Samsung Electro-Mechanics has started raising prices on multilayer ceramic capacitors, and its customers are rushing to sign long-term supply deals before the squeeze gets worse. Artificial intelligence is the reason.
MLCCs are tiny parts that regulate electrical current in nearly every electronic device. AI servers need them in large numbers, and in higher-performance versions built to run reliably under heavy load. Makers are shifting lines toward those premium parts, which leaves fewer mainstream ones for everything else. The result is odd: prices climb while demand for smartphones, PCs and other conventional electronics stays weak.
Murata prunes its catalogue
Murata Manufacturing, the world’s largest MLCC producer, has told customers it will discontinue selected part numbers across nine product series, industry sources said Thursday. The list covers general-purpose capacitors used in consumer electronics and industrial equipment, plus some automotive parts. Final orders are accepted until March 2028, and shipments stop a year after that.
Murata calls it a portfolio review meant to free capacity for other products. It has not said that capacity is headed for AI servers, though industry officials read it as part of a wider pivot to higher-margin AI components. “Murata and Samsung Electro-Mechanics are ultimately doing the same thing — making the products that generate better returns,” said an industry source familiar with Samsung Electro-Mechanics’ operations. “It is similar to Samsung Electronics and SK hynix prioritizing high-bandwidth memory.”
Orders outrun capacity
TrendForce, the market researcher, says Japanese and Korean makers have been moving capacity from consumer-grade X5R capacitors to the X6S and X7R grades used in AI. Orders now exceed what suppliers can fill. In June the book-to-bill ratio, where anything above 1 means new orders are outpacing shipments, stood at 1.30 for Murata, 1.31 for Samsung Electro-Mechanics and 1.25 for Taiyo Yuden. All three were the highest since the pandemic.
TrendForce calls it a structural mismatch. Demand for ordinary gadgets is soft, yet supply of mainstream parts is shrinking. “Those components are still needed in almost every electronic device, so lower supply leads to higher prices,” another industry source said. For the fourth quarter, TrendForce expects consumer-grade X5R prices for original equipment and design manufacturers to rise 25 to 30 percent on average. Premium X6S parts for AI servers are forecast to climb 10 to 20 percent.
Buyers lock in supply
Habits are changing. “Previously, they bought what they needed when they needed it,” the Samsung-linked source said. “Now they are signing long-term agreements to guarantee annual supply.” Prices are creeping up as buyers compete for volume.
Murata’s cuts will not hand Samsung Electro-Mechanics much new business, the source added, since the discontinued parts are not lines the Korean company wants to grow. “The immediate benefit is limited,” the source said. Its real prize is the premium end. Earlier this month it signed a 1.07 trillion won ($774 million) contract to supply MLCCs for AI servers to a global customer through 2027, its largest MLCC deal to date. It now holds long-term supply agreements with more than 10 global customers.
