Morgan Stanley: AI Servers Boost Demand for High-End MLCCs, Murata Emerges as Top Choice for Japanese Electronic Components

On June 17, Morgan Stanley noted that AI servers and data centers will fuel explosive demand growth for high-end multilayer ceramic capacitors (MLCCs). Murata Manufacturing Co., Ltd. stands out as the top pick in Japan’s electronics components sector, thanks to its ability to consistently mass-produce small, high-capacity MLCCs—an edge no peer has matched yet. In a June 16 research report, analysts including Shoji Sato sharply raised Murata’s price target from ¥5,100 to ¥12,500, maintained an Overweight rating, and named the Japanese firm their industry Top Pick. The report projects Murata will hold a 40.8% share of the global MLCC market by 2025, outpacing rivals Samsung Electro-Mechanics and Taiyo Yuden. Morgan Stanley forecasts global MLCC shipment values will jump from $14.67 billion in 2025 to $24.25 billion in 2028, translating to a 18.2% compound annual growth rate (CAGR) over the three-year period. Demand for small, high-capacity, high-value MLCCs tailored to AI servers and data centers is expected to grow at roughly a 100% CAGR. AI server motherboards require 15,000 to 25,000 MLCCs—about 10 times more than standard general-purpose servers. As GPUs, CPUs, and ASICs consume more power while operating at lower voltages, systems need improved transient power supply stability and noise suppression. This is pushing MLCCs to evolve into smaller sizes and higher capacities, a shift only a handful of firms can execute at scale right now. Morgan Stanley identifies Murata as the clear biggest beneficiary here. The firm points out that right now, only Murata can reliably mass-produce the critical specs AI servers need: 1608-sized 100µF MLCCs, 1005-sized 47µF units, and 0603-sized 10µF MLCCs. By the time rivals nail down stable mass production of these parts, Murata will likely have already moved on to smaller, higher-capacity next-generation products. Meanwhile, Morgan Stanley cut Taiyo Yuden’s rating from Equal-weight to Underweight, though it did lift the firm’s price target from ¥4,700 to ¥12,500. Taiyo Yuden’s stock has surged roughly 445% since 2026, and the market expected it to grab a slice of AI-driven high-end MLCC demand like Murata. But Morgan Stanley argues the Japanese firm will see only limited profit gains from improving its product lineup. Finally, the MLCC investment thesis isn’t just about price increases—the same product line’s price will likely trend lower over time. What actually underpins profitability is the product mix upgrade driven by AI and data center demand. Morgan Stanley believes that as high-end MLCCs make up a larger share of total output, the profit margin gap between Murata and its competitors will only widen further.