AI Server Demand Tightens MLCC Supply, Yageo Retains Overweight Rating

Multilayer ceramic capacitors, or MLCCs, are critical passive components used in power and signal control systems for AI chips and servers. Faster AI server upgrade cycles and rising production of custom ASICs developed by cloud service providers are driving demand for high-end specifications. Because these products face high capacity and certification barriers, tighter supplies could directly affect equipment production schedules and costs.

The book-to-bill ratios of major Japanese and South Korean MLCC manufacturers have recently climbed to their highest levels since the pandemic. With new AI chip platforms expected to enter mass production progressively from the second half of 2026, other products may compete for high-end capacity, increasing the risks of longer lead times and higher prices. Available reports do not identify individual manufacturers or disclose book-to-bill figures, price increases or related monetary amounts.

Multilayer ceramic capacitors, or MLCCs, are essential passive components used in servers, consumer electronics and automotive equipment. Rapid growth in AI servers and related applications is crowding out capacity for standard MLCCs, fueling expectations that tightening supply and demand will trigger a new round of price increases. Yageo, with its broad product portfolio, is therefore seen as a major beneficiary.

As of July 20, 2026, Goldman Sachs sharply raised its price target for Yageo to NT$1,490, citing the capacity squeeze caused by AI demand and the possibility that standard MLCCs could enter a cycle of significant price increases. The upgrade reflects market expectations for improvements in Yageo’s product pricing, capacity utilization and profitability.

Multilayer ceramic capacitors (MLCCs) are critical to power delivery, filtering and voltage stabilization in servers. AI racks require far more of them and involve much more complex manufacturing than conventional equipment, crowding out low- and mid-range capacity at Japanese and South Korean suppliers. Yageo can absorb spillover orders and has pricing power in chip resistors and tantalum capacitors, making it a major beneficiary of a new passive-component price-hike cycle.

On June 2, JPMorgan and Morgan Stanley both rated Yageo "Overweight," with price targets of NT$1,000 and NT$1,010, respectively. Morgan Stanley raised its target again to NT$1,355 on June 15 and then to NT$1,515 on June 23. The brokerage also estimated that Yageo would raise average direct-customer prices by 30%–40% in the second half, with average MLCC selling prices set to rise another 67% in 2027.

Multilayer ceramic capacitors, or MLCCs, are critical passive components that help stabilize server power supplies. Rising power consumption and component use in AI servers have prompted major Japanese and South Korean manufacturers to shift capacity toward high-end products, squeezing supplies of standard models. Yageo has expanded into tantalum capacitors and other product lines through acquisitions, transforming itself into a one-stop passive-components platform and a major beneficiary of the shortage and price-hike cycle.

Citi Global Markets reiterated its buy rating on Yageo on May 14, 2026, raising its price target to NT$495 from NT$400. Lead times for standard MLCCs have lengthened to 12–16 weeks from 8–12 weeks. Yageo reported April revenue of NT$14 billion, up 22% year on year. TrendForce said on May 20 that Taiyo Yuden had raised prices by 6%–13% in April, while Samsung Electro-Mechanics and Murata Manufacturing were also considering increases.