The MLCC industry is on the rebound in the third quarter of 2023, as global inflation gradually cools down and market inventories stabilize. TrendForce reports that the monthly average BB ratio (break-even point) for MLCC suppliers has risen from 0.84 in April to 0.91 in early July. This indicates that the industry is now back to profitability.
The comeback of the MLCC industry is being driven by a number of factors, including:
- Rising demand for internet infrastructure, AI servers, and Apple’s latest device. The US government is set to allocate $42 billion from its infrastructure budget to build a high-speed internet network across the country by 2030. This initiative is expected to stimulate the growth of network companies, which will require more MLCCs. In addition, demand for AI has skyrocketed since the start of the second quarter, and ODMs are increasing their procurement of advanced MLCCs from companies like Murata, Samsung, and Taiyo Yuden.
- Normalisation of inventory levels. Inventory levels in the MLCC industry have been normalizing since the second quarter, which is allowing brands and ODMs to stabilise their inventory procurement activities. This is providing a boost to the industry, as it reduces the risk of oversupply.
- Strict control of capacity utilisation rates by suppliers. Suppliers in the MLCC industry are strictly controlling their capacity utilization rates to maintain stability in the face of fluctuating demand. This is helping to ensure that there is enough supply to meet demand, and it is also helping to keep prices in check.
Overall, the MLCC industry is on the right track in 2H23. Demand is rising, inventory levels are normalizing, and suppliers are managing their capacity utilization rates effectively. This combination of factors is likely to lead to continued growth in the MLCC industry in the second half of the year.
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