AI Boom Triggers MLCC Supply Crunch, Downstream Clients Compete to Sign Long-Term Contracts to Lock in Production Capacity.
1 hours ago
Driven by strong AI demand, the passive components market is recovering, with multilayer ceramic capacitors (MLCCs) facing supply tightness. To secure supply, some customers are scrambling to place orders with major passive component makers like Yageo and Murata at two to three times the original price, sparking a bidding war where the highest bidder gets the goods, with lead times extended to 12–16 months. Yageo stated that MLCC demand is extremely robust, with production line utilization rates continuing to climb; this quarter, utilization for standard products will rise from around 80% to over 90%, while that for specialty products remains high, bringing overall operations close to full capacity. More and more AI-related customers are seeking to lock in production capacity for half a year or even years in advance via long-term contracts to reduce supply risks. The company is responding by expanding production sites in Kaohsiung, Suzhou, Vietnam, and Mexico. Industry sources note that large MLCC manufacturers prioritize major clients and long-term partners, leaving small and medium-sized customers with squeezed supply, forcing them to bid up prices to secure goods. Japanese giants Murata and Taiyo Yuden have also revised their outlooks upward, noting that demand for AI servers and data centers has exceeded expectations, driving increased usage of high-capacitance products.
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