CITIC SEC: Under the wave of AI, MLCC welcomes a new round of upward cycles.

CITIC SEC has released a research report stating that MLCC has a wide range of applications in servers and optical modules, and stands to benefit from upgrades in server power, vertical power supply, and 800V. Currently benefiting from AI demand, the MLCC industry is entering a new round of price increases and an upturn in prosperity. The report also sees domestic manufacturers taking advantage of this trend and accelerating breakthroughs in high-spec products such as servers and automotive regulations. Key points from CITIC SEC include: MLCC has a wide range of applications in servers and optical modules, with the 800V architecture upgrade driving demand for medium and high voltage. In circuit systems, MLCC plays a core role in coupling, decoupling, smoothing, and filtering. It covers the entire power supply chain from level one to level three in the AI server field. According to TrendForce, the NVIDIA VR200 NVL72 server will use approximately 600,000 MLCCs, representing a 30% increase over the current GB300 platform, covering voltage specifications ranging from 2.5V to over a thousand volts. MLCC is an essential passive component in the development of the AI wave. In terms of trends, vertical power supply solutions in the server field, 800V server architecture, and rate upgrades in optical modules further require MLCC to have smaller size, higher power density, high temperature resistance, and high voltage resistance specifications, thereby driving the upgrade of MLCC specifications and overall value growth: for example, based on TrendForce data on motherboard applications, MLCCs with a capacitance of 1u or higher account for 60% on GB200 server motherboards, with usage of high-temperature resistant products such as X6S/X7S/X7R reaching as high as 85%. The report calculates that by 2030, the global market share of MLCC shipments in the server field will account for 5%-10% of the global market share and 20%-30% of the market size. According to data from TrendForce and QY research, global MLCC shipments and market size are expected to reach approximately 50-60 trillion pieces and over 200 billion USD, respectively, by 2025. Focusing on the server field, 1) Server shipments: According to TrendForce data and forecasts, global server/AI server shipments are expected to reach over 16 million units and over 2.7 million units, respectively, by 2026; 2) Unit usage of MLCC: Based on data from Samsung Electronics, the report assumes that the average usage of MLCC in general servers and AI servers will be 2,200 pieces and 28,000 pieces by 2026, respectively. Considering the overall upgrade in server power, the report expects a significant increase in the unit usage of MLCC in AI servers in the future; 3) Overall shipments and market size of MLCC: The report estimates that by 2026, global server MLCC shipments will reach the scale of tens of billions (about 2% of the overall MLCC market shipments), and it is expected to continue to expand to over 400 billion pieces by 2030, with an average compound annual growth rate of about 40%. Taking into account the significantly increased performance requirements for MLCCs in the server field, such as small size, high capacitance, high temperature resistance, the report assumes that the average unit price of MLCCs used in servers will be 3-5 times (or higher) than the overall unit price of MLCCs. Therefore, by calculating the market size of MLCCs used in servers as a percentage of the global market size by 2026 and 2030, it is estimated to be approximately 10% and 20-30%, respectively. Global MLCCs are expected to enter a new round of price increase cycle. Currently, major global MLCC leaders are especially positive about the industry outlook, particularly in AI-related sectors. Specific points include the following from earnings calls and announcements: 1) Murata: Due to strong demand in AI-related applications (orders are twice the capacity) and high capacity utilization (overall MLCC capacity utilization rate reached 90%-95% by the end of 2025), Murata expects the overall ASP of capacitors (including MLCC) to increase by 5%-10% year-on-year in 2026, and expects server-related sales in the capacitor division to increase by 85%-90% year-on-year. 2) Samsung Electronics: In its 26Q1 announcement, Component Solution business income increased by 16% year-on-year and 7% quarter-on-quarter, driven by high growth in sales of AI-related servers, power supplies, networks, and extended supply of automotive MLCCs; the company expects demand for high-end products in AI servers/data centers to continue to grow, with strong demand for AI servers leading to overall supply constraints. The blended ASP is expected to increase due to improvements in the product mix, and strategic pricing adjustments are expected to drive a 5%-10% price increase. 3) TDK: Prices of certain components, including MLCCs, will be raised starting in May. The report is optimistic about domestic manufacturers benefiting from this cycle and the AI wave. Currently, Japanese and South Korean manufacturers dominate the global MLCC market. According to Murata's announcement, Murata currently holds about 40% of the global MLCC market share, with a 50% share in the automotive MLCC market. In recent years, mainland Chinese manufacturers have actively promoted the introduction of products to customers and expanded production capacity. The report also sees domestic manufacturers benefiting from the current upturn in the MLCC industry, potentially taking advantage of the overflow of production capacity from overseas leaders focusing on the AI field. As a result, domestic manufacturers may see an increase in market share, and if the industry price increase continues beyond expectations, they are also likely to follow suit and accelerate the development and production of high-spec products such as AI servers and automotive regulations. Risk factors: AI industry development falls short of expectations; MLCC manufacturers do not pass on price increases to downstream customers as expected; new business expansion by domestic manufacturers falls short of expectations; deterioration of competitive landscape; accumulation of downstream inventory; lower than expected demand.