Update on Electronic Component Price Increases
Update on Electronic Component Price Increases
Passive Component Price Increase Update
Price Increase Review: Following successive 20% price hikes by Chinese mainland distributors and Samsung Electro-Mechanics, Murata is considering price increases for high-end MLCCs.
February 2: Murata Manufacturing's MLCCs see strong demand in the AI server sector. In FY25 Q3 (natural year 2024 Q4), MLCC orders in the AI server domain surged 29.4% to 268.1 billion JPY. The full-year sales forecast was raised by 60 billion JPY to 1.8 trillion JPY.
February 4: MLCC quotes are being gradually raised. Chinese mainland distributors anticipate a 20% increase in MLCC prices. Yageo and Walsin Technology are also expected to follow suit with spot price increases, with subsequent contract prices also set to rise.
February 11: Samsung Electro-Mechanics raises spot prices for passive components by 20%.
February 17: Murata plans potential price increases for MLCCs used in AI servers. The evaluation is scheduled to be completed in FY25 Q4 (January-March 2026), with a final decision expected by the end of March 2026.
Significant price increases were observed for Samsung Electro-Mechanics, Yageo, and Murata over the holiday period, with some stocks showing notable outperformance. This serves as another update.
Manufacturer Trends: High-end driving mid-to-low tier, price increase trend continues.
Murata: Internally carefully considering the possibility of raising prices for high-end MLCCs required for AI servers. Order volumes for high-end MLCCs from customer inquiries are double their production capacity.
Samsung: Has plans for price increases, following industry trends.
Yageo: Plans price increases after the Lunar New Year.
Mainland China: Fenghua Advanced Technology is in price negotiations with customers. Three-Circle (Samsung) is reducing distributor rebates. Jiemei Technology is in price negotiations with customers for its paper-based carrier tapes.
Currently, the overall industry utilization rate is around 80%, with healthy inventory levels of 1.5-2 months. The trend is expected to continue after the Lunar New Year.
Electronic Component Inflation Logic Transmission
Driven by AI computing power demand, utilization rates at major Japanese and Korean MLCC manufacturers have continued to rise to 90%+, reaching a critical point where price increases are imminent. Samsung Electro-Mechanics, Murata, and domestic distributors have seen spot price hikes of 20%. Overall channel inventory is less than one month, shifting from healthy inventory levels to a state of shortage.
Reviewing the upward cycle of 2021, the current conditions in terms of price, utilization rates, and inventory cycles are all favorable for price increases. Utilization rates at major manufacturers are nearing full capacity. AI computing power accounts for 10-15% of the MLCC exposure, with related demand expected to double consecutively in 2026 and 2027, leading to a widening supply-demand gap in the industry. Analogous to the memory cycle, high-capacitance MLCCs for AI will likely crowd out a significant portion of production capacity, gradually driving shortages and price increases for standard models.
The main raw materials for MLCCs are ceramic powder (40%), nickel powder (20%), silver powder (20%), and labor/others (20%). Prices for ceramic powder and nickel powder remain relatively stable, with only silver paste prices having a minor impact on costs and capacity. Assuming a 30% average annual price increase for MLCCs, this could boost profits for Three-Circle Group (with 4.5 billion CNY in MLCC revenue) by approximately 600-700 million CNY, and for Fenghua Advanced Technology (2 billion CNY from MLCCs, 2 billion from resistors) by approximately 400-500 million CNY.
Recommendations for Attention:
[Three-Circle Group (Samsung)] : Domestic leader in high-capacitance MLCCs, benchmarked against overseas Japanese and Korean leaders.
[Fenghua Advanced Technology] : Leader in general-purpose MLCCs, offering the greatest elasticity for price increases(can refer to historical cycles of 2018 and 2021).
[Sinocera (Danzhou) Materials] : Global leader in ceramic powder, main supplier to Samsung and Three-Circle.
[Bojan New Materials] : Global leader in nickel powder, primary supplier to Samsung Electro-Mechanics.
Elasticity Calculation: Based on a 20% estimated price increase:
Three-Circle's MLCC revenue is projected at 4 billion CNY for 2026, with a profit increase of over 600 million CNY.
Fenghua's MLCC revenue is projected at 2.7 billion CNY for 2026, with a profit increase of over 300 million CNY (however, inductors and resistors are also increasing in price).
Jiemei Technology's carrier tape costs are primarily paper pulp; price increases essentially translate directly to profit increases.
