Summary of Key Points
The surge in demand for AI computing power is driving the MLCC (Multilayer Ceramic Capacitors) industry, which plays a crucial role in electronic devices such as AI servers and automobiles. International leaders (Murata, Samsung Electro-Mechanics, Taiyo Yuden) and domestic top manufacturers (Fenghua High-Tech, Sanhuan Group) have all seen significant performance improvements, with an increase in the proportion of high-end MLCC products. At the same time, the industry is facing supply-demand tensions, leading to price increases and severe order backlogs. High-end products driven by AI are expected to become a core growth driver.
1. AI as the “Engine,” Driving Profits of International Leaders
This turnaround in the MLCC industry is not just a normal recovery but a result of the demand for AI servers:
- Murata (the global leader): Revenue increased by 20.7% year-on-year in the second quarter of 2026, with net profit soaring by 63.7%! The MLCC business was a major contributor, with revenue growing by 30%, mainly due to high-value-added products used in AI servers.
- Samsung Electro-Mechanics (the second-largest player): Revenue reached a record high in the second quarter, and profits more than doubled (106.7%) due to the increased use of high-end MLCCs in AI servers and automobiles. The company also signed long-term supply agreements with 10 major clients, securing future orders.
- Taiyo Yuden: Previously in the red, the company now has a net profit surplus, with operating profits up by 53.3%, attributing this to the strong demand for high-end MLCC products in AI servers.
Together, these three companies account for more than half of the global MLCC market, and their impressive performance indicates that the “high-end demand” in the industry is overwhelming.
2. Domestic Manufacturers Also Benefiting, with Expected Growth of Over 45%
As international leaders thrive, domestic manufacturers are also reaping benefits:
- Fenghua High-Tech: Net profit for the first half of the year is expected to be between 270 million and 300 million yuan, a year-on-year increase of 61.8%-79.8%, driven by increased sales volumes and prices of MLCC products due to the improving industry outlook.
- Sanhuan Group: Net profit is expected to be between 1.79 billion and 2.04 billion yuan, a year-on-year increase of 45%-65%. This is because customers have recognized the quality of their MLCC products, and prices for certain specifications have returned to more reasonable levels, leading to increased sales.
Although domestic manufacturers may not compete with international leaders in the high-end market, they are benefiting from the demand in the consumer and mid-to-high-end segments, especially as some orders from international companies are diverted to them.
3. Price Hikes Are on the Way… Some Increases May Not Even Ensure Availability
The supply-demand imbalance is severe:
- Samsung Electro-Mechanics: Starting August 1st, MLCC prices will increase by 30%, and even if customers accept the price hike, there is no guarantee of on-time delivery.
- Taiyo Yuden: Prices will also rise starting September 1st, with similar challenges regarding delivery.
The reason for these hikes is the overwhelming number of orders: Murata’s total orders in the second quarter reached a record high, and new MLCC orders increased by 85.5%. Taiyo Yuden’s BB Ratio (the ratio of new orders to shipments) has reached 1.72, indicating a severe backlog of orders. In other words, manufacturers are in a strong position and can set prices as they see fit, with customers competing for supplies.
4. Severe Order Backlogs, Even Full Capacity May Not Be Enough
The BB Ratio (the ratio of new orders to shipments) is a key indicator of industry health:
- Murata’s overall BB Ratio is 1.34, and for MLCCs, it is 1.47; Taiyo Yuden’s ratio is 1.72. This means that for every product shipped, there are 1.3 to 1.7 new orders incoming, leading to a growing backlog that requires 24/7 production to meet demand.
- Samsung Electro-Mechanics has also signed long-term agreements with 10 major companies, with total annual contracts worth $510 million for AI server MLCCs, further exacerbating supply shortages.
Jiangbon Research data shows that shipments from three major Japanese and Korean manufacturers in June reached a five-year high, but consumer-grade orders are still exceeding supply, driving up spot market prices by 2-3 times. This indicates a significant imbalance between supply and demand.
5. Future Trends: Even More Shortage of High-End MLCCs, and Prices Likely to Rise
The trend for the second half of the year is clear:
- New AI chips from Nvidia, Google, and AMD will enter mass production in the third quarter, consuming more MLCC capacity. Additionally, customers are stocking up in advance, leading to longer delivery times and higher prices for high-end MLCCs.
Jiangbon Research suggests that the fourth quarter will be critical to determine whether there is a genuine shortage of high-end MLCCs; if even leaders cannot meet demand, prices may skyrocket further.
In summary, the demand for AI computing power continues to surge, and the MLCC industry is just entering a period of prosperity, especially for high-end products, which are expected to remain in high demand. The logic behind this is simple: AI servers require a large number of high-end MLCCs, and with sudden demand growth outpacing supply, prices will continue to rise. While ordinary consumers may not feel the immediate impact, the development of the AI industry has already spurred a significant boom in this small but vital component market.