15 ECQUA106 275VX2 3 B 275V X2 K Note : Only 10 as cap. tol. be marked as "K" P(Lead location limits from center) Unit: Note: Date code. Rating * Dimensions * Quantity Capacitance tolerance : 10 %(K), 20 %(M) Part No. NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW NEW ECQUAAF822( ) ECQUAAF103( ) ECQUAAF123( ) ECQUAAF153( ) ECQUAAF183( ) ECQUAAF223( ) ECQUAAF273( ) ECQUAAF333( ) ECQUAAF393( ) ECQUAAF473( ) ECQUAAF563( ) ECQUAAF683( ) ECQUAAF823( ) ECQUAAF104( ) ECQUAAF124( ) ECQUAAF154( ) ECQUAAF184( ) ECQUAAF224( ) ECQUAAF274( ) ECQUAAF334( ) ECQUAAF394( ) ECQUAAF474( ) ECQUAAF564( ) ECQUAAF684( ) ECQUAAF824( ) ECQUAAF105( ) ECQUAAF125( ) ECQUAAF155( ) ECQUAAF185( ) ECQUAAF225( ) ECQUAAF275( ) ECQUAAF335( ) ECQUAAF335ED ECQUAAF335LD ECQUAAF475( ) ECQUAAF475ED ECQUAAF475LD ECQUAAF685A ECQUAAF106A Dimensions Min. order Q'ty (PCS) Cap. F L T H F d P Q Straight Cut lead 0.0082 0.01 0.012 0.015 0.018 0.022 0.027 0.033 0.039 0.047 0.056 0.068 0.082 0.10 0.12 0.15 0.18 0.22 0.27 0.33 0.39 0.47 0.56 0.68 0.82 1.0 1.2 1.5 1.8 2.2 2.7 3.3 15.3 15.3 15.3 15.3 15.3 15.3 15.3 15.3 15.3 15.3 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 26.0 26.0 26.0 26.0 26.0 26.0 31.0 31.0 31.0 31.0 31.0 31.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 6.0 5.0 5.0 5.0 5.0 6.0 6.0 7.5 7.5 9.0 9.0 8.5 8.5 10.0 10.0 12.0 12.0 12.0 12.0 14.5 14.5 19.0 19.0 11.5 11.5 11.5 11.5 11.5 11.5 11.5 11.5 11.5 13.0 12.0 12.0 12.0 12.0 13.0 13.0 14.0 14.0 16.0 16.0 15.0 15.0 17.0 17.0 19.0 19.0 22.0 22.0 24.5 24.5 29.0 29.0 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 22.5 22.5 22.5 22.5 22.5 22.5 27.5 27.5 27.5 27.5 27.5 27.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 00.8 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1 1 1 1 1 1 1 1 1 1 1 1 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 600 600 500 500 300 300 200 200 200 200 150 150 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 800 800 800 800 500 500 300 300 200 200 200 200 150 150 3.3 41.0 15.0 30.0 37.5 1.0 00.8 1.8 3 Style 90 4.7 31.0 23.0 33.0 27.5 0.8 00.8 1.8 2 100 4.7 41.0 18.0 33.0 37.5 1.0 00.8 1.8 3 75 6.8 10.0 41.0 41.0 23.0 28.0 37.5 42.5 37.5 37.5 1.0 1.0 00.8 00.8 1.8 1.8 3 3 60 50 100 * Capacitance tolerance code ()Suffix for lead crimped NotePart number marked with bold is special lead space product. Design and specifications are each subject to change without notice. Ask factory for the current technical specifications before purchase and/or use. Should a safety concern arise regarding this product, please be sure to contact us immediately. 21-Apr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b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bWDSSO\H[FHVVLYHORDGWRWKHOHDGZLUHDWWKHWLPHRIUHSURFHVVLQJRIOHDGZLUH HWF ,IWKHFDSDFLWRULVGURSSHGE\PLVWDNHLWVFKDUDFWHULVWLFVPD\EHGDPDJHG'RQb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n6DIHW\$SSOLFDWLRQ*XLGHIRUIL[G SODVWLFILOPFDSDFLWRUVIRUXVHLQHOHFWURQLFHTXLSPHQW|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