The multilayer ceramic capacitor (MLCC) market, often referred to as the 'rice of industry', is enjoying a boom fueled by the artificial intelligence (AI) wave. MLCCs serve the role of eliminating signal interference and storing and supplying power within electronic devices. Although they are as small as a grain of rice cut into fifteen pieces, collecting enough for a wine glass (500㎖) can reach a price of 300 million won, making it a high-value product. The demand for high-capacity MLCCs, essential for AI servers, is soaring, but supply remains limited. Major MLCC manufacturers globally, including Samsung Electro-Mechanics, the leading domestic company, plan to focus on high-value MLCCs to enhance their revenue.
According to the customs agency's export and import trade statistics from the 7th, MLCC exports in February reached $10.618 million (about 1.55 billion won), an increase of 5.9% compared to the previous year and 3.0% compared to the previous month. Last month, among key products produced by domestic technology corporations, exports of memory semiconductors, displays, and secondary batteries all decreased compared to the previous year, with only MLCC showing growth. Amid the recovery in MLCC exports, Goldman Sachs predicted that Samsung Electro-Mechanics' revenue in the first quarter would increase by 17% compared to the same period last year. MLCCs account for just over 40% of Samsung Electro-Mechanics' total revenue.
The resurgence in demand for MLCCs has been significantly driven by the demand for MLCCs for AI servers and automotive applications. AI servers use eight times more MLCCs than regular servers. Notably, only a few leading corporations can produce ultra-small and high-capacity MLCCs used in AI servers. According to iM Securities, the market share for MLCCs for AI servers ranks 1st for Murata of Japan (45%) and 2nd for Samsung Electro-Mechanics (39%), establishing a two-company dominance. Yang Seung-soo, a researcher with MERITZ Securities, noted that "Japanese MLCC manufacturers, including Samsung Electro-Mechanics, expect the growth of the AI server market to continue this year, while also emphasizing the limited supply of high-capacity MLCCs for AI servers."
Demand for automotive MLCCs is also concentrated among global leading corporations. While Chinese companies are aggressively pushing low-cost products in the MLCC market, their competitiveness in the automotive sector is considered relatively weak. In the automotive MLCC market, Murata holds about half of the market share, followed by Japan's TDK, Taiwan's Yageo, and Samsung Electro-Mechanics. Researcher Yang stated, "Not only in the rapidly growing Chinese electric vehicle market but also in existing internal combustion engine vehicles, demand for MLCCs is increasing," adding, "Similar to the AI server market, existing leading MLCC manufacturers are benefiting in the automotive market, and especially in the Chinese electric vehicle market, a supply chain structure more favorable to MLCC manufacturers is forming in terms of profitability compared to the traditional automotive market."
The Chinese government's home appliance subsidy policy is also contributing to the expansion of MLCC demand. Since late last year, the Chinese government has been implementing the 'recycling program' that supports 15-20% of the sales price as subsidies for purchasing home appliances to stimulate the economy, and as of January this year, smartphones and tablet PCs have also been included in the supported items. Lee Chang-min, a researcher at KB Securities, stated, "Due to the subsidies from the recycling program and the decline in iPhone market share in China, smartphone sales in China are expected to rise," and added, "Since Samsung Electro-Mechanics has a high proportion of revenue from China, it will benefit more than its competitors." Samsung Electro-Mechanics generates 40% of its total MLCC revenue from the Chinese market.
The securities market has raised the performance forecasts for this year for leading MLCC companies, including Samsung Electro-Mechanics. Researcher Yang stated, "Unlike other components that face risks of price drops due to intensified competition, the MLCC market is expected to remain favorable," and adjusted Samsung Electro-Mechanics' expected operating profit for this year to 911 billion won, an increase of 24% compared to last year. Oh Kang-ho, a researcher at Shinhan Investment & Securities, predicted that "as demand for industrial and automotive MLCCs expands, the operating rate of Samsung Electro-Mechanics' MLCCs is expected to rise from the low 80% range in the second half of last year to 90% in the first half of this year."