According to a report by TrendForce, the first quarter of 2024 is expected to witness a 7 percent quarterly reduction in MLCC (multilayer ceramic capacitor) shipments, totaling 1.1103 trillion units.
Despite this overall slowdown, there has been a resurgence in demand for AI (artificial intelligence) chips, attributed to improved supply from industry giants like Nvidia and AMD. Consequently, there has been an uptick in procurement activities for AI servers by Original Design Manufacturers (ODMs) such as Quanta, Compal, and Inventec. This trend has particularly benefited major manufacturers like Murata, Taiyo Yuden, Samsung, and Yageo.
Conversely, demand for smartphones, PCs, notebooks, and general-purpose servers remains weak. While the Chinese smartphone market has sustained its procurement momentum from the fourth quarter of 2023, Apple’s smartphone orders have seen a nearly 20 percent decline in the first quarter of 2024.
The supply of notebooks and general-purpose servers has remained steady. Despite disruptions in major shipping lanes leading to longer shipping times, there has not been a significant increase in Original Equipment Manufacturers (OEMs) placing early orders with ODMs.
The absence of notable pre-holiday procurement and an overall tepid market demand reflect a subdued outlook for the first quarter. TrendForce predicts that if orders do not improve in March, the average BB ratio for MLCC suppliers may fall to 0.89 — a 3.3 percent decrease from the previous quarter.
Slowdown in Order Demand Amid Tightened Production Control
Against the backdrop of slowing growth in the Information and Communications Technology (ICT) sector, industry giants like Murata and Samsung are facing challenges, with their latest quarterly reports showing dips in both revenue and profit.
The overstocked market scenario is compelling suppliers to intensify efforts in managing production and inventory levels carefully to navigate persistent pricing pressures. Despite steady orders from certain sectors such as AI servers and select Chinese smartphone brands, the outlook for notebooks and general-purpose servers for the upcoming second quarter appears tepid, with expectations of only marginal or flat growth.
Intel is poised to inject excitement into the market with its 2024 Meteor Lake platform, boasting enhanced AI capabilities due to additional NPUs (Neural Processing Units). These upgrades are not solely focused on boosting computational performance but are also expected to significantly increase demand for MLCCs due to higher power consumption and operational temperatures.
Each device is projected to require around 90–100 additional capacitors, particularly in key specifications like 2.2u 0201, 10u 0402, and 4u 0603. With the gradual introduction of new platform models in the second half of the year, even if overall notebook orders remain constant or slightly increase, demand for MLCCs is expected to grow.
