[Edaily Reporter Choi Oh-hyun ] Chinese multilayer ceramic capacitor (MLCC) manufacturers are accelerating their entry into the global PC supply chain. They appear to be capitalizing on the supply gap in general-purpose MLCCs created as leading companies such as SamsungElectroMechanics and Murata focus their production capacity on high-value-added products for artificial intelligence (AI) servers.

According to an MLCC market trend report released the previous day by market research firm TrendForce, HP, ASUS, Acer, and laptop manufacturers (ODMs) Quanta and Pegatron have begun supplier verification and factory inspections of Chinese companies such as CXMT (DRAM) and MLCC manufacturers Sanhuan Group (CCTC) and Viiyong.

An MLCC is a component that ensures a steady flow of current through electronic circuits and reduces signal interference between components. As an essential component that supplies the electricity needed by semiconductor parts in various products—including home appliances, PCs, smartphones, and vehicles—it is often referred to as the “rice of the electronics industry.”

The reason global PC manufacturers are verifying Chinese MLCC suppliers is that leading companies such as SamsungElectroMechanics and Murata are shifting their production capacity for IT-grade X5R products to the more profitable AI-grade X6S and X7R products. While leading companies are scaling back production of consumer-grade MLCCs, Chinese companies appear to be gradually expanding their market presence.

In terms of global MLCC market share, Japan’s Murata and South Korea’s SamsungElectroMechanics hold the top two positions. In particular, the market for high-specification MLCCs used in AI servers is dominated by the duopoly of Murata and SamsungElectroMechanics. According to TrendForce, driven by the recent surge in AI demand, MLCC shipments by the top three global manufacturers in June reached their highest monthly level in the past five years. As production capacity for medium- and high-capacity general-purpose MLCCs among leading manufacturers has decreased, inventories of general-purpose MLCCs fell below 30 days in July.

Chinese manufacturers’ global market share remains in the single digits as of 2024. However, they are rapidly expanding their production capacity and broadening their product portfolio to include high-capacity and high-reliability products. In particular, they are actively expanding production of high-capacity products—such as those for AI servers—a segment currently dominated by SamsungElectroMechanics and Murata.

According to the semi-annual report from Samhwan Group, China’s largest MLCC manufacturer, the company invested 560 million yuan in a high-capacity MLCC expansion project during the first half of this year. Samhwan Group plans to complete the project by the end of May next year. TrendForce recently added Samhwan Group to its list of key MLCC suppliers to track, noting that the company is increasing its production capacity by leveraging its vertically integrated supply chain, which spans from raw materials to finished products.

BiYong also announced on its website that it plans to expand its annual production capacity for high-specification MLCCs to over 900 billion units by the end of this year, with a target of over 1.2 trillion units annually by 2030.

However, the industry believes it will be difficult for Chinese companies to immediately threaten the market for AI servers. Yield rates for high-specification server products remain an issue that Chinese companies, including Samhwan Group, have yet to resolve. An industry official stated, “There is still a significant technological gap with China in the high-specification MLCC market,” adding, “It will be difficult for Chinese companies to enter the (high-value-added product) market right away.”

The source further explained, “Amid supply shortages, domestic companies are trending toward shifting toward highly profitable, high-value-added products, even if it means ceding part of the low-value-added product market to Chinese firms.”