Goldman Sachs: The boom cycle for advanced MLCC may last longer than expected

After meeting with Murata Manufacturing’s president, Goldman Sachs believes that the AI-driven advanced MLCC demand cycle is expected to extend to around 2030, far exceeding previous expectations, and the company’s competitive advantages in this field are gradually being realized.

According to Chase Wind Trading Desk, on May 27, Murata Manufacturing’s president Norio Nakajima attended a sell-side analyst meeting, addressing key topics such as the AI cycle, MLCC pricing strategy, and capacity expansion. Based on this, Goldman Sachs maintains its buy rating (on the conviction list) for Murata, with a 12-month target price of 5,400 yen.

Goldman Sachs believes that this meeting further confirms its view that Murata is still in the early stages of growth—for the MLCC industry, the AI cycle may be the largest and longest boom cycle, and Murata is expected to capture a significant share of the AI-related MLCC market thanks to its strategic layout and competitive strength.

AI cycle may extend to 2030, edge AI opens the second growth curve

Murata previously predicted that AI infrastructure investment would peak around 2028, but at the meeting, Norio Nakajima stated that due to constraints such as power shortages, AI infrastructure expansion could last until around 2030, and the boom cycle may be further extended.

Meanwhile, edge devices with differentiated characteristics, such as autonomous driving/software-defined vehicles (SDV) and humanoid robots, are expected to see significant growth in the coming years. Goldman Sachs notes that this creates opportunities for Murata to further expand in advanced MLCCs, sensors, and other small and lightweight devices, with a potentially longer-lasting cycle.

MLCC pricing logic: platform iteration drives substantial price increases

Regarding pricing strategy, Murata’s management clarified that for AI server MLCCs, it is not direct price increases for the same product, but rather setting prices for new products as platforms are upgraded each year and Bill of Materials (BOM) is significantly improved.

Goldman Sachs interprets this mechanism as: although superficially it’s a mix improvement, in essence it’s a price reset, effectively equivalent to a price increase. This pricing logic means that as AI server platform upgrades continue, Murata’s MLCC unit price is expected to maintain a systematic upward trend.

Efficient capacity expansion, AI server TAM structure is clear

Regarding capacity planning, Murata stated that the additional 80 billion yen in capital expenditure is dedicated to high unit price AI applications, and in many cases, capacity expansion can be achieved simply by adding some processes to existing production lines, with expected high investment return efficiency.

In terms of the potential market size (TAM) structure for AI server MLCCs, Murata’s management pointed out that advanced products with low voltage and high capacity occupy the largest share. Among them, GPU/ASIC boards have the largest TAM, followed by vertical power delivery power supplies and network switches. The TAM for high voltage, high capacity primary/secondary power supplies is relatively limited.

Silicon capacitor competitive landscape: MLCC superiority remains prominent

In the technical route competition between silicon capacitors and MLCCs, Murata believes that the companies currently mastering silicon capacitor technology include TSMC, Samsung Electro-Mechanics (SEMCO), and Murata itself. For applications embedding capacitors in packaging substrates, silicon capacitors have advantages due to their thinness, good surface flatness, and high reliability in circuit connection; however, MLCCs perform better in terms of capacity and ease of customer use.

Murata also stated that the company is developing MLCC products with high connection reliability, and both technical routes can be applied in the future. Goldman Sachs believes that this shows Murata has strong flexibility in technical reserves and will not lose its market position due to potential competition from silicon capacitors.

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