A 35% INCREASE IN THE PRICE OF THE MAP: AN ELECTRICITY THAT WILL CATCH THE AI EMPIRE

The world's largest passive object manufacturer, Murata Manufacturing, announced an increase of 15 to 35 per cent in the price of AI servers and car-grade MLCC (multilayer ceramics) effective 1 April. This is the first large-scale price adjustment in three years by a Japanese company with 40 percent of the global MLCC market。

THE PRICE INCREASES THEMSELVES ARE NOT SURPRISING. OVER THE PAST YEAR, THE DEMAND FOR HIGH-END MLCC ON AI SERVERS HAS DOUBLED, WHILE THE UTILIZATION OF VILLAGE CAPACITY HAS SINCE RECOVERED FROM THE VALLEY OF 2024. AND WHAT REALLY DESERVES TO BE DECOMPOSED IS A POTTERY CAPACITOR OF LESS THAN ONE MILLIMETER, AND HOW CAN IT STIR THE WHOLE AI ALGORITHMIC SUPPLY CHAIN。

HOW MANY CAPS ON AN AI SERVER

MOST OF THE DISCUSSION ABOUT AI SERVER COSTS FOCUSED ON GPU. BUT IT'S EASY TO IGNORE THE FACT THAT AN AI SERVER WITH A GB300 PLATFORM REQUIRES ABOUT 30,000 MLCCS, 30 TIMES MORE THAN A SMARTPHONE, 5 TO 10 TIMES MORE THAN A TRADITIONAL SERVER。

IF YOU LOOK AT THE ENTIRE SHELF LEVEL, THE NUMBERS ARE EVEN MORE EXAGGERATED. THE NVL36 SHELF REQUIRES APPROXIMATELY 234,000 UNITS, THE NVL72 SHELF REQUIRES APPROXIMATELY 441,000 UNITS, AND THE SINGLE RACK MLCC COSTS BETWEEN US$ 2,500 AND US$ 4,600. MLCC HAS RISEN TO THE THIRD COST ITEM OF THE AI SERVER BOM (LIST OF MATERIALS) AFTER GPU AND MEMORY。

THE ABSOLUTE VALUE OF $4,600 DOESN'T SOUND MUCH, COMPARED TO THE PRICE OF A GPU OF TENS OF THOUSANDS. HOWEVER, THE SPECIALITY OF THE MLCC IS THAT IT IS A RIGID DEMAND FOR "ONE CANNOT OPEN WITHOUT ONE." A CLOUD MANUFACTURER CANNOT DRAG THE ENTIRE GPU INDUSTRIAL LINE BECAUSE OF A FEW ELECTRIC CAPS。

Two companies ate 84% of the market

THE MLCC MARKET IS HIGHLY CONCENTRATED, BUT WHERE IT IS HIGH DEPENDS ON WHAT SUBDIVISION YOU LOOK AT。

According to TrendForce, in the global MLCC market, Murada has a steady share of over 40 per cent, with Samsung Electro-Mechanics in Korea accounting for about 18 per cent, TDK for about 12 per cent, and Japan for solar charge and China Taiwan for about 10 per cent each. The first six together account for 70% of the world's share。

BUT TO THE SUB-MARKET OF THE AI SERVER, THE PATTERN IS COMPLETELY DIFFERENT. ACCORDING TO THE SAME SOURCE, THE VILLAGE IS AHEAD BY 45 PER CENT, WITH THE SAMSUNG POWER PLANT BEHIND 39 PER CENT AND THE TWO HOUSEHOLDS EATING 84 PER CENT. THIS MEANS THAT IN THE GLOBAL AI SERVER SUPPLY CHAIN, THE SUPPLY OF MLCC IS IN THE HANDS OF TWO COMPANIES, WHICH IS MORE CONCENTRATED THAN THE GPU MARKET。

The notable competitive variable is Chinese manufacturers. According to passive-components.eu, the global income share of Chinese MLCC manufacturers reached 10 per cent in the second half of 2024, an increase of 4 percentage points over 2019. However, in the area of high-end specifications required for the AI server, there is little sense of being felt by Chinese manufacturers。

The price increase at the bottom of the margin

Murada chose to raise the price at this point, with a clear financial motive behind it。

ACCORDING TO THE FINANCIAL REPORT OF THE VILLAGE PRODUCER, THE COMPANY REACHED THE HIGH POINT IN RECENT YEARS IN FY2022 (AS OF MARCH 2023), RECEIVING 1.8 TRILLION YEN AND A PROFIT MARGIN OF 23.4 PER CENT. THIS WAS FOLLOWED BY TWO CONSECUTIVE YEARS OF DECLINE. THE FY2024 (AS OF MARCH 2025) BUSINESS PROFITS FELL TO 13.1 PER CENT AND ALMOST CUT OFF. THE MAIN REASON FOR THE EROSION OF PROFITS IS THE FIERCE PRICE BATTLE BETWEEN CHINESE COMPETITORS IN THE MIDDLE AND LOWER MARKETS。

FY2025 (AS OF MARCH 2026) SHOWS UP ON THE SWITCH. AI SERVER DEMAND LED TO AN INCREASE IN THE VOLUME OF HIGH-END MLCC EXPORTS, AND MURADA EXPECTED TO RECOVER UP TO 1.74 TRILLION YEN THROUGHOUT THE YEAR AND RESTORE THE PROFIT MARGIN TO 16.0 PER CENT. MR. NAKASHIMA HAD PREVIOUSLY INDICATED IN THE PRESS CONFERENCE THAT THE NEEDS OF THE IA SERVER-RELATED MLCC WOULD DOUBLE WITHIN FF2025。

THE ANNOUNCEMENT OF HIGHER PRICES WHEN THE PROFIT MARGIN HAS JUST CLIMBED OUT OF THE VALLEY SUGGESTS THAT THIS IS NOT JUST THE SIMPLE LOGIC OF "SUPPLENDENCE AND DEMAND." MURADA NEEDED TO REPAIR THE PROFIT SPACE THAT HAD BEEN HIT LOW BY THE PRICE WAR, AND THE AI SERVER JUST HAD TO GIVE IT THE BOTTOM LINE。

LAST TIME, THE MLCC WENT UP FOR TWO YEARS

THIS IS NOT THE FIRST TIME THAT THE MLCC INDUSTRY HAS EXPERIENCED A CYCLE OF PRICE INCREASES. FROM THE BEGINNING OF 2017 TO MID-2018, THE MLCC MARKET EXPERIENCED A "SUPER-PRICE INCREASE " , WITH A 5 TO 10-FOLD INCREASE IN THE PRICE OF STANDARD-SPECIFIED PRODUCTS AND AN EXTENSION OF THE DELIVERY CYCLE FROM THE NORMAL 4 TO 8 WEEKS TO MORE THAN 30 WEEKS. THAT ROUND WAS DRIVEN BY THE DOUBLE PULL OF SMARTPHONES AND CAR ELECTRONS, AND BY THE SHIFT OF PRODUCTION CAPACITY FROM STANDARD TO HIGHER END OF THE MARKET, WHICH RESULTED IN A SEVERE SHORTAGE OF GOODS AT THE MIDDLE AND LOWER END。

The situation in 2026 is similar and different from that in 2017-2018. The similarity is that it is the large plants that have taken the initiative to adjust their product mix and tilt their capacity towards higher-profit areas. The difference is that the demand for MLCC from the AI server is more sustainable than the smartphones of the year. According to TrendForce, the current prices of high-end AI servers using MLCC have increased by 15-20 per cent and are expected to increase by 30-40 per cent throughout the year. But consumer-grade MLCC is almost even and has yet to show the kind of full-size panic price hike in 2017。

FOLLOWING THE INCREASE IN PRICES IN MURADA, THE STRENGTH OF THE CYCLE WILL BE DETERMINED BY WHETHER OR NOT THE COMPETITION IS FOLLOWED BY THE SAMSUNG ELECTRIC MACHINE, THE SUN-INDUCING POWER, AND THE KUO. IF IT'S ONLY MURADA, THE IMPACT IS MANAGEABLE. IF THE WHOLE INDUSTRY GOES UP, THE COST PRESSURE ON THE AI SERVER'S SUPPLY CHAIN WILL SPREAD FROM GPU TO EVERY TINY OBJECT。

ONE MLCC IS LESS THAN A MILLIMETER, BUT 441,000 PILED TOGETHER, WHICH IS THE SUPPLY CHAIN NODE ON THE BRITISH NVL72 SHELF。