(Samsung Electro-Mechanics)
Samsung Electro-Mechanics Co., an electronic component manufacturing subsidiary under South Korea’s Samsung Group, is pushing to raise prices for its multilayer ceramic capacitors (MLCCs), a core electronic component essential for smartphones, artificial intelligence (AI) servers, and automobiles.
According to industry sources on Monday, Samsung Electro-Mechanics is considering a plan to increase MLCC prices by 5 to 10 percent.
The exact rate and timing have not yet been finalized, but an internal consensus has been reached on the need for a price adjustment, sources said.
The latest move follows signals from Japanese competitors.
Taiyo Yuden Co. has already notified major customers of price hikes for some components, including MLCCs, starting in May. Murata Manufacturing Co., the world’s top MLCC supplier, is also reportedly reviewing its pricing policy.
With leading players simultaneously considering price increases, Samsung Electro-Mechanics—the global No. 2—is poised to join the trend, sources said.
Behind the price hike movement is a structural shift in demand.
The center of MLCC demand has moved from smartphones and PCs to automotive electronics and AI servers, rapidly reshaping the product mix toward higher value-added items.
In particular, MLCCs for AI servers must ensure stability in high-temperature and high-voltage environments, driving a sharp increase in the share of high-capacitance, high-reliability products.
These products are difficult to manufacture and require lengthy certification periods, making it hard to quickly expand their supply, sources said.
Actual supply-demand conditions support this trend as well.
The MLCC utilization rates for Samsung Electro-Mechanics and Murata remain in the 90 percent range.
Despite operating production facilities at near full capacity, inventories are not building up, indicating robust downstream demand.
However, unlike the MLCC price surge immediately after the Covid-19 pandemic, widespread panic buying has not emerged this time.
This is because, unlike in the past, when smartphone and PC makers led demand, AI customers—the current core of MLCC demand—operate based on long-term roadmaps spanning 2–3 years, sources said.
Some analysts suggest that price increases may last longer, as demand is being executed in a planned manner rather than through excessive short-term orders.
Still, geopolitical tensions in the Middle East pose a variable by exposing raw material risks.
As military tensions between the United States and Iran escalate and concerns over disruptions to crude oil supply grow, instability could spread across naphtha-based petrochemical products.
Naphtha is a key feedstock produced during crude oil refining, and among its derivatives, toluene is a major solvent used in MLCC manufacturing.
Given the supply chain structure linking crude oil to naphtha, toluene, and ultimately MLCCs, rising raw material prices could directly increase component costs.
The fact that both Korea and Japan heavily rely on overseas sources, particularly the Middle East, for naphtha is also seen as a risk factor.
With the MLCC market already in a “tight supply phase,” further increases in raw material prices such as toluene could add to manufacturing cost pressures, sources said.
However, analysts say that rising costs driven by raw material shortages are more likely to amplify price increases rather than weaken demand.
Industry observers expect the point at which a full-fledged MLCC supply shortage coincides with rising prices to come in the second half of this year.
“As MLCC demand structurally expands and supply remains constrained around high-value products, price increases and profitability improvements are likely to continue over the long term,” said an industry official.
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