Recently, Hideo Tanimoto, president of Kyocera Corporation, a major Japanese MLCC company, announced that in order to meet the increasing demand for multilayer ceramic capacitors (hereinafter referred to as: MLCC), it will invest 15 billion yen (about 730 million yuan) in Luer, Japan. The 5-1-2 factory will be built in the island country branch factory area, and the goal is to increase its MLCC production capacity by 20%. Construction of the new plant will start in February 2023 and start production in May 2024.

MLCC is called "industrial rice", and its application fields are extremely wide. The applications in the hottest automotive electronics and data center fields are constantly being tapped, and the demand is still surging, pushing MLCC to the top.

However, due to the recent decline in demand for smartphones, tablets, and PCs, the consumer electronics market continues to weaken, and the MLCC market has also been affected, making it difficult to control the overall market trend. But this does not seem to shake the confidence of major manufacturers in MLCC, and they are all taking the expansion of MLCC as their top priority.

Market demand diverges

Ceramic capacitors, as basic passive components, account for nearly 56% of the capacitor market. Among them, MLCC accounts for more than 90% of the ceramic capacitor market because of its excellent high temperature resistance, high voltage resistance, small volume and wide capacitance range.

Chen Yongxue, director of the strategic development center of Yuyang Technology, a leading domestic electronic component company, and vice president of the vehicle business department, once said that the importance of MLCC is increasing day by day. Without MLCCs, chips such as CPUs, DSPs, GPUs, FPGAs, etc., produced using the most advanced semiconductor processing technologies, cannot perform at their best. The history of MLCC is "the history of miniaturization and large-capacity".

MLCC market applications are mainly distributed in smart phones, automotive electronics, home appliances, industrial control, data centers and other fields. Especially in the hottest field of automotive electronics, Bu Rixin, general manager of Chuangdao Investment Consulting, introduced: "MLCC is in great demand in the automotive electronics market. A single fuel vehicle needs about 3,000 ~ 4,000 MLCCs, while a new energy vehicle needs as many as 17 ~ 18,000 MLCCs, mainly high-end models."

According to China's "Industrial Development Plan of New Energy Automobile Industry (2021-2035)", by 2025, the sales volume of new energy vehicles in China will reach about 20%. At present, this figure is only 5%, and the development prospect of new energy vehicle market is huge.

Kyocera said that demand for MLCCs is expected to continue to expand due to upgrades in ADAS (advanced driver assistance systems) and EV technologies.

The world's largest MLCC supplier, Murata Manufacturing, released its financial report for the second quarter of 2022 on July 29, showing that its MLCC business revenue is still growing. And said that if the semiconductor procurement of the automotive industry goes smoothly, the demand for MLCCs will increase.

Although the MLCC market is hot due to the surge in demand for automotive electronics, the MLCC market with consumer electronics as the main battlefield has also fluctuated due to the recent decline in inventory and demand for consumer electronics.

According to the latest data released by Canalys, in the second quarter of 2022, global smartphone shipments decreased to 287 million units. Counterpoint expects that the global mobile phone market will drop by 8% in 2022 compared with 2021. From 2023, the mobile phone market will Maintain low single-digit growth rates. TrendForce research shows that the average inventory level of consumer-grade MLCCs in each size is more than 90 days.

"Affected by the relationship between market supply and demand, the price of standard MLCC products has gradually decreased, and the price of high-end MLCC products has remained strong." Chi Xiannian, a first-level consulting expert at CCID Consulting's Integrated Circuit Industry Research Center, pointed out.

It can be seen from this that although the recent price trend of MLCC is still affected by the overall prosperity of the electronic component industry and the periodicity of downstream consumer electronics, the downstream demand is weak, which is then transmitted to the upstream. However, rising demand in areas such as automotive electronics is expected to keep the market stable

Major companies actively expand production

Although the current MLCC market situation is not stable, major MLCC manufacturers around the world are still actively expanding production.

As a major producer of MLCC in Japan, it occupies more than 50% of the global market share, and the expansion of production is also the most active. In addition to Kyocera, Murata Manufacturing Co., Ltd. previously announced that it would increase its capital by another 12 billion yen (about 590 million yuan) to build a new factory in Iwami Factory of Izumo Murata Manufacturing Co., Ltd., a subsidiary, and continue to increase production of MLCC. It is planned to start construction in March 2022, and the construction is expected to be completed in April 2023.

Sun Youdian Company expanded its production even more. In June 2021, it announced that it planned to build a new factory of MLCC materials and produce barium titanate in the factory area of Baguayuan, which is expected to be completed in December 2022. In September 2021, the company announced that it would invest about 18 billion yen (about 880 million yuan) to build a new MLCC factory in its subsidiary in Sarawak, Malaysia, which is expected to be completed in March 2023; In November, 2021, it indicated that it would build a new MLCC factory in its subsidiary Sun Induction (Changzhou) Electronics Co., Ltd. to increase the production of MLCC, which is expected to be completed in June, 2023.

South Korea's Samsung Motor did not show weakness. Samsung Motor President Qing Guixian said at the shareholders' meeting in March 2021 that he would lead Samsung Motor to leap to the global MLCC leader by 2025. This year, he will publish the first MLCC for vehicles, and expand the production capacity of Tianjin plant in China to strengthen the supply capacity, but did not disclose the specific production capacity after the expansion.

The market will return to stability in the future.

Under the current market situation, in the short term, more MLCC production capacity will turn to the automotive electronics and industrial control markets. Compared with the consumer electronics market, the performance requirements of MLCC in these fields are higher, the preparation cost of MLCC becomes higher, and the structural gap between supply and demand will still exist in the short term. In the incremental markets such as automobiles and industrial control, the price of MLCC will rise in the short term. However, with the development of automotive, industrial control, consumer electronics and other markets in the future, higher requirements are put forward for MLCC. Zhang Xianyang predicts that the key technology trends of MLCC in the future include miniaturization and thinness, high capacity, high frequency and high temperature, high voltage resistance and high reliability.

Buxin said that at present, it is difficult for smart phones to have new consumption stimulus points in a short time, and the demand for MLCC from automotive electronics will increase substantially in the future. As infrastructure, high-performance computing will also have a pulling effect on the demand for MLCC, but in terms of overall quantity, there is no way to compare it with smart phones. It will not be the norm for MLCC to increase the price due to shortage. This is a market with relatively stable production capacity and demand. In the future, with the balance between supply and demand, it will definitely return to the state before the price increase and shortage tide.

Source：CHINA ELECTRONICS NEWS、www.cena.com.cn