AI Servers Create New MLCC Trend: Will It Be the Next HBM?

TradingKey - Multilayer ceramic capacitors (MLCCs) were once highly inconspicuous components in the electronics industry, with prices typically measured in fractions of a cent. However, AI data centers are transforming this landscape; a single AI server consumes 440,000 MLCCs, which is 10 to 15 times the amount used in traditional servers. Supply-side capacity remains tight, with lead times for some high-end products increasing from 8 weeks to 24 weeks, as expectations for price hikes spread. Samsung Electro-Mechanics, Murata Manufacturing, and U.S.-listed Vishay Intertechnology ( VSH) are benefiting from this.

What is MLCC?

MLCCs are responsible for voltage regulation, filtering, and decoupling, serving as fundamental components in all electronic devices. While a standard enterprise-grade server requires about 1,000 units, an Nvidia GB200 NVL72 rack requires approximately 440,000—a quantity 30 times that of a smartphone. Murata Manufacturing estimates that by 2030, demand for MLCCs from AI servers will increase 3.3-fold compared to 2025.

AI servers have stringent specification requirements for MLCCs: high voltage, high capacitance, high temperature resistance, and low Equivalent Series Resistance (ESR). High-end MLCC manufacturing is complex and yields are significantly lower than those for standard products, maintaining a tight balance on the supply side. Industry data shows that lead times for some high-end MLCCs have stretched from 8 weeks to 24 weeks, as the book-to-bill ratio has remained above 1 for several consecutive quarters.

Samsung Electro-Mechanics is considering price increases of up to 10%, and Taiyo Yuden has already announced 6%-13% hikes for mid-to-low capacitance MLCCs. Goldman Sachs ( GS) has consequently raised its 2026 MLCC price forecast from "flat" to an increase of 0%-5%.

How can US equity investors gain exposure to MLCCs?

The global MLCC market is dominated by Japanese and South Korean manufacturers: Murata, Samsung Electro-Mechanics, and Taiyo Yuden collectively hold a market share of over 60%. U.S. investors can participate through Vishay and the ADRs of Murata and Taiyo Yuden. Note that the latter two are traded on the over-the-counter (OTC) market (OTCMKTS), where liquidity is lower than on major exchanges and bid-ask spreads are wider.

Vishay Intertechnology Its product line covers MOSFETs, diodes, resistors, and capacitors (including MLCCs and tantalum capacitors). The capacitor business accounts for approximately 20%-25% of the company's revenue (estimated based on the 2024 annual report); while MLCCs are only a part of this, they represent the most elastic sub-segment in the current wave of AI demand.

According to the latest financial report, Vishay's Q4 2025 revenue reached $801 million, exceeding the midpoint of the company's guidance, with backlog increasing nearly 14% quarter-over-quarter to a three-year high. Q1 2026 revenue guidance is set between $800 million and $830 million. Management expects revenue in five major sectors—automotive electronics, industrial power, medical, aerospace & defense, and AI computing—to increase quarter-by-quarter.

Vishay is not a pure-play MLCC manufacturer, but its capacitor business continues to benefit from AI power management and industrial control scenarios. The risk lies in a potential slowdown in AI server or automotive demand; while its diversified business provides a buffer, it could also drag down overall performance.

Murata Manufacturing Co., Ltd. (OTCMKTS: MRAAY) It ranks first in global MLCC market share (over 40%) and holds approximately 70% of the market share in the AI server field. The latest financial report shows that the electronic components division's revenue for the first three quarters reached 861.1 billion yen, a 10% year-over-year increase, with the book-to-bill (BB) ratio exceeding 1 for five consecutive quarters and hitting a 15-quarter high. JPMorgan recently raised its price target, believing that the supply-demand tightness in passive components will persist over the long term.

Taiyo Yuden Co., Ltd. (OTCMKTS: TYOYY) It ranks third in the global MLCC market with a share of approximately 11%-13%, trailing only Murata and Samsung Electro-Mechanics. Multilayer Ceramic Capacitors (MLCCs) are its core product, accounting for as much as 64% of its business.

Against the backdrop of tightening supply and demand, Taiyo Yuden took the lead in raising prices for low-to-mid capacitance consumer-grade MLCCs and certain automotive MLCCs starting in May 2026, with increases ranging from approximately 6% to 13%. The company's book-to-bill (BB) ratio remains consistently above 1, with production capacity running at full tilt. Institutions such as JPMorgan have correspondingly raised the company's price target, viewing it as one of the core beneficiaries of this structural upturn in the MLCC market.

Will MLCC be the next HBM?

The passive component industry is generally regarded as a highly cyclical sector, where valuations fluctuate alongside economic cycles. However, AI-driven growth in MLCC demand is shifting this logic. Technical barriers are creating a long-term supply-demand gap, allowing this niche segment to transition from "cyclical stocks" to "growth stocks."

Historical precedent provides a reference: in 2018, a severe MLCC shortage occurred, primarily driven by Japanese manufacturers exiting conventional capacity to pivot toward the automotive-grade market. As AI technology advances alongside the upgrading of automotive electronics, the expansion of high-end MLCC capacity is lagging behind demand growth, potentially leading to shortages comparable to 2018 levels.

Top-tier manufacturers have shifted their strategy from "volume" to "quality," focusing on providing high-value-added solutions with long supply lock-in periods for AI data centers. This process closely mirrors the trajectory of HBM's emergence as a distinct segment within the DRAM market.

However, the duration of this MLCC price hike cycle depends heavily on the shipment cadence of AI servers. If the penetration rate of Nvidia’s Blackwell platform falls below expectations, or if leading manufacturers move to expand production collectively, the supply-demand gap could narrow ahead of schedule, halting the price increase. Furthermore, macro factors such as geopolitical conflicts in the Middle East and shifts in global monetary policy could impact downstream demand.

What are the key focus areas for investors?

In the coming quarters, the market should focus on book-to-bill (BB) ratio trends: if the BB ratios for Murata and Samsung Electro-Mechanics remain consistently above 1, it will confirm the continuation of the tight supply-demand environment. Second is the pace of price hike expansion: Samsung Electro-Mechanics and Taiyo Yuden have already announced or are planning price increases, while Murata has not yet officially adjusted its prices. If Murata follows suit, the current MLCC price upcycle will enter its second phase. Third is the progress of AI server shipments; Murata has linked MLCC demand to the penetration speed of NVIDIA's Blackwell platform, which is a key variable for judging peak demand.

MLCC is another segment within the AI hardware supply chain undergoing re-evaluation. Vishay and Murata ADRs provide channels for US investors to participate, though attention should be paid to OTC liquidity risks. Investors should dynamically adjust their positions based on BB ratios, price hike signals, and the pace of AI shipments.