Samsung Electro-Mechanics will increase the prices of multilayer ceramic capacitors (MLCC) by 30% starting next month. This decision comes in response to a growing shortage of high-performance MLCCs due to increased investments in artificial intelligence (AI) servers and data centers.
According to industry sources on July 29, Samsung Electro-Mechanics recently informed its sales partners of the price hike. All MLCC products supplied through its Shenzhen, China, subsidiary will be affected. The new prices will take effect for shipments made after August 1.
In a notice sent to partners, Samsung Electro-Mechanics stated, "In recent months, there has been a structural surge in demand within the global electronics industry. We have continuously invested in optimizing production efficiency and expanding production lines, but supply chain pressures have exceeded manageable levels for the company." The notice further explained, "We are implementing this price adjustment to maintain the high quality standards expected by our customers."
MLCCs are essential components that store electricity and supply it reliably to semiconductors, reducing voltage fluctuations and signal interference in circuits.
The price increase is largely driven by the rapidly growing demand for high-capacity MLCCs for AI servers. Cloud service providers (CSPs) like Google, with its Tensor Processing Units (TPUs), and Amazon Web Services (AWS), with its Trainium chips, are expanding the adoption of their own AI accelerators, leading to a surge in MLCC orders for use around these accelerators and power management circuits.
MLCC shipments are also on the rise. According to market research firm TrendForce, Samsung Electro-Mechanics shipped 98 billion MLCCs in June, while Japan's Murata shipped 140 billion and Daiyo Yuden shipped 40 billion. The monthly shipments of the top three companies from South Korea and Japan have reached their highest levels in the past five years.
Additionally, Samsung Electro-Mechanics recently secured a supply contract for AI server MLCCs worth 453.99 billion won with a global tech giant last month, followed by another contract worth 295.12 billion won this month. The total new orders for AI server MLCCs announced this year amount to 749.11 billion won.
Both contracts are for supply in 2027, establishing a solid long-term sales foundation. With the price increase effective in August, both sales volume and average selling price (ASP) are expected to rise simultaneously.
Financial information provider FnGuide projects Samsung Electro-Mechanics' annual performance for this year to reach 13.565 trillion won in revenue and 1.6676 trillion won in operating profit, representing increases of 19.9% and 82.6%, respectively, compared to the previous year.
* This article has been translated by AI.
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