Murata Vice President: MLCC Boom to Last Until at Least 2028, Plans "Bold" Capacity Expansion!

News from September 14: Masanori Minamide, Vice President of Murata Manufacturing, the global leader in multilayer ceramic capacitors (MLCCs), stated in a recent exclusive interview with Nikkei that due to sustained strong demand for MLCCs used in artificial intelligence (AI) servers, this growth trend is expected to "last at least until 2028." The company is "boldly evaluating" its MLCC capacity expansion plans for the next 3-5 years.

Strong Demand for AI Servers Prompts Murata to Consider "Bold" Capacity Expansion

In the interview, Minamide pointed out, " The number of MLCCs installed per AI server continues to increase. In addition to small, high-capacity products, market demand for high heat-resistant MLCCs is also rising, with products continuing to evolve toward higher added value." He further outlined longer-term trends: " From a medium-to-long-term perspective, the market is expected to expand from AI data centers to edge AI devices. Among these, Physical AI (referring to applications such as AI-controlled robots) is highly anticipated."

Industry research data corroborates this judgment. According to TrendForce, Nvidia's VR200 NVL72 server will use approximately 600,000 MLCCs, more than 30% higher than the existing GB300 platform; the MLCC usage in AI servers is about 8 to 12 times that of traditional general-purpose servers.

Another key figure reveals the tightness of supply for high-end MLCCs: lead times for high-value-added MLCCs have sharply extended from 8-10 weeks to over 20-26 weeks. This drastic lengthening of lead times indicates that high-end capacity cannot keep pace with demand growth, requiring Murata to allocate more resources to cope.

Murata's own data is even more intuitive: In the first quarter of fiscal 2026 (April-June), Murata's total orders reached 673.9 billion yen, a year-on-year increase of 56.3%, setting a quarterly record high; among these, capacitor orders surged 85.5% to 415.5 billion yen. The book-to-bill (BB) ratio for standalone MLCCs reached a high of 1.34, remaining above the threshold of "1" indicating active order intake for the seventh consecutive quarter.

Under Murata's current plan, it will invest approximately 80 billion yen in MLCC production equipment over the two years ending in fiscal 2027, increasing MLCC production capacity by more than 20% in fiscal 2027.

In an August research report, UBS Securities noted that Murata's existing equipment has potential for about a 20% capacity increase, but physical expansion is nearing its limit. Future physical capacity expansion will mainly rely on three sources: the new Izumo Murata building completed in April 2026, a new factory on land already purchased in Yasugi City, Shimane Prefecture, and capacity released by transferring general-purpose products to the Thailand factory.

However, this additional capacity is clearly insufficient to meet the robust future demand from the AI server market. In response, Murata has begun to "boldly evaluate" its MLCC capacity expansion plans for the next 3 to 5 years.

Minamide stated, " We originally prepared with trends such as the popularization of autonomous driving in mind, so facilities required until 2028 were laid out earlier than other peers. On the other hand, considering customer expectations, we anticipate that demand will continue to expand after 2028."

Minamide further pointed out, " Looking ahead 3-5 years, we are deliberating capacity expansion plans including facilities. I believe this evaluation will be bolder than in the past. No decisions have been made internally yet, but quite in-depth assessments are underway. Building larger-scale new factories within existing domestic and international sites is also a possible option."

Gradually Discontinuing Old MLCC Part Numbers?

Notably, just a few days ago, industry rumors suggested that Murata had issued a formal End-of-Life (EOL) product change notification to customers: initiating product line optimization in fiscal 2026, gradually discontinuing specific MLCC part numbers covering nine series including GRM, GRJ, GRT, GXM, GXT, GCM, GCJ, GCG, and ZRA, with applications involving consumer electronics, industrial equipment, and some automotive sectors.

Among these, the discontinued GRM series is Murata's flagship commodity MLCC product line. Although this decision targets specific part numbers rather than the entire series, given GRM's market position, the affected volume could be considerable.

Rumors also indicated that Murata requested customers to confirm alternative solutions by December 31, 2027. However, Murata provided a transition window of over two years, with the last order date being March 31, 2028, and the final shipment date being March 31, 2029.

However, the above rumors have not been officially confirmed.

If the rumors are true, this seems to imply that Murata expects the "crowding-out effect" of AI servers on MLCC capacity to truly begin manifesting next year. Initiating product line adjustments now serves to prepare for capacity release after 2028.

Murata's Pricing Strategy: Not Following Supply and Demand Fluctuations

Amid the shortage of MLCC supply, prices have continued to soar. Samsung Electro-Mechanics, a major MLCC manufacturer, previously notified sales partners that it would raise MLCC product prices by 30% starting August 2026.

Regarding Murata's MLCC pricing strategy, Minamide pointed out that Murata's "policy based on building long-term trust relationships with customers remains unchanged. If prices are raised or lowered according to changes in supply and demand, it would easily attract new entrants to the market. I believe that a pricing strategy prioritizing short-term profits does not help enhance medium-to-long-term corporate value."

However, he left room for maneuver: "If competing peers significantly adjust prices, it may affect our originally planned product mix and production layout. Therefore, we are closely monitoring peer and market movements."

This seems to echo Murata's actual actions, choosing to gradually "discontinue old part numbers" rather than "raise prices across the board," which is essentially a more subtle supply-side adjustment. By eliminating low-margin products, Murata has improved the profitability of its overall product mix while avoiding stimulating new competitors to enter the market due to direct price hikes.

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