Fearless semiconductor demand waning, MLCC expansion just in time
Recently, Korean media reported that Korean electronic component manufacturer AMOTECH is discussing with North American electric vehicle customers to expand MLCC supply for denso. The company began supplying some MLCCs for electric vehicles to North American customers last year, but the supply chain is not large and this supply is expected to achieve a large volume of MLCCs.
AMOTECH is actively expanding its MLCC production to meet the demand for volume supply of MLCCs for Denso, and last year the company started its plan to expand its MLCC production line in Vietnam.
Consumer MLCCs are weak, but automotive MLCCs are just in time
MLCCs (Multilayer Ceramic Chip Capacitors) are mainly used in consumer electronics, communications, industrial and automotive applications. Due to the global economic headwinds and high inflation, consumer electronics have been weak for several quarters in a row, and as a result, consumer MLCCs are oversupplied, limiting the development of manufacturers.
In February this year, MLCC major Murata announced that it would close two of its subsidiaries due to low demand for smartphones. Murata has already closed its overseas subsidiary Huacheng Electronics Co Ltd in Taiwan, China in January this year and will close its subsidiary COILTEC in Japan on April 30.
Meanwhile, with the development of electrification and intelligence of vehicles, the demand for automotive MLCCs continues to rise. It is reported that electric vehicles can carry more than 10,000 MLCCs on average, and high-end models can carry up to 30,000 MLCCs, which is a larger volume than consumer electronics, and the average unit sales price (ASP) of automotive MLCCs is two to three times higher than that of smartphone MLCCs, which is a high value-added product.
Murata believes that as demand for MLCCs in smartphones declines, the company expects electric vehicles and 5G smartphones to be the next growth drivers in the medium to long term. TAIYO YUDEN expects global automotive MLCC demand to be 1.9 times larger in 2023 than in 2019. Samsung Electro-Mechanics expects uncertainty in the business environment to continue in 2023 and will continue to improve its performance by expanding its lineup of advanced products for automotive use, focusing on high value-added products such as automotive and servers.
Major manufacturers actively expand production to meet demand for automotive MLCCs
Driven by market demand, it is imperative for MLCC makers to push ahead with the automotive sector. Currently, a number of major manufacturers have increased their investment in R&D and production expansion for automotive-grade MLCCs to meet the demand for automotive MLCCs.
Murata plans to increase production of MLCCs at a rate of about 10% per year, and its Vietnam subsidiary has started construction of a new production building in June last year, which is expected to be completed in August this year. It is reported that the new production building will cater for automotive and electronic equipment in the medium to long term.
TDK announced in May last year that it would expand its automotive capacity at its existing Kitakami plant in Iwate Prefecture, Japan, focusing on the production of highly reliable MLCC products for electric vehicle (EV), autonomous driving and ADAS applications, with mass production expected to begin in September 2024.
Samsung Electro-Mechanics has invested in the construction of an automotive MLCC plant in the Tianjin Development Zone and the project has been fully operational since July 2021.
In November 2021, TAIYO YUDEN announced that it will build a new MLCC plant at its subsidiary TAIYO YUDEN (Changzhou) Electronics Co Ltd to increase production of MLCCs, with automotive MLCCs being the first priority.
According to a survey by global market research firm TrendForce, automotive MLCC orders are expected to remain relatively stable in the first quarter of 2023, and MLCC suppliers are expected to actively invest in research and development and expand production capacity for automotive products throughout the year. TDK's Kitakami plant in Iwate Prefecture, Japan, will increase its monthly production capacity by 5-8 billion units. Samsung, TAIYO YUDEN and Kokugo will all see significant growth in automotive production capacity in 2023, with an average monthly capacity increase of 2-3 billion units.
AMOTECH is actively expanding its MLCC production to meet the demand for volume supply of MLCCs for Denso, and last year the company started its plan to expand its MLCC production line in Vietnam.
Consumer MLCCs are weak, but automotive MLCCs are just in time
MLCCs (Multilayer Ceramic Chip Capacitors) are mainly used in consumer electronics, communications, industrial and automotive applications. Due to the global economic headwinds and high inflation, consumer electronics have been weak for several quarters in a row, and as a result, consumer MLCCs are oversupplied, limiting the development of manufacturers.
In February this year, MLCC major Murata announced that it would close two of its subsidiaries due to low demand for smartphones. Murata has already closed its overseas subsidiary Huacheng Electronics Co Ltd in Taiwan, China in January this year and will close its subsidiary COILTEC in Japan on April 30.
Meanwhile, with the development of electrification and intelligence of vehicles, the demand for automotive MLCCs continues to rise. It is reported that electric vehicles can carry more than 10,000 MLCCs on average, and high-end models can carry up to 30,000 MLCCs, which is a larger volume than consumer electronics, and the average unit sales price (ASP) of automotive MLCCs is two to three times higher than that of smartphone MLCCs, which is a high value-added product.
Murata believes that as demand for MLCCs in smartphones declines, the company expects electric vehicles and 5G smartphones to be the next growth drivers in the medium to long term. TAIYO YUDEN expects global automotive MLCC demand to be 1.9 times larger in 2023 than in 2019. Samsung Electro-Mechanics expects uncertainty in the business environment to continue in 2023 and will continue to improve its performance by expanding its lineup of advanced products for automotive use, focusing on high value-added products such as automotive and servers.
Major manufacturers actively expand production to meet demand for automotive MLCCs
Driven by market demand, it is imperative for MLCC makers to push ahead with the automotive sector. Currently, a number of major manufacturers have increased their investment in R&D and production expansion for automotive-grade MLCCs to meet the demand for automotive MLCCs.
Murata plans to increase production of MLCCs at a rate of about 10% per year, and its Vietnam subsidiary has started construction of a new production building in June last year, which is expected to be completed in August this year. It is reported that the new production building will cater for automotive and electronic equipment in the medium to long term.
TDK announced in May last year that it would expand its automotive capacity at its existing Kitakami plant in Iwate Prefecture, Japan, focusing on the production of highly reliable MLCC products for electric vehicle (EV), autonomous driving and ADAS applications, with mass production expected to begin in September 2024.
Samsung Electro-Mechanics has invested in the construction of an automotive MLCC plant in the Tianjin Development Zone and the project has been fully operational since July 2021.
In November 2021, TAIYO YUDEN announced that it will build a new MLCC plant at its subsidiary TAIYO YUDEN (Changzhou) Electronics Co Ltd to increase production of MLCCs, with automotive MLCCs being the first priority.
According to a survey by global market research firm TrendForce, automotive MLCC orders are expected to remain relatively stable in the first quarter of 2023, and MLCC suppliers are expected to actively invest in research and development and expand production capacity for automotive products throughout the year. TDK's Kitakami plant in Iwate Prefecture, Japan, will increase its monthly production capacity by 5-8 billion units. Samsung, TAIYO YUDEN and Kokugo will all see significant growth in automotive production capacity in 2023, with an average monthly capacity increase of 2-3 billion units.
