Goldman Sachs: AI-driven MLCC upcycle may extend to 2030

After meeting with Murata Manufacturing Co., Ltd. President Norio Nakajima, Goldman Sachs maintains a buy rating (conviction list) for Murata Manufacturing Co., Ltd. with a 12-month target price of 5,400 yen, and further confirms the view that this Japanese electronics component giant is still in the early stages of growth.

In terms of the business cycle, Murata previously forecasted that AI infrastructure investment would peak around 2028, but Nakajima stated at the analyst conference that AI infrastructure expansion could continue until around 2030, constrained by factors such as electricity shortages.

Goldman Sachs believes that AI could be the largest and longest-lasting business cycle for the MLCC industry. At the same time, the rapid growth of edge devices such as autonomous driving, software-defined vehicles, and humanoid robots will provide Murata with additional expansion space in cutting-edge MLCCs, sensors, and lightweight devices, opening a second growth curve.

Regarding pricing logic, Murata management clearly indicated that the MLCC for AI servers is not a direct price increase on existing products, but rather a re-pricing of new products as the platform updates annually and the bill of materials significantly upgrades.

Goldman Sachs interprets this mechanism as a de facto price reset — although ostensibly a product mix optimization, the effect is equivalent to price increases, meaning that as AI server platforms continue to update, Murata's MLCC unit prices are expected to maintain a systematic upward trend.

In terms of capacity expansion, Murata's additional 80 billion yen of capital expenditure is specifically earmarked for high-unit-price AI applications, and in many cases, production can be increased by simply adding processes to existing production lines, making the investment recovery rate high. Regarding the market size structure of AI server MLCCs, the GPU/ASIC card TAM is the largest, followed by vertical power supply units and network switches, with limited high voltage primary/secondary power TAM.

Regarding the technology roadmap, in the competitive landscape between silicon capacitors and MLCCs, Murata believes that silicon capacitors have advantages in thickness and flatness for embedded scenarios within packaging substrates, but MLCCs are more superior in terms of capacity and ease of use. Murata also disclosed the development of MLCC products with high connection reliability, which Goldman Sachs believes shows Murata's flexible technology reserves and will not lose its market position due to potential competition from silicon capacitors.