Global MLCC Market Faces Slow Growth Amidst Economic Uncertainty

TrendForce’s recent report indicates a period of slow growth for Multilayer Ceramic Capacitors (MLCCs) from 2023 to 2024, attributing the limited growth opportunities to the cautious outlook of Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs) in the face of uncertain political and economic conditions.

In 2023, MLCC demand is estimated at 4.193 trillion units, experiencing a modest annual growth rate of approximately 3%. This growth is primarily driven by applications in smartphones, automotive electronics, and PCs. However, due to the conservative stance adopted by OEMs and ODMs, a marginal 3% increase in MLCC demand is expected in 2024, reaching around 4.331 trillion pieces.

The slowdown in orders for ODMs is notable as OEMs exhibit caution in stocking up for the fourth-quarter holiday season after accelerating orders at the end of the third quarter. MLCC suppliers, anticipating lower demand during the peak season and concerned about the potential impact of global economic weakness in 1H24, are focusing on strict control of production capacity and inventory levels.

While demand for smartphones, PCs, and notebooks is gradually improving, overall consumer confidence remains weak. MLCC shipments in September peaked at approximately 434 billion units, supported by a slight stabilization in PC/notebook demand. The launch of new smartphone models in the fourth quarter led to increased shipments of related components. However, industry confidence lacks robust support from broader social and economic stability, leading to a slow increase in overall consumer demand. MLCC demand in November is expected to decrease to 405 billion units.

The report highlights the competitive landscape, noting that Japanese suppliers Murata and Taiyo Yuden have showcased impressive performances in the third quarter, experiencing growth in revenue and profits. Murata, in particular, plans aggressive pricing strategies from 1Q24, focusing on high-capacity, high-temperature, and high-pressure resistant products to secure order acquisitions in 2024. Samsung and Yageo have also reduced prices of their high-end MLCC products, signaling a challenging landscape for suppliers in 2024 under the expectation of slow industry growth.

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