High-End MLCC Supply Tightens as Taiwanese Firms Turn to Chinese Alternative Sources
Claire Weston
Surging AI server and EV demand has pushed high-end MLCC lead times past 20 weeks, prompting parts of Taiwan's supply chain to source from Chinese makers — a structural shortage analysts expect to last one to two years.
What are MLCCs, and why the sudden squeeze?
MLCCs — multilayer ceramic capacitors, grain-of-rice-sized components that regulate voltage and filter noise — sit on virtually every circuit board in electronics.
AI servers draw far more power and pack more complex chips than conventional servers, consuming several times as many MLCCs per unit. This means → every new AI server multiplies MLCC demand in a way traditional builds never did.
Goldman Sachs calls this cycle "the largest and longest in history" for the MLCC market.
How tight is supply, and who feels it first?
Lead times on some high-end models have stretched from a few weeks to over 20 weeks; buyers now prioritize securing supply over negotiating price.
Citrini Research pegs the 2025 server-MLCC market at roughly $1.3 billion — a sliver of the ~$15 billion global total, but AI-server MLCC demand is projected to grow about 80%.
In plain terms = the high-end slice is small, but it is growing so fast that supply cannot keep pace.
Japanese and Korean giants are pulling back — who fills the gap?
Murata and other leading Japanese and Korean suppliers are tightening order acceptance and shipments for high-end MLCCs, reserving capacity for long-term contract customers.
Taiwan's supply chain is turning to Chinese alternatives — Chaozhou Three-Circle (潮州三环) and Fenghua Advanced Technology (风华高科) are running at high utilization, and Three-Circle has been expanding into high-end grades.
This means → the space vacated as incumbents move upmarket is being filled by Chinese makers, reshaping the supply-chain map in real time.
Why aren't manufacturers selling all they can?
Makers are deliberately limiting spot-market sales, prioritizing cloud and AI-platform clients locked in under long-term agreements.
This reflects a hard lesson from 2018 — a passive-component shortage triggered panic over-ordering and a price spike, followed by a sharp reversal that burned both suppliers and distributors.
In plain terms = last time they sold freely, the boom-bust cycle hurt everyone; this time they would rather under-sell than repeat it.
How long will the shortage last?
High-end MLCC production requires ultra-thin dielectric layers, advanced material formulations, and precision stacking — none of which scale up quickly.
Analysts expect tight supply in high-end grades to persist for one to two years.
The broader MLCC market is splitting: commodity grades for consumer electronics have rebalanced after an inventory correction, while high-end parts for AI servers, automotive, and industrial use remain tight. This means → AI infrastructure and EVs are replacing smartphones and PCs as the primary MLCC demand engine — a structural shift that will reshape the competitive landscape.
Content is for reference only, not financial advice.