After diamonds, Nvidia has once again sparked a craze for ceramics
Let me tell you something you might find hard to believe: ceramics are being popularized by AI.
In the past, when you thought of ceramics, the first things that came to mind were probably toilets and tiles.
However, recently, the ceramic concept stocks in the A-share market have skyrocketed.
Ceramics have started to be associated with new AI darlings such as NVIDIA, GPUs, optical modules, and semiconductor equipment.
Now, the reason ceramics have become AI concept stocks mainly lies in the following three aspects:
The first is MLCC. It is a small passive component on the circuit board, whose function is to stabilize the power supply for chips. As the power consumption of AI servers increases, more of these components are needed around the chips.
The second is ceramic substrates and packaging materials. The hotter the chips get, the more materials that can conduct heat and insulate electricity at the same time are required. Metals conduct heat well but are conductive, while plastics are insulating but cannot withstand high temperatures. As a result, the demand for high - end ceramic materials has skyrocketed.
The third is that more advanced ceramic components are also needed in semiconductor manufacturing equipment. For example, in the etching machines and deposition equipment in wafer fabs, ceramics are one of the few materials that can withstand such production environments.
So, what exactly is going on?
MLCC
MLCC, short for Multi - Layer Ceramic Capacitor, is a miniature passive component made by alternately stacking ceramic dielectrics and metal electrodes and co - firing them at high temperatures. Its function is to ensure the stable operation of high - power - consumption chips.
When a chip draws current instantaneously, the voltage will fluctuate. MLCC is responsible for decoupling, filtering, and voltage regulation to help the power supply be more stable.
MLCC is a basic passive component on the circuit board, so it has a nickname, "the rice of the electronics industry".
In the past, MLCC was indeed like rice, cheap, abundant, and unremarkable. But after GPUs became popular, MLCC has transformed from ordinary rice into Kangxi Imperial Rouge Rice (the red rice that Jia Mu in "A Dream of Red Mansions" liked).
The core reason is power consumption.
The power consumption of traditional servers is about 2000W, while the power consumption of AI servers equipped with NVIDIA GPUs can reach 10,000W, which is five times that of traditional servers. GPUs, CPUs, HBMs, NVSwitches, and power modules all need to operate at high frequencies and high power consumption.
As the power consumption of GPUs in AI servers increases, more high - performance MLCCs are needed around the chips to stabilize the power supply. NVIDIA's new platform also adds DPUs and high - speed network modules, which also require a large number of high - end MLCCs.
As a result, the number of MLCCs used on each computing board and switch board is larger, the specifications are higher, and the cost has also increased significantly. When these boards are installed in rack servers, the demand is further magnified.
An ordinary server uses about 2000 - 3000 MLCCs, while an AI server is on a different scale. A single NVIDIA GB300 uses about 30,000 MLCCs, which is more than ten times that of an ordinary server and 30 times that of a mobile phone. A single AI cabinet NVL72 consumes about 440,000 MLCCs.
In May 2026, a teardown report released by Morgan Stanley showed that for the NVIDIA Rubin platform VR200 NVL72, the number of MLCCs used per cabinet increased from 480,000 in the GB300 to 600,000, a 25% increase.
More importantly, the price of MLCCs on each rack has soared from $1530 to $4320, a 182% increase.
Moreover, this growth is a long - term phenomenon.
CICC predicts that the demand for MLCCs in AI servers will increase by 87% and 88% in 2026 and 2027 respectively. Murata Manufacturing Co., Ltd. predicts that from 2025 to 2030, the annual compound growth rate of the MLCC market for AI servers will reach 30%, and the market size will increase by 3.3 times.
The global MLCC market for AI has reached $5.266 billion and is expected to climb to $16.92 billion by 2032.
The global MLCC market is highly concentrated. Murata Manufacturing Co., Ltd. of Japan has a market share of 31% - 32%, Samsung Electro - Mechanics of South Korea has 22% - 23%, and Taiyo Yuden of Japan has about 10%. The three together account for 67% of the global market share.
In the field of high - end AI server MLCCs, Murata dominates with a market share of about 70%.
Domestic enterprises such as Fenghua High - Tech and Sanhuan Group have a market share of less than 10% in the high - end market.
Since 2025, manufacturers such as Murata, Samsung Electro - Mechanics, and Taiyo Yuden have collectively raised prices. In April 2026, Murata raised the prices of MLCC products for AI servers and high - end automotive applications across the board, with the increase ranging from 15% to 35%. The new price system took effect on April 1st.
Samsung Electro - Mechanics raised prices across the board by 10% - 20% starting from April. Its Tianjin factory is operating at full capacity and has suspended accepting new low - price orders. Taiyo Yuden announced that it will adjust the prices of all MLCC products starting from May 1st.
However, the overall capacity utilization rate of MLCCs of Murata and Samsung Electro - Mechanics has reached 90% - 95%, and the production of high - end and high - capacitance products is already at full capacity. The order volume is twice the existing production capacity, and the delivery time is more than 20 weeks.
The construction cycle of MLCC production lines is about 18 - 24 months, and high - end products also require an additional 1 - 2 years of customer certification cycle, so it is impossible to quickly increase the supply in the short term. Murata's capital expenditure from 2025 - 2026 is over 350 billion yen, but it still cannot meet the demand.
On the other hand, mid - and low - end production lines cannot be upgraded to produce high - end products. The equipment, processes, and material systems are completely different, and high - end production lines cannot be used for low - end production either.
Murata's data shows that its sales of server - related MLCCs in 2026 are expected to increase by 85% - 90% year - on - year. Relying on the supply of high - quality materials such as 120nm, 80nm, and 60nm from Boqian New Materials, Samsung Electro - Mechanics has a global market share of over 45% in the field of MLCCs for AI servers and is continuously expanding its production capacity in the Philippines and other places.
Among domestic MLCC companies, Fenghua High - Tech and Sanhuan Group are more focused on civilian use and large - scale substitution; Hongyuan Electronics, Huoju Electronics, and Zhenhua Technology are more focused on high - reliability military applications; Dalikaipu is targeting the high - end niche market of RF microwave MLCCs. Guoci Materials, Jiemei Technology, and Boqian New Materials are in the upstream material and consumable links of MLCCs.
Ceramic Substrates
High - power chips require materials to meet several contradictory requirements simultaneously: they need to conduct heat to quickly dissipate the heat generated by the chips; they need to be insulating to prevent short - circuits in the circuit; they need to be heat - resistant to withstand the high - temperature environment during chip operation; and they need to be reliable to work stably for a long time without failure.
Traditional materials can hardly meet these requirements simultaneously.
Metals conduct heat well but are conductive, so they cannot meet the insulation requirement. Ordinary plastics are insulating but have insufficient heat - resistance and heat - conduction performance.
Only advanced ceramic materials can do the job. High - end ceramic materials such as aluminum nitride (AlN), aluminum oxide (Al₂O₃), and silicon nitride (Si₃N₄) can meet multiple requirements such as heat conduction, insulation, high - temperature resistance, and high reliability.
The thermal conductivity of aluminum nitride is about 200 W/(m·K), and that of silicon nitride can reach 300 W/(m·K). At the same time, they have excellent electrical insulation performance and thermal expansion coefficient matching. Ceramic substrates can quickly conduct the heat from the chips while maintaining electrical insulation.
Ceramic substrates are not a new technology. In the past, ceramic substrates were mainly used in specific scenarios such as power semiconductors and laser devices, and the market scale was limited. But now, ceramic substrates have become "new AI darlings".
There are mainly three process routes: AMB (Active Metal Brazing), DPC (Direct Plated Copper), and HTCC (High Temperature Co - fired Ceramic).
Ceramic substrates are widely used in heat - dissipation substrates for AI servers, advanced HBM packaging, 1.6T/3.2T high - speed optical module packaging, power semiconductor packaging, and laser device packaging.
The demand for passive components in AI servers is more than twice that of ordinary servers. The number of MLCCs used in the GB300 cabinet has increased nearly ten times compared to the GB200. Sanhuan Group has launched multi - specification high - capacitance products for the 48V power supply system in data centers to meet the high - density power supply demand. As the generation upgrades, the number of MLCCs used per unit increases exponentially.
The higher the power consumption of the chip, the stricter the heat - dissipation requirements, and the higher the requirements for the heat conduction, insulation, and reliability of the substrate material. Traditional organic substrates are approaching their physical limits in high - power scenarios, and ceramic substrates have become a necessity.
The power consumption of the NVIDIA GB200 GPU is 1000W, and the power consumption of the Rubin platform has doubled to 2000W. Doubling the power consumption means doubling the heat, and the difficulty of heat dissipation increases exponentially. The thermal conductivity of organic substrates is usually 1 - 5 W/(m·K), while that of silicon nitride can reach 300 W/(m·K).
The demand for ceramic substrates in advanced HBM packaging is even more urgent. HBM is a high - bandwidth memory, with multiple layers of DRAM chips stacked together, resulting in extremely high power - density.
How to quickly dissipate heat in a very small space while ensuring electrical performance and long - term reliability is the core problem in packaging design. The high heat - conduction, high insulation, and low thermal expansion coefficient characteristics of ceramic substrates match this demand exactly.
The optical modules that have been very popular online recently also rely on ceramic substrates.
In 1.6T/3.2T high - speed optical modules, the higher the data transmission rate, the greater the power consumption and the more serious the heat generation. Optical chips are extremely sensitive to temperature, and temperature fluctuations will directly affect the quality of optical signals. Aluminum nitride thin - film substrates can quickly dissipate heat and ensure thermal stability, making them a key material for high - speed optical modules.
However, the production process of ceramic substrates is very complex. There is also a problem that the yield - improvement cycle of this industry is long, and the customer certification cycle is long.
The preparation of high - end ceramic materials such as aluminum nitride and silicon nitride itself has technical barriers. Coupled with the processes of metallization, precision machining, and reliability testing, the expansion speed of the entire industrial chain is limited.
This has created a typical supply - demand gap. On the demand side, the expansion of AI computing power, the increase in chip power consumption, and the penetration of advanced packaging are all accelerating the growth of the demand for ceramic substrates. On the supply side, technical barriers, capacity ramping, and customer certification are all limiting the expansion speed of the supply. The larger the gap, the greater the room for value re - evaluation.
Overseas players are mainly concentrated in Japan, Europe, and the United States. Japanese companies such as Kyocera, Murata, Maruwa, and NGK/Insulators have long dominated the high - end electronic ceramics and packaging materials market. European and American companies such as Rogers and CoorsTek have also made arrangements in high - frequency and high - reliability ceramic materials.
Among domestic manufacturers, Zhongci Electronics is more focused on ceramic housings and substrates for optical communication, RF, and semiconductor packaging; Sanhuan Group, Guoci Materials, Fulede, Yishitong, etc. cover the ceramic substrate, powder, or semiconductor equipment ceramic links; in addition, some companies are involved in aluminum nitride, silicon nitride, and aluminum oxide substrates.
Similar to MLCCs, domestic manufacturers are not lacking in capabilities, but high - end customer certification, batch stability, yield, and material systems are still barriers.
Advanced Ceramics in Semiconductor Manufacturing
Semiconductor manufacturing has relatively high requirements for the environment, including high temperature, strong corrosion, strong electric fields, and ultra - high cleanliness. Ceramics are still the most suitable materials.
The electrostatic chuck (ESC) is the most core application of ceramics in semiconductor manufacturing. Its function is to firmly fix the silicon wafer in place during the wafer processing process using electrostatic force, while controlling the temperature and reducing back - side particle contamination.
The precision requirements for electrostatic chucks are extremely high, and the flatness can reach 1/80 of a hair. The application areas cover key processes such as etching, thin - film deposition, ion implantation, and lithography.
The second major application is the chamber coating, which is used to resist plasma corrosion and protect the equipment chamber.
The chamber coating material is required to be heat - resistant, corrosion - resistant, and have low particle contamination. During the plasma etching process, the internal environment of the chamber is extremely harsh, with high temperature and strong corrosiveness. Ordinary materials will be corroded quickly, producing particle contamination and affecting the wafer yield.
Advanced ceramic coatings can work stably for a long time, reducing the equipment maintenance frequency and improving the capacity utilization rate of wafer fabs.
Going even higher - end is the aerosol deposition film (AD film).
Its function is to form a dense yttrium oxide film on substrates such as metals, quartz, and ceramics to suppress plasma corrosion and reduce particle contamination.
The technical barrier lies in high purity and high density. The purity and density of the yttrium oxide film directly affect the corrosion - resistance performance and the amount of particle generation, and both of these indicators require extremely high process control capabilities.
TOTO, a well - known Japanese toilet manufacturer, is a very representative example. Due to its advanced ceramics business, its stock price soared by 18% on April 30, 2026, and its market value exceeded 1 trillion yen, reaching a record high.
As of the fiscal year ending in March 2026, TOTO's operating profit from its advanced ceramics business reached 27 billion yen, and the proportion of operating profit exceeded 55% for the first time, surpassing its core residential sanitary ware equipment business and becoming the company's largest profit engine. The operating profit margin soared from 9% five years ago to over 40%. The order backlog has been scheduled until 2027.
TOTO started to layout its semiconductor precision ceramics business as early as the 1980s, and its high - purity ceramic technology is at the top level in the industry.
The background at that time was the end of Japan's high - speed economic growth period and the end of the housing construction boom.
Junji Kameshima, the head of TOTO's ceramics business planning department, recalled: "We decided to extend our ceramic technology from the sanitary ware field to high - value - added markets."
TOTO officially established its ceramics division in 1984, targeting three core products for chip manufacturing equipment: electrostatic chucks for etching equipment, aerosol deposition components for protecting logic semiconductor chambers, and high - durability structural parts for large - scale liquid crystal panel production equipment.
The manufacturing processes of these products all originated from the precision molding technology accumulated in toilet production.
In 2020, a new factory in Nakatsu City, Oita Prefecture, Japan, introduced a fully automated production line and an AI quality inspection system, which significantly improved the yield. TOTO announced that it would accelerate the R & D and capacity building of electrostatic chucks, with a focus on the electrostatic chucks required for NAND memory chip production.
Palliser Capital urged the company to allocate more capital to this high - return business, estimating that if the capital investment is increased and the disclosure is improved, TOTO's stock price could soar by 55% from 6000 yen to 9000 yen.
The global market pattern is highly monopolized. The top five global manufacturers monopolize 93% of the market share, and the main enterprises