Author: Junxi
On September 14, Murata Manufacturing, the global leader in MLCCs, revealed that it is studying a new round of capacity expansion over the next three to five years, with a scale that may be "bolder than ever." The multi-layer ceramic capacitors produced by this Japanese electronic component manufacturer are widely used in devices such as smartphones and servers, performing tasks like energy storage, filtering, and stabilizing power supply. Masanori Minamide, Executive Vice President, stated that the company had originally planned its factory capacity based on 2028 demand, but customer orders indicate that the market may continue to expand beyond that.
Prior to this round of investment, which is still under evaluation, Murata already had an arrangement in place: over the two years up to fiscal 2027, it will invest approximately 80 billion yen in MLCC production equipment, increasing its fiscal 2027 capacity by over 20%. However, the current market is already experiencing declining inventory, extended lead times, and price hikes. The news of capacity expansion has not yet translated into new supply, but customers have already begun to renegotiate prices for existing capacity.
More notably, price adjustments are not limited to server products. Some consumer-grade MLCCs have also been included in the price hike scope, as manufacturers hope to use this to adjust orders and production resources. The context of Murata's capacity expansion has extended beyond high-end demand growth to a further reallocation of capacity among different products.
01. Consumer-Grade Products Also Begin to See Price Adjustments
Samsung Electro-Mechanics is expanding the scope of its price hikes from distributors to OEMs and contract manufacturers. According to research by TrendForce on August 27, the average price increase for its fourth-quarter consumer-grade X5R products is expected to be 25% to 30%, while high-end X6S products used in AI servers will see a 10% to 20% increase, depending on customer negotiations. At that time, Murata, Taiyo Yuden, and Kyocera still maintained their prices, and a synchronized price adjustment among major suppliers had not yet materialized.
The expected price increase for consumer-grade products is actually higher, and the reasons include proactive adjustments on the supply side. TrendForce pointed out that Samsung Electro-Mechanics hopes to control these orders through price hikes, freeing up resources for the expansion of high-end production lines. Even if general end-market demand has not shown a significant recovery, it may still face price increase pressures due to the reduction in allocable capacity. This represents a different market dynamic from the inventory restocking driven by the general rise in smartphone and PC sales.
The buffer space in the distribution channel is also shrinking. UBS tracking of over a hundred distributors shows that MLCC inventory levels on August 9 dropped by about 8% compared to July 11, while the price index rose by approximately 7% over the same period. This result reflects the sampled channels and cannot be directly equated to the inventory status of all original manufacturers across all specifications, but it is sufficient to indicate that spot goods readily available for procurement are decreasing.
Murata's capacitor business revenue from April to June grew by 30% year-on-year; Samsung Electro-Mechanics' component business revenue in the second quarter grew by 29% year-on-year, driven by server and network-related demand. The expansion of high-value-added product sales is translating demand changes into revenue growth for original manufacturers. As manufacturers allocate more resources to servers, they also gain direct financial motivation.
Customers, on the other hand, are beginning to extend their procurement guarantees to the next year. A supply agreement for AI server MLCCs disclosed by Samsung Electro-Mechanics in early September, valued at approximately 1.07 trillion KRW, covers the entire year of 2027. Long-term agreements provide suppliers with a basis for capacity expansion and also secure destinations for some future capacity in advance. For companies that still rely on short-term orders for procurement, how much they can get after new capacity is added will also depend on previous customer arrangements.
02. From Chip Peripherals to Server Power Supplies
On September 16, Samsung Electro-Mechanics unveiled a capacitor solution for megawatt-level racks, with discussions specifically focusing on how to place capacitors around GPUs. As chip power consumption increases, the area available for power supply near the package has not expanded proportionally; vertical power delivery will further change component layout, requiring capacitance, size, and inductance to be considered together.
In simulations under its given conditions, the imperial 0402 size, 47-microfarad MLCC achieved a better overall performance. The smaller 0201 products help reduce parasitic inductance but lack sufficient capacitance density; the larger 0603 products can provide higher capacitance but at the cost of inductance. Mixing different sizes is not necessarily the more, the better; configuration must be based on the actual impedance of the power delivery network.
Even with the same nominal 47 microfarads, differences in size, electrical performance, and mounting position may prevent two capacitors from being directly interchangeable. The "high-end MLCCs" required by servers are actually a set of design requirements that must be met simultaneously. Capacity expansion ultimately needs to correspond to specific specifications, and inventory of general part numbers cannot automatically fill the demand for new platforms.
Moving up the power delivery path, product upgrades present another direction. On September 8, TDK launched a 100V, 10-microfarad soft-terminal MLCC, planned for mass production in the same month, with one of its main applications being the 48V power line in AI servers. The new product doubles the capacitance of the original product at the same size, reduces resistance through electrode structure optimization, and simultaneously mitigates the risk of cracking caused by mechanical stress.
According to TDK's application notes, when corresponding design conditions are met, the new product can reduce the number of capacitors required in the mounting area. Therefore, the market growth of server MLCCs cannot be explained solely by "how many more are installed per unit." Upgrading a single component can reduce usage in some positions but increases the requirements for manufacturing processes; new demand and device integration occur simultaneously, so the number of units shipped and sales revenue may not grow at the same rate.
Samsung Electro-Mechanics also introduced low-profile and embedded MLCC solutions on September 16, placing some capacitors inside the circuit board to save surface space and shorten the power delivery path. The connection between MLCCs and chip power supply design is thus closer, and competition gradually involves board-level layout and package space, rather than just how many capacitance values can be offered in the catalog.
Facing higher-voltage server power supply architectures, Samsung Electro-Mechanics introduced kilovolt-level MLCCs compatible with 800V DC systems in July and is evaluating next-generation products. This corresponds to the rack power supply side, which is at a different level from the low-voltage power supply of the GPU core. Its technical notes specifically compare two types of ceramic materials: one with stable capacitance and low heat generation, and the other that is easier to achieve small size and large capacitance but requires consideration of the impact of operating voltage and temperature on actual capacitance. Within the same data center, the upgrade direction for MLCCs is not limited to high capacitance.
03. Capacity Expansion Extends to Powder and Manufacturing Processes
The new round of expansion proposed by Murata includes the possibility of building larger-scale factories at existing sites both in Japan and overseas. However, factories are merely spaces to house production. The company's publicly disclosed manufacturing system shows that the production engineering department intervenes early in new product development, simultaneously developing processes and in-house equipment, and establishing an integrated manufacturing process from materials to finished products.
This organizational approach is related to the structure of MLCCs. TDK's technical materials introduce that the product forms a capacitor by alternately stacking ceramic dielectrics and internal electrodes. Advanced processes can make the dielectric layer sub-micron level, with stacking reaching about a thousand layers. To increase capacitance within a limited volume, materials, thin-layer forming, and stacking precision must work in tandem; it is not enough to simply add end-of-line assembly equipment. Maintaining reliability with thinner dielectrics and more layers requires the refinement of material particles and precise interlayer positioning, which are the foundations for product miniaturization.
Corresponding investments have already emerged upstream. Boqian New Materials disclosed on July 21 that it plans to invest a total of approximately CNY 202 million to build three projects, two of which are aimed at the fine classification of nano metal nickel powder and the capacity expansion of fine classification of nickel powder of 200 nanometers and below. The company's previous capacity expansion announcements also clearly pointed out that the miniaturization and ultra-high capacitance development of MLCCs are driving the demand for small-particle-size high-end nickel powder.
These projects do not point to the expansion of general metal raw materials, but rather to powder processing capabilities that meet the manufacturing requirements for thinner internal electrodes. Material suppliers need to keep up with the specification upgrades of component manufacturers, while component manufacturers need to combine new materials, equipment, and processes into stable production flows. Relying solely on factory floor space or total capacity in terms of unit count, it is difficult to judge how much supply of target specifications an enterprise can actually increase.
Jiemei Technology also announced on August 17 an additional investment of approximately CNY 428 million, planning to increase the planned annual capacity of release film for its North China Production and Research Headquarters Base project to 768 million square meters. Release film is a process consumable in MLCC production and does not remain in the final component. As component output increases and thin-layer processes upgrade, the supply and performance of corresponding consumables also need to keep pace. The simultaneous investment in nickel powder and release film is providing support for the subsequent production increases of component manufacturers.
04. Domestic Manufacturers Face Different Opportunities for Taking Orders
Chaozhou Three-Circle (Group) disclosed in its 2026 semi-annual report that prices for some MLCC specifications have recovered, with sales volume and revenue growing year-on-year. Its high-capacity MLCC capacity expansion project has accumulated an investment of approximately CNY 1.861 billion, with the investment progress nearing halfway, and is planned to reach the intended usable state by the end of May 2027. The original timeline for this 2021 fundraising project was 2025, but it was later delayed due to changes in the external environment. The construction of domestic high-capacity production has also undergone cyclical adjustments.
Fenghua Advanced Technology's investor communication in September presented another path. The company stated that the Xianghe Industrial Park project has reached full production capacity, and is currently focusing on adjusting its internal product structure. In the first half of the year, high-end products accounted for about 40% of MLCC business revenue. The product layout in the server field includes categories such as high capacitance and medium-to-high voltage, with some products already used in server multi-phase power modules.
In the introduction of these server products, Fenghua Advanced Technology emphasized low equivalent series resistance (ESR) and long-term reliability under operating conditions above 105 degrees Celsius. The company also simultaneously provides alloy resistors for current sensing, adapted for high-current, high-power-density power supply systems. For enterprises with multiple product lines such as capacitors and resistors, the entry point for supplying server customers can therefore cover multiple components, rather than just focusing on one type of high-capacitance capacitor around the GPU.
However, server power supply covers different voltage and mounting stages. Entering one of these positions does not mean that the capability to substitute the entire set of high-end products has been achieved. The high-end revenue disclosed by Fenghua Advanced Technology also includes medium-to-high voltage and automotive-grade products, and the specific proportion of AI business was not given separately. Evaluating the progress of domestic manufacturers requires looking at which models are already being supplied and which are still undergoing customer certification, rather than judging the technological gap solely based on the "proportion of high-end products."
The capacity adjustments by overseas manufacturers also bring opportunities for domestic suppliers to take on medium-to-high capacitance consumer-grade orders. TrendForce pointed out that the spillover of related orders is driving up the capacity utilization rate of some manufacturers in mainland China and the Taiwan region. For these enterprises, recent delivery and cost advantages can be translated into new orders; whether they can retain customers after supply recovers depends on whether product performance, batch consistency, and subsequent specifications can be continuously followed up.
05. Conclusion
Murata is brewing larger-scale investments, Samsung Electro-Mechanics is adjusting quotes and signing long-term agreements, and domestic manufacturers and upstream material enterprises are advancing capacity expansion. The changes in the MLCC market have gone beyond channel inventory restocking. However, the time when new factories release supply may not necessarily align with the iteration time of chip platforms. If the new capacity matches customer demand, the delivery pressure for high-end products will gradually ease; if procurement slows down or specifications change, the production resources already invested may also face reallocation. The current tension is not yet sufficient to guarantee that every type of MLCC can enjoy an equally long growth cycle.