The four industry giants "stamp their confirmation": "Passive component MLCC" is experiencing the "longest shortage in history."

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The passive component industry is standing at a historic turning point. At their shareholder meetings, the four major MLCC leaders—Yageo, Walsin Technology, Harmony Electronics, and Cyntec—expressed a unanimous optimistic outlook, confirming that this round of AI-driven shortage cycle will surpass the 2018 passive component super cycle, becoming the longest supply-demand imbalance in history.

According to Taiwan's "Commercial Times" Sunday report, Walsin Technology was the first to extend the timeline of the shortage tide beyond 2027. The company's General Manager, Zeng Mingcan, pointed out that the AI server market’s scale is only a few million units, while AI PC shipments could reach 200 million units. Once memory supply becomes smooth and AI edge devices ramp up, the shortage effect will deepen further: "AI infrastructure driving passive component demand is only the first wave," and Harmony Electronics predicts that the supply-demand gap will widen further next year.

This round of shortages is not a short-term pulse, but rather a structurally supported long-cycle market. Major manufacturers have already started expanding production. The upstream equipment delivery lead time has become the core bottleneck of capacity release, and supply can't keep up with the explosive pace of demand.

The four giants unanimously optimistic, Yageo’s order-ship ratio surpasses Murata

At recent shareholder meetings of tech companies, the prosperity signals of the MLCC supply chain have attracted strong market attention. Yageo, Walsin Technology, Harmony Electronics, Cyntec, and the passive component distribution leader Ritek all released optimistic outlooks during their meetings.

Among them, Yageo’s order-ship ratio (B/B value) has climbed above 1.3, reportedly surpassing Japanese leader Murata. According to Commercial Times, the market rumors have it that Yageo's chairman Chen Taiming has issued an order to increase production, demanding all production lines to maximize MLCC utilization rates, with the company preparing to use three strategies: raising utilization rate, stocking inventory, and removing capacity bottlenecks to meet the surge of orders. However, Yageo’s official channels have not yet confirmed this news.

It’s noteworthy that last week, passive component stocks welcomed an unlocking wave. Due to several companies extending their disposal periods twice, Yageo, Ritek, Harmony Electronics, Cyntec all hit their upper limit with strong gap-up performances on the first trading day after unlocking. Walsin Technology, which has been “locked” the longest, will soon be unlocked, and the MLCC sector is expected to gradually emerge from the shadow of split trading.

Walsin Technology sets the tone: This shortage will surpass the 2018 super cycle

Walsin Technology is the most clear "tone-setter" in this shortage tide. General Manager Zeng Mingcan compares this wave to the effects in 2018 when Japanese manufacturers withdrew from consumer electronics and shifted to automotive electronics, causing order shifting, and believes the current AI-driven rigid demand has surpassed that period both in scale and duration.

Zeng Mingcan’s logic has two layers: The first wave of demand is from AI infrastructure construction—large-scale deployment of data centers and AI servers; the second wave is from the popularization of AI terminals—AI PC’s potential shipment volume can reach 200 million units, far exceeding the scale of the server market. He noted that once the bottleneck in memory supply is resolved and AI edge devices enter mass production, the MLCC shortage effect will deepen further.

Based on this analysis, Walsin Technology has extended its forecast for the shortage tide beyond 2027, providing the most aggressive and valuable time estimate for the industry's prosperity cycle.

Equipment lead time becomes expansion bottleneck, Harmony Electronics releases capacity in stages

Despite major manufacturers actively preparing, the expansion process is restricted by lengthened upstream equipment delivery lead time, becoming the main obstacle to capacity release.

Harmony Electronics Chairman Tang Jinrong revealed at the shareholder meeting that delivery cycle for high-end passive component equipment has reached 1 to 1.5 years. The equipment Harmony Electronics plans to introduce in the second half of the year was actually ordered two years ago, and will be phased in during Q3 this year and Q1 next year. Based on this, Harmony Electronics’ capacity is expected to increase 20% to 30% this year, and another 30% to 40% in 2027. Tang Jinrong also warned that next year’s supply-demand gap may widen.

For Walsin Technology, due to long-term stable cooperation with equipment suppliers, it holds a favorable position in the suppliers’ order queues. Even so, Walsin Technology said Japanese equipment suppliers’ delivery cycle still reaches half a year to a full year, and Taiwanese suppliers need 3 to 6 months. The pace of expansion still cannot fully satisfy demand. Walsin Technology’s capex this year has tripled compared to before, and will advance its expansion plan for two consecutive years.

Demand side: AI edge devices may be the next round of acceleration catalyst

From a demand structure perspective, the driving force of this MLCC shortage tide is clearly layered and persistent, which is the core reason why the industry chain generally expects a prolonged prosperity.

The first layer of demand comes from infrastructure investment in AI servers and data centers. This wave has been continuously released over the past year and directly pushed MLCC orders to rise rapidly. The second layer of demand remains in the preparation stage—widespread adoption of AI PCs and various AI edge devices, which, once memory supply is smooth, will further open incremental space.

Walsin Technology General Manager Zeng Mingcan’s judgment implies that the currently observed shortage pressure may only be the first half of the entire demand cycle. As AI applications penetrate from the cloud to the terminal, MLCC’s demand base will keep growing. The supply side, hindered by delayed equipment delivery and expansion, cannot fill this gap effectively in the short term. This supply-demand configuration forms the foundation for the four giants’ optimistic outlook on the future market.

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