AI Boom Fuels Surge in Demand for Multilayer Ceramic Capacitors
Quick Look
- Demand for multilayer ceramic capacitors (MLCCs) is surging due to the AI boom, with AI servers requiring significantly more MLCCs than traditional ones.
- Manufacturers are prioritizing high-end supply, leading to price increases.
AI-generated summary
Why It Matters
Demand for multilayer ceramic capacitors (MLCCs) is surging due to the artificial intelligence boom, which is driving new production. MLCCs are crucial electronic components used in various devices, including smartphones and electric vehicles, and are increasingly deployed in high-performance AI servers.
Demand for multilayer ceramic capacitors (MLCCs), tiny electronic components found in everything from smartphones to electric vehicles, is surging as the artificial intelligence boom triggers new production.
MLCCs, which act as electrical buffers in circuit boards, are increasingly deployed in massive volumes in high-performance servers, emerging as the latest AI-driven investor darling following memory chips and optical modules.
The AI hardware boom was squeezing production capacity as MLCC manufacturers prioritised high-end supply for data centres over consumer-grade capacitors, prompting suppliers to raise prices, TrendForce, a market research firm based in Taipei, said in a report released on Monday.
An AI server, densely packed with graphics processing units, consumes up to 10 times more power than a traditional server, and requires up to 28,000 MLCCs per unit, a 13-fold increase from a standard set-up, China Securities said in a research note issued last week.
The MLCC industry was poised for explosive growth, China Securities said – “potentially repeating the ‘growth miracle’ previously seen in the optical module sector”.
The global MLCC market is dominated by Japanese and South Korean manufacturers, led by Murata Manufacturing and Samsung Electro-Mechanics (SEMCO), which have a tight grip on the high-end capacitors used in AI servers.
What to Watch
AI outlook — possibilities, not facts
The MLCC industry will experience explosive growth, potentially repeating the 'growth miracle' seen in the optical module sector.
Likely · Medium term
Open Questions
- What is the specific timeline for the 'growth miracle' in the MLCC sector?
- What are the exact price increases for consumer-grade capacitors?
- Are there any emerging competitors to Japanese and South Korean manufacturers?
- What is the projected total number of MLCCs needed for the global AI server market?
