Leading MLCC Players Make Bold Capacity Expansions: Is the Supply-Demand Pattern About to Be Reshuffled?

On September 14, Murata Manufacturing, the global leader in MLCC, revealed that it is researching a new round of capacity expansion in the next three to five years, with a scale that may be "more aggressive than ever". The multilayer ceramic capacitors produced by this Japanese electronic component enterprise are widely used in devices such as mobile phones and servers, undertaking functions including energy storage, filtering, and stable power supply. Masanori Nande, Vice President of the company, said that the company had originally arranged its plant according to the demand in 2028, but customer orders show that the market may still expand after that.

Prior to this round of investment still under evaluation, Murata has already made an arrangement: within the two years up to fiscal 2027, it will invest about 80 billion yen to purchase MLCC production equipment, raising its production capacity in fiscal 2027 by more than 20%. At present, the market has seen falling inventory, extended delivery lead times and rising prices. Before the news of capacity expansion is converted into additional supply, customers have already started to renegotiate prices for existing production capacity.

What is more noteworthy is that price adjustments have not only occurred on server products. Some consumer-grade MLCCs are also included in the price increase scope, and manufacturers hope to adjust orders and production resources through this move. The background of Murata's capacity expansion has further extended from the growth of high-end demand to the redistribution of production capacity among different products.

01

Consumer-grade products also start price adjustments

Samsung Electro-Mechanics is expanding the scope of price increase targets from distributors to complete machine manufacturers and OEMs. According to TrendForce's research on August 27, the average price increase of its consumer-grade X5R products in the fourth quarter will be 25% to 30%, while that of high-end X6S products for AI servers will be 10% to 20%, depending on customer negotiations. At that time, Murata, Taiyo Yuden and Kyocera still kept their prices unchanged, and the situation of simultaneous price adjustment by major suppliers had not yet taken shape.

The expected price increase of consumer-grade products is even higher, which is driven by the active adjustment on the supply side. TrendForce pointed out that Samsung Electro-Mechanics hopes to control this part of orders through price increases to free up resources for the expansion of high-end production lines. Even if the demand for ordinary terminals does not pick up significantly, it may face upward price pressure due to the reduced allocable production capacity. This is a completely different market change from the inventory restocking driven by the general increase in mobile phone and computer sales.

The buffer space of channels is also shrinking. UBS's tracking of more than 100 distributors shows that the MLCC inventory quantity on August 9 decreased by about 8% compared with that on July 11, and the price index rose by about 7% in the same period. This result reflects the sampled channels, which cannot be directly equated with the inventory status of all original manufacturers and all specifications, but it is sufficient to indicate that the spot goods available for immediate procurement on the demand side are decreasing.

Murata's capacitor business revenue from April to June increased by 30% year-on-year; Samsung Electro-Mechanics' component business revenue in the second quarter increased by 29% year-on-year, with server and network-related demand as the growth driver. The expanding sales of high value-added products are translating demand changes into revenue growth for original manufacturers. Manufacturers investing more resources in servers also have a direct financial driving force.

Customers have extended their procurement guarantees to the next year. A MLCC supply agreement for AI servers disclosed by Samsung Electro-Mechanics in early September is worth about 1.07 trillion won, and the performance period covers the whole year of 2027. Long-term agreements provide suppliers with a basis for capacity expansion, and also make part of the future production capacity have a destination in advance. For enterprises that still rely on short-term orders for procurement, how much new capacity they can get after the increase also depends on the previous customer arrangements.

02

From peripheral chips to server power supplies

On September 16, Samsung Electro-Mechanics announced a capacitor solution for megawatt-level racks, with the discussion focus specifically on how to place capacitors around GPUs. The power consumption of chips increases, but the area available for power supply near the package does not expand proportionally; vertical power supply will further change the component layout, and capacity, size and inductance must be considered together.

In the simulation under its given conditions, the 0402-inch, 47 microfarad MLCC achieved good overall performance. The smaller 0201 product is conducive to reducing parasitic inductance, but the capacity density is insufficient; the larger 0603 product can provide higher capacity but has the cost of higher inductance. Mixing different sizes is not the more the better, and it needs to be configured according to the actual impedance of the power supply network.

Even with the same nominal 47 microfarad, different sizes, electrical properties and installation positions may make two capacitors not directly interchangeable. The "high-end MLCC" required by servers is actually a set of design requirements that must be met at the same time. Capacity expansion must eventually correspond to specific specifications, and the inventory of general part numbers cannot automatically fill the demand of new platforms.

Moving up along the power supply path, product upgrading presents another direction. TDK released 100V, 10 microfarad soft-terminal MLCC on September 8, which is planned to be mass-produced in the same month, and one of its main applications is the 48V power supply line of AI servers. Under the same size, the new product doubles the capacity of the original product, reduces resistance through electrode structure optimization, and mitigates the risk of cracking caused by mechanical stress at the same time.

According to the application instructions given by TDK, when the corresponding design conditions are met, the new product can reduce the number of capacitors required in the installation area. Therefore, the market growth of server MLCC cannot be explained only by "how many more pieces are installed per server". The upgrade of a single component can reduce the dosage in some positions, but raises the requirements for manufacturing processes; new demand and device integration occur at the same time, and the number of shipped pieces and sales revenue do not necessarily grow in the same proportion.

Samsung Electro-Mechanics also introduced low-height and embedded MLCC solutions on September 16, placing part of the capacitors inside the circuit board to save surface space and shorten the power supply path. As a result, MLCCs are more closely connected with chip power supply design, and competition gradually involves board-level layout and packaging space, rather than just the number of capacitance values available in the catalog.

For the server power supply architecture with higher voltage, Samsung Electro-Mechanics introduced kilovolt-level MLCC suitable for 800V DC systems in July, and is evaluating next-generation products. This corresponds to the rack power supply side, which is at a different level from the low-voltage power supply of the GPU core. Its technical description specifically compares two types of ceramic materials: one has stable capacity and low heat generation, and the other is easier to achieve small size and large capacity, but the influence of working voltage and temperature on the actual capacity needs to be considered. In the same data center, the upgrading direction of MLCC is not limited to high capacity.

03

Capacity expansion extends to powder materials and manufacturing processes

The new round of expansion proposed by Murata includes the possibility of building larger-scale plants at existing sites at home and abroad in Japan. However, the plant is only the space for production. The company's public manufacturing system shows that the production engineering department will get involved in the early stage of new product development, develop processes and self-developed equipment simultaneously, and establish an integrated manufacturing process from materials to finished products.

This organizational structure is related to the structure of MLCC. According to TDK's technical documents, the product forms capacitors by alternately stacking ceramic dielectrics and internal electrodes. Advanced processes can make the dielectric layer sub-micron level, with the number of stacked layers reaching about a thousand. To increase capacity in a limited volume, materials, thin-layer forming and lamination precision must cooperate, instead of only adding end assembly equipment. To maintain the reliability of thinner dielectrics and more stacked layers, the refinement of material particles and the precise positioning between layers are the basis for product miniaturization.

Corresponding investments have already emerged in the upstream. Boqian New Materials disclosed on July 21 that it plans to invest a total of about 202 million yuan in three projects, two of which are respectively for the fine classification of nano metallic nickel powder and the capacity expansion of fine classification of nickel powder of 200 nm and below. The company's previous capacity expansion announcements also clearly pointed out that the development of miniaturization and ultra-high capacity of MLCC is driving the demand growth of small-particle high-end nickel powder.

These projects do not refer to the expansion of general metal raw materials, but the powder processing capacity that meets the manufacturing requirements of thinner internal electrodes. Material suppliers need to keep up with the specification upgrades of component manufacturers, who in turn need to combine new materials, equipment and processes into a stable production process. It is difficult to judge how much additional supply of target specifications an enterprise can actually increase only by the plant area or the total number of production capacity.

Jiemei Technology also announced on August 17 to add an investment of about 428 million yuan, planning to raise the planned annual production capacity of release film for the North China Production and Research Headquarters Base Project to 768 million square meters. Release film is a process consumable in MLCC production and does not remain in the final component. With the increase of component output and the upgrading of thin-layer processes, the supply and performance of corresponding consumables also need to keep up. The simultaneous investment in nickel powder and release film is providing supporting facilities for the subsequent production increase of component manufacturers.

04

Domestic manufacturers have different opportunities to undertake orders

Three-Circle Group disclosed in its 2026 semi-annual report that the prices of some MLCC specifications have recovered, with sales volume and sales revenue growing year-on-year. Its high-capacity MLCC expansion project has accumulated an investment of about 1.861 billion yuan, with the investment progress close to 50%, and it is planned to reach the intended usable state by the end of May 2027. The original scheduled time for this 2021 fundraising project was 2025, and it was later postponed according to the changes in the external environment. The construction of domestic high-capacity production capacity has also experienced cyclical adjustments.

Fenghua Hi-Tech presented another path in its investor communication in September. The company stated that the Xianghe Industrial Park project has reached full production, and it is currently focusing on adjusting its internal product structure. In the first half of the year, high-end products accounted for about 40% of MLCC business revenue, and the product layout in the server field includes high-capacity, medium and high-voltage and other categories, with some products already used in multi-phase power modules of servers.

In the introduction of these server products, Fenghua Hi-Tech emphasized low equivalent series resistance and long-term reliability under working conditions above 105 degrees Celsius. The company also provides alloy resistors for current detection, which are suitable for high-current, high-power density power supply systems. For enterprises with multiple product lines such as capacitors and resistors, the entry point for supplying server customers can cover a variety of components, instead of only focusing on one type of high-capacity capacitors around GPUs.

However, server power supply covers different voltages and installation links. Entering one of the positions does not mean that it already has the alternative capability of a complete set of high-end products. The high-end revenue disclosed by Fenghua Hi-Tech also includes medium and high-voltage, automotive-grade and other products, and the specific proportion of AI business is not given separately. To evaluate the progress of domestic manufacturers, it is necessary to clarify which models have been supplied and which are still under customer certification, instead of judging the technical gap only by the "high-end proportion".

The adjustment of production capacity by overseas manufacturers also brings domestic suppliers with the space to undertake mid-to-high capacity consumer-grade orders. TrendForce pointed out that the spillover of related orders is driving the increase in capacity utilization of some manufacturers in Chinese mainland and Taiwan region. For these enterprises, the recent delivery and cost advantages can be converted into new orders; whether they can retain customers after the supply recovers depends on whether their product performance, batch consistency and subsequent specifications can continue to keep up.

05

Conclusion

Murata is brewing larger-scale investment, Samsung Electro-Mechanics adjusts quotations and signs long-term agreements, domestic manufacturers and upstream material enterprises promote capacity expansion, and the changes in the MLCC market have gone beyond channel inventory restocking. However, the time for new plants to release supply may not be consistent with the iteration time of chip platforms. If the new production capacity matches customer demand, the delivery pressure of high-end products will be gradually alleviated; if procurement slows down or specifications change, the invested production resources may also face reconfiguration. The current tension is not enough to ensure that all types of MLCC can enjoy the same long growth cycle.

This article is from WeChat official account "Semiconductor Industry Review" (ID: ICViews), author: Jun Xi, published with authorization from 36Kr.