1. What Are Passive Components?
All electronic components in daily life can be divided into two main categories: active components and passive components.
• Active Components: Electronic components that can independently perform computations and signal processing, such as CPU processors and various IC (Integrated Circuit) chips.
• Passive Components: Primarily play a supporting and protective role for active components, ensuring their stable operation by regulating voltage, filtering noise, and other methods.
The core differences between the two are as follows:
▲ Classification of Electronic Components
Passive components are mainly divided into two categories: RCL components and integrated components. RCL is the collective term for resistors (Resistance, R), capacitors (Capacitance, C), and inductors (Inductance, L), contributing about 90% of the total output value of the passive component market; integrated components mainly focus on applications such as filters and oscillators, accounting for about 10% of the total output value.
2. Detailed Analysis of the Three Major Categories in the RCL Market
According to statistics from the IMARC Global Passive Components Report, in the overall RCL market, capacitors account for the highest proportion at 55%, followed by resistors (29%) and inductors (16%).
1. Resistors (Resistance, R)
Resistors are mainly used in circuits to regulate and stabilize current and voltage. They can serve as shunts, voltage dividers, or be used for load matching in circuits. Resistors are generally divided into three categories: fixed resistors, variable resistors, and special resistors, among which fixed resistors are the most widely used in electronic products.
Given the deployment of high-end applications such as 5G communications and IoT (Internet of Things), terminal electronic products are steadily evolving towards being 'lighter, thinner, shorter, smaller, and more efficient,' driving continuous advancements in SMD Resistor technology. The market expects the SMD resistor market to achieve a year-over-year growth rate of 5.2% from 2021 to 2027, which will be the core growth driver for the resistor sector in the future.
2. Capacitors (Capacitance, C)
Capacitors are the category with the largest market size and widest application in RCL. They consist of two metal electrodes on the top and bottom with an insulating dielectric in between. Their most basic characteristic is 'passing AC and blocking DC,' while also possessing functions such as signal coupling, temperature compensation, rectification, and energy storage.
Depending on the intermediate dielectric, capacitors can be classified into ceramic capacitors, aluminum electrolytic capacitors, film capacitors, and tantalum electrolytic capacitors. Among them, the MLCC (Multi-Layer Ceramic Capacitor) is the most watched category in the industry and also the highest output value product line in the capacitor market—it accounts for over 90% of the ceramic capacitor market, more than 45% of the overall capacitor market, and over 33% of the entire RCL market.
According to Market US data, the global capacitor market output value shares in 2025 are: ceramic capacitors 58.5%, tantalum capacitors 16%, aluminum capacitors 15.1%, and others 10.4%.
▲ Global Capacitor Market Output Value Share in 2025 (%)
3. Inductors (Inductance, L)
Inductors are generally coils wound with enameled wire or other conductors on an insulating skeleton, magnetic core, or iron core. Their main functions are to isolate AC signals, filter, or form resonant circuits with capacitors and resistors. Inductors are also one of the basic components in electronic circuits, accounting for about 10% to 15% of the supporting usage of electronic components.
▲ Global RCL Market Capitalization Share in 2025 (%)
In terms of overall market size, the global passive component market output value is expected to grow from $35.89 billion in 2025 to $47.84 billion in 2030, indicating strong long-term growth certainty.
3. What Is MLCC? Why Has It Become the Core Track in the Industry?
MLCC stands for Multi-Layer Ceramic Capacitor, also commonly referred to as a chip capacitor. It has become the industry focus because it possesses physical characteristics such as high voltage resistance, high-temperature resistance, a wide operating temperature range, and low loss in high-frequency scenarios. At the same time, it can achieve miniaturization, low cost, and high stability, making it highly suitable for large-scale mass production.
In recent years, with the popularization of NEVs (New Energy Vehicles) and autonomous driving vehicles, the usage of passive components in the automotive sector has surged: a traditional ICE vehicle requires only about 2,000 passive components per unit, while in the NEV era, the usage per unit can reach nearly 10,000.
Murata Manufacturing, the global MLCC leader, invested nearly $1 billion in 2019 to expand the capacity of high-end ceramic capacitors, while simultaneously reducing the capacity for general-purpose MLCCs for PCs and smartphones. Murata's capacity adjustment signaled to clients a reduction in the production of 'legacy products,' leading to a massive shift of general-purpose orders to Taiwanese, South Korean, and mainland Chinese manufacturers, which also became a crucial catalyst for the subsequent upswing in the MLCC industry's prosperity.
▲ Global MLCC Market Share
4. Passive Components: Possessing Typical Price Hike Cycle Attributes
Looking at the development of the passive component industry over the past 20 years, five price hike cycles can be roughly summarized:
1. 2003-2005: Benefiting from the economic recovery after the US internet bubble crisis, the industry entered a price hike cycle.
2. 2006-2008: Driven by the miniaturization and thinning trends of terminal consumer electronics such as mobile phones, tablets, and digital cameras, the demand for small, high-efficiency passive components surged.
3. 2009-2010: The economic recovery after the global financial crisis boosted demand recovery.
4. 2017-2018: Official Japanese data showed that the cumulative increase in MLCC export prices reached 94% in 2017-2018, triggering a centralized stockpiling wave among manufacturers. Related stocks recorded their most dramatic gains in nearly 20 years.
5. 2021: Benefiting from demand growth in NEVs, industrial computers, and other sectors, coupled with stockpiling strategies adopted by leading manufacturers, the market experienced supply-demand imbalance, driving up prices for all categories of passive components.
Passive components themselves possess the characteristics of 'low unit price and high usage volume.' Their core function is to protect the more expensive active components in the circuit. Precisely because of the large usage base, an effective increase in product quotations can bring significant profit elasticity to manufacturers.
Reviewing past price hike cycles, apart from macroeconomic factors (such as the market crashes in 2000 and 2008), most obvious price increases were driven by supply-demand imbalances leading to product price hikes. The core driver of this round of price increases is the rise in upstream raw material costs. Manufacturers find it difficult to absorb the cost pressure, thus restarting price negotiations.
5. Future Outlook for the Passive Component Industry
1. Continuous Miniaturization of Products
As mobile phones enter the 5G era, each device requires more powerful processors. Meanwhile, consumers' demands for lighter and more portable phones are steadily increasing, making the miniaturization of passive components an inevitable trend.
Taking the global MLCC leader Murata Manufacturing as an example, it customized 0201M size, 0.1μF specification MLCCs for 5G phones. Compared to the previous 0402M size products with the same capacity, the mounting area is reduced by 50%, and the volume is shrunk by about 20%. Besides MLCCs, resistors and inductors are also developing towards miniaturization and high performance, which will be the development tone for the entire industry in the future.
2. Technological Upgrades Drive the Explosion of High-End Application Demand
According to forecasts by Global Information, the global capacitor market size will grow from $26.7 billion in 2025 to $35.56 billion in 2030, with a CAGR (Compound Annual Growth Rate) of 5.89%. The core growth comes from three major drivers: NEVs, 5G infrastructure, and AI data centers, completely changing the past seasonal cyclical characteristics of passive components fluctuating with mobile phone sales.
• NEV Sector: Driven by global environmental protection policies, the transition from ICE vehicles to NEVs is accelerating. The MLCC usage in a pure electric vehicle exceeds 15,000 units, which is more than four times that of an ICE vehicle. In particular, the popularization of 800V high-voltage power systems drives the demand growth for high-voltage film capacitors and components with AEC-Q200 automotive-grade certification, promoting a structural increase in the ASP (Average Selling Price) of automotive-grade products.
• 5G and Optical Communications: The deployment of global 5G networks and FTTx all-optical networks increases the demand for high-frequency, low-loss MLCCs. It is estimated that by 2029, 75% of global data will be transmitted via 5G. Massive MIMO (Multiple-Input Multiple-Output) increases the demand for ultra-small components (such as the 006003 specification, which is 75% smaller than traditional products), giving technologically leading manufacturers higher pricing power for profits.
• AI Data Centers and Edge Computing: AI accelerators have extremely high requirements for PCB (Printed Circuit Board) space, increasing the configuration density of high-reliability ceramic capacitors and polymer aluminum capacitors by about 25%. The passive component usage of a single AI server is 3 to 5 times that of a traditional server. Taking the NVIDIA GB200 NVL72 full rack as an example, the total usage of high-end MLCCs reaches as high as 440,000 units. The strong high-end demand effectively frees high-end passive components from the industry cycle constraints of consumer electronics.
Reference for passive component usage in different terminal scenarios:
6. Overview of Core Global Passive Component Manufacturers
The global passive component industry presents a competitive landscape of 'Japanese companies dominating the high-end, Taiwanese companies occupying the mid-to-high-end, and mainland Chinese companies accelerating domestic substitution.' Japanese manufacturers rely on material and process advantages to monopolize the high-end automotive-grade and AI computing power markets. Taiwanese manufacturers have scale advantages in the mid-to-high-end general-purpose product field. Mainland Chinese manufacturers rely on the local terminal market to rise rapidly, achieving autonomous and controllable production in the low-to-mid-end market and continuously breaking through into the high-end field. The core representative manufacturers are categorized as follows:
Full-Category Layout of Resistors, Capacitors, and Inductors
Murata Manufacturing (Japan)
The absolute global leader in passive components, with a global MLCC market share of about 39%. It leads globally in high-end materials and miniaturization technology, deeply binding with top clients in AI servers and automotive electronics.
TDK (Japan)
The global leader in inductors, also deploying in MLCCs, film capacitors, and magnetic components. It possesses extremely strong technical barriers in the high-end markets of automotive, industrial, and communications.
Yageo (Taiwan, China)
The world's largest resistor manufacturer and the second-largest MLCC manufacturer. After acquiring Kemet, it has completed its tantalum capacitor product line, covering consumer, industrial, and automotive scenarios.
Fenghua Advanced Technology (Mainland China)
The only domestic platform-type leader covering the full categories of resistors, capacitors, and inductors. Its MLCC and chip resistor capacity leads domestically, and its products have passed AEC-Q200 automotive-grade certification.
Multi-Layer Ceramic Capacitors (MLCC)
Samsung Electro-Mechanics (South Korea)
With a global MLCC market share of about 19%, ranking second. It has outstanding technical strength in high-capacitance and automotive-grade MLCC fields, deeply supporting the South Korean automotive and consumer electronics supply chains.
Taiyo Yuden (Japan)
A top global MLCC manufacturer with a market share of about 12%. It has significant advantages in high-frequency and high-reliability MLCC fields, focusing on the high-end communication and automotive markets.
Walsin Technology (Taiwan, China)
A core Taiwanese MLCC manufacturer, ranking among the top globally in market share. It mainly focuses on mid-to-high-end general-purpose and automotive-grade products, with outstanding supply chain response speed.
Three-Circle Group (Mainland China)
The domestic leader in MLCC revenue scale. It independently researches and produces ceramic dielectric powders, achieving vertical integration of the entire industry chain, with continuous breakthroughs in high-capacitance product technology.
Full-Series Chip/Special Resistors
ROHM (Japan)
The global leader in high-end resistors, leading in technology for high-precision, low-resistance, and automotive-grade special resistors, mainly targeting high value-added industrial and automotive markets.
Ta-I Technology (Taiwan, China)
A major Taiwanese resistor manufacturer with competitive advantages in segmented fields such as power resistors and alloy resistors.
Chip Inductors, Power Inductors
Sunlord Electronics (Mainland China)
The absolute domestic leader in inductors, ranking in the top three globally. It has significant advantages in automotive-grade and high-current inductors for AI servers, with clients covering global top terminal manufacturers.
Chilisin Electronics (Taiwan, China)
The Taiwanese leader in inductors and one of the 'Three Passive Component Heroes.' It has mature technology in molded and high-frequency inductors, deploying in consumer, automotive, and industrial fields.
7. Conclusion
In the past few years, the passive component industry has been in an overall inventory digestion cycle, with growth momentum mainly coming from the technological iteration of consumer electronics miniaturization. With the rapid explosion of three emerging tracks—NEVs, AI computing power, and 5G communications—the demand logic for passive components has completely broken away from the seasonal fluctuations of traditional consumer electronics, entering a long-term growth channel driven by high-end applications. Whether it is NEVs with several times the per-unit usage or AI servers consuming hundreds of thousands of high-end MLCCs per rack, they are continuously pushing up the overall prosperity of the industry and constantly expanding the terminal application boundaries of passive components.
From the perspective of supply and pricing, affected by the price increases of upstream raw materials such as barium titanate, palladium, and silver, as well as leading manufacturers concentrating their capacity on high-margin high-end products, the industry has currently formed a price transmission pattern of 'high-end leading the rise, followed by general-purpose products.' It is expected that in 2026, the industry will generally present a situation of moderate price increases coexisting with structural shortages. Manufacturers with high-end technical reserves will fully enjoy the price hike dividends and accelerate their transformation to high-margin tracks.
Looking at the global competitive landscape, Japanese manufacturers firmly occupy the dominant position in the high-end market relying on their technological accumulation, while South Korean and Taiwanese manufacturers have significant scale advantages in the mid-to-high-end mass production field. With the acceleration of domestic substitution, mainland Chinese manufacturers have achieved a high self-sufficiency rate in the low-to-mid-end market and are gradually breaking through into high-end products such as automotive-grade, industrial-grade, and AI computing power-grade. They are expected to seize more market share in this round of industry structural upgrade, ushering in dual development opportunities of technological upgrade and market share increase.
About XinZhiYun SMCC
XinZhiYun Electronic Distribution is committed to providing customers with one-stop electronic component supply chain solutions, including supporting services for scarce materials, long-term material price optimization, and handling services for stagnant materials. Adhering to the principle of 'Quality First, Customer Foremost,' XinZhiYun is willing to cooperate closely with clients from all walks of life and grow together.