GF Securities has released a research report highlighting the explosive demand for Multi-Layer Ceramic Capacitors (MLCCs) driven by the evolution of AI servers. The current surge in computing power requirements is leading to a multiplicative increase in MLCC usage per unit and a shift towards higher-end products, jointly propelling both the volume and price of MLCC demand. On the supply side, capacity expansions by Japanese and Korean manufacturers remain generally orderly, and this capacity may struggle to fully meet the rapidly growing demand, presenting an entry opportunity for domestic manufacturers. The report emphasizes the critical importance of core raw materials, specifically ceramic powder. The fineness, uniformity, and reliability of the electronic ceramic powder used in MLCCs directly determine the size, capacitance, and performance stability of the final MLCC products, forming the core barrier for high-end MLCCs.
GF Securities' key viewpoints are outlined below. MLCCs are used for functions like charge storage in electronic circuits and are widely applied in electronics, automotive, and defense sectors. As a type of capacitor, their primary roles include storing charge, AC filtering or bypassing, blocking DC current, and providing tuning and oscillation. Ceramic capacitors offer a wide range of applicable voltages and capacitance values, along with advantages such as a broad stable operating range, low dielectric loss, and small size, making them prevalent in military and consumer electronics applications. The global MLCC market is experiencing steady expansion, with growth in AI server usage due to artificial intelligence development and increased penetration of new energy powertrains and smart driving in the automotive sector. High-end applications like AI and automotive electronics are now the core growth drivers.
AI Server MLCC Demand Grows Exponentially, High-End MLCC Capacity Faces Structural Shortage
On the demand side, computing power needs are fueling robust demand for AI servers. MLCCs are crucial passive components in these servers, primarily serving for power decoupling and bypass filtering. As power module output rapidly increases, MLCC usage follows suit. According to TrendForce, a single Nvidia GB200 graphics card requires approximately 6,500 MLCCs, but the next-generation Rubin architecture will see this usage double to around 12,000. Concurrently, due to space and thermal constraints, MLCC demand is shifting towards miniaturization, higher capacitance, and higher reliability—essentially, higher-performance iterations.
On the supply side, manufacturing high-performance MLCCs involves significant barriers. The performance upgrade path follows the progression of "reducing powder particle size → thinning dielectric layers → increasing layer count → achieving high-precision lamination." The core barrier lies in the raw material powder. Currently, global market share is concentrated with Murata and Samsung Electro-Mechanics (accounting for about 85%), and capacity expansion by industry leaders is generally measured, leading to a tight supply situation in the short to medium term. Existing high-end capacity is insufficient to meet demand growth. Starting March 2026, overseas MLCC manufacturers like Murata and Taiyo Yuden have issued multiple price increase notices.
Lessons from Industry Leaders: Deep Production Understanding and Demand Tracking as Core Competitive Edges
Analyzing leading MLCC companies like Murata, the report posits that their mastery of core technologies—such as material formulation and dispersion techniques, thin-film layering technology, and firing processes—constitutes the essence of their product competitiveness. The high-volume, fast-iterating nature of downstream end-products for basic electronic components means that the ability to quickly identify and respond to customer needs becomes a primary competitive advantage. This requires sustained R&D investment and deep involvement in customers' early-stage product development.
Inspired by these industry giants, the report suggests that domestic MLCC manufacturers should focus on vertical integration across the entire manufacturing chain, particularly ensuring self-sufficiency and control in powder technology. Internally, they should invest heavily in R&D to build technological moats. Externally, they should proactively seek quality merger and acquisition opportunities for horizontal and vertical expansion. They must also seize the window of opportunity in emerging sectors and target high-growth market entry points.
The report recommends monitoring leading companies in the sector, such as Sanhuan Group, Sinocera Functional Material Co.,Ltd., China Zhenhua (Group) Science & Technology Co.,Ltd., Fenghua Advanced Technology (Holdings) Co., Ltd., Torch Electron Co.,Ltd., Hongyuan Electronics, Ningbo Boway Alloy Material Co.,Ltd., Jmei Evaporator Co.,Ltd., and Boje Electronics Co.,Ltd..
Risk factors include technology and product development risks, raw material price fluctuation risks, and risks associated with downstream market demand falling short of expectations.
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