Samsung Electro-Mechanics May Raise MLCC Prices in Fourth Quarter as AI Demand Tightens Supply

[Financial News] Samsung Electro-Mechanics is expected to raise prices for multilayer ceramic capacitors (MLCCs) in the fourth quarter. The move is attributed to tight supply caused by growing demand for high-specification products used in artificial intelligence (AI) servers, along with efforts to focus production capacity on those products.
According to market research firm TrendForce on the 1st, Samsung Electro-Mechanics is expected to raise MLCC prices for original equipment manufacturer (OEM) and original design manufacturer (ODM) customers in the fourth quarter of this year. Prices for general-purpose consumer X5R products are projected to rise by an average of 25–30%, while prices for high-specification X6S products used in AI servers are expected to increase by an average of 10–20%, depending on negotiations with customers.
The reasons for the price increases differ by product. For consumer X5R products, the company is believed to be raising prices to regulate orders and use the production capacity freed up as a result to manufacture high-specification products. Demand for AI data centers is surging for AI server-oriented X6S products, but because their prices are already high, significant increases are considered difficult.
If Samsung Electro-Mechanics proceeds with the price increases, the scope of the adjustment is expected to expand from existing distribution channels to finished-product customers. In particular, Samsung Electro-Mechanics supplies a relatively large share of its MLCCs directly to customers rather than through distributors.
According to iM Securities, distribution channels account for the 10% range of Samsung Electro-Mechanics’ MLCC sales, while direct deliveries account for the 80% range. Analysts therefore say that price increases for OEM and ODM customers could have a greater impact on earnings than previous increases in distribution prices.
Supply pressures in the MLCC market are also continuing. TrendForce expects Taiwanese and Chinese manufacturers to raise prices by an average of 10–20% in the fourth quarter as they receive additional orders for medium- and high-capacity consumer products. Their utilization rates are also rising, with some manufacturers already approaching around 90%.
However, overall demand for MLCCs is not increasing. Amid economic slowdowns in China and the United States and weakened consumer sentiment, demand in the traditional information technology (IT) and automotive markets is still expected to remain subdued in the second half of the year. By contrast, demand for high-specification components continues to grow, led by AI data centers. This is why analysts say recent increases in MLCC prices have been driven more by rising demand and supply shortages for high-specification AI products than by a broad recovery across downstream industries.
Analysts say whether the upward trend in MLCC prices will spread depends on the moves of Japanese manufacturers. Murata Manufacturing, Taiyo Yuden, and Kyocera are currently maintaining their prices. However, as Taiwanese and Chinese manufacturers are also expected to raise prices following Samsung Electro-Mechanics, Japanese manufacturers could join in as well, potentially driving prices higher across the MLCC industry.
Ko Eui-young, a researcher at iM Securities, forecast, "A price adjustment by Murata, which has been cautious about raising prices, could signal that MLCC supply and demand have become extremely tight." Ko added, "Latecomers may also intensify their moves to raise prices."

[email protected] Park Ji-yeon Reporter