``` Capacitor giant Nichicon implements comprehensive price increases; AI server demand triggers shortage of aluminum electrolytic capacitors. ```

``` Capacitor giant Nichicon implements comprehensive price increases; AI server demand triggers shortage of aluminum electrolytic capacitors. ```

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The global aluminum electrolytic capacitor supply chain is facing a dual impact from demand and cost.

Earlier this week, Nichicon, the leading Japanese manufacturer of aluminum electrolytic capacitors, announced a comprehensive price increase across all its aluminum electrolytic capacitor products. The price increase reportedly expanded from the previous 9%-12% to 10%-15%.

The main drivers behind this round of price hikes come from two fronts: The explosion of demand for AI servers has pushed some product orders beyond Nichicon's existing production capacity, and ongoing instability in the Middle East has driven up costs for key raw materials such as aluminum foil, chemical materials, and electricity, making procurement increasingly difficult. Nichicon stated in an open letter to customers that the company has adopted internal measures such as increasing equipment purchases, employee overtime, and weekend shifts, but the current trend of rising costs can no longer be fully offset internally.

Supply-demand gap widens, Nichicon forced to raise prices across the board

Nichicon clearly pointed out in its announcement that order volumes for some aluminum electrolytic capacitor products have exceeded the company's existing production capacity, and the company is continuously advancing equipment expansion efforts. However, affected by instability in the Middle East, costs for key raw materials—aluminum foil, related chemical materials, and electricity—continue to rise, and material procurement is becoming increasingly difficult.

Nichicon stated that in order to meet order demand, the company has adopted multiple response measures such as increasing equipment purchases, employee overtime, and weekend shifts, but the current magnitude of cost increases has exceeded the company's capacity to absorb internally. After comprehensively evaluating market conditions, the company has to adjust prices for all aluminum electrolytic capacitor products to ensure stable supply, continued development of new products and equipment upgrades, and safeguard product quality.

Meanwhile, another major Japanese aluminum capacitor manufacturer, Nippon Chemicon, also announced price hikes.

The simultaneous actions of the two leading Japanese manufacturers have further reinforced market expectations of tight supply and rising prices for aluminum electrolytic capacitors.

The rapid expansion of demand for AI servers is the key background for this round of supply-demand imbalance in aluminum electrolytic capacitors. Manufacturers have previously generally reported full capacity and are planning expansions to accommodate future AI-related orders.

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