One Size Doesn’t Fit All – MLCC Market Trends
Capacitors have never been “one size fits all,” and as technology has advanced the market has further diversified and specialized. MLCCs (multi-layer ceramic capacitors), already a specialized product, are no exception. This year we’ve seen the somewhat unusual phenomenon of a number of major companies in one country, Japan, aggressively focusing on a few very limited segments at the same time. How does that affect you? It depends on your project.
A quick overview of current MLCC production: MLCC manufacturers can be loosely grouped into those in Japan; those in Taiwan, South Korea, and China; and those located elsewhere. Japan is the seat of MLCC technology and all major capacitor advancements in recent decades have come from manufacturers located in the Land of the Rising Sun.
The latest strides made by Japanese manufacturers have been in extreme miniaturization and increased capacitance levels while maintaining and even improving component reliability. Creating state of the art components on the cutting edge of technology, however, comes with a literal cost. Customers looking to take advantage of the latest and greatest will be paying for the privilege.
The Japanese manufacturers are – quite rightly – assuming that there’s a high demand for their small, high-capacitance MLCCs. The automotive industry is hungry for ever-more powerful and precise components and shrinking footprints, while the increasing proliferation of tech wearables, smart homes, and “internet of things” devices creates new customers and markets every day. In response, Japanese manufacturers are focusing their MLCC production almost entirely on very small sizes for maximum production capacity and market yield. Yes, even if that means turning away orders for other commodities.
So what do you do if you want a larger, cheaper, or lower-capacitance MLCC? Look west. Taiwan and South Korea are picking up the production slack. Taiwanese manufacturers in particular are ramping up their production capabilities for low- and medium-capacitance MLCCs destined for commodities that don’t require minimalization. But if you’re hoping for rock-bottom prices, you won’t find them. Demand is currently outstripping production and prices are rising accordingly for even the most basic MLCCs. Expect to pay 15-30% more than you did last year for the same part.
Which brings us back to how this affects you. Thanks to segmentation, it’s more important than ever to consider who and where you’ll be sourcing your parts from when specing your next project. Which factor is most important to you – size, capacitance, reliability, availability – will determine the geographic source and cost for most items on your BOM. Incompatible priorities will result in either multiple source countries or much higher prices to single source. This is one market trend that’s going to ripple up and down the supply chain for years to come.