The MLCC market is undergoing a quiet transformation.

Following a prolonged period of price pressure and inventory adjustments—during which manufacturers adopted a more cautious approach to capacity expansion—the situation has begun to shift as we head into the second half of 2026. Inventory levels are declining, orders are gradually picking up, prices for certain products are rising, and manufacturer capacity utilization rates are rebounding.

The convergence of several signals suggests that the MLCC market is transitioning from a previous state of oversupply toward a new equilibrium.

The most notable shift concerns distributor inventory levels.

Recent data from the industry supply chain indicates that inventory levels at MLCC distributors have fallen to one of their lowest points in recent years. However, the total value of this inventory has not declined in tandem; instead, it has actually increased. In simple terms, while there is less stock in the warehouses, the remaining items carry a higher price tag.

Characteristics of MLCC Price Increases

This is, in fact, more noteworthy than a simple price increase.

For a sustained rise in MLCC prices to occur, two conditions generally need to be met simultaneously: inventory levels must be relatively low, and downstream demand must begin to recover. If demand rises while inventory remains ample, manufacturers struggle to find significant room to raise prices; conversely, if inventory is low but demand fails to pick up, price increases are unlikely to be sustainable.

Currently, the market is gradually seeing both of these conditions emerge.

Looking at the status of major manufacturers—such as Murata, Samsung Electro-Mechanics, TDK, and Yageo—distribution inventory levels have fallen significantly, with some even dropping below the lows seen during the previous industry cycle. At the same time, order intake for companies like Murata and Taiyo Yuden has shown clear improvement, and capacity utilization rates on certain production lines are once again approaching high levels.

This signals an important shift: MLCC manufacturers no longer need to resort to price cuts—as they did in previous years—to compete for orders.

This change in supply and demand dynamics is particularly pronounced in the mid-to-high-end MLCC segment.

Price competition is becoming increasingly intense

This is especially true for mid-to-high-end MLCCs (Multi-Layer Ceramic Capacitors), where shifts in supply and demand are more pronounced.

While there are many suppliers for MLCCs used in standard consumer electronics—leading to intense price competition—the requirements for higher reliability and performance in automotive electronics, industrial equipment, servers, and high-end end-products have raised the barriers to entry for mid-to-high-spec MLCCs.

For these types of components, downstream customers are unlikely to switch suppliers simply to save a few cents. Factors such as product certification, reliability validation, and long-term supply stability create strong, "sticky" relationships between suppliers and their clients.

Consequently, when supply for high-end products begins to tighten, price increases are far more likely to occur than they would for standard, commodity-grade MLCCs.

Currently, there are already signs that the market has begun stocking up in anticipation.

The reason behind this is quite straightforward. When customers notice their inventory levels dwindling—compounded by lengthening supplier lead times and rising prices for certain products—their procurement strategies naturally shift. Instead of purchasing only enough stock for a single month, they may begin securing larger quantities well in advance.

The same applies to distributors.

Consequently, a subtle but significant shift emerges: while actual demand may not have experienced a sudden, explosive surge, the practice of "pulling forward" procurement effectively concentrates demand—which would otherwise be spread over the coming months—into the present.

This is precisely why there has been a noticeable intensification in procurement activity within the MLCC market of late.

Trends following Q4

This trend is expected to continue into the fourth quarter.

On one hand, the second half of the year is traditionally a period for the electronics industry to stock up; new product launches, end-user promotions, and the year-end peak sales season in overseas markets all drive procurement demand. On the other hand, demand from the automotive electronics and industrial sectors remains relatively stable and is unlikely to vanish due to short-term fluctuations in consumer electronics.

More importantly, unlike during the previous industry peak, MLCC manufacturers have not engaged in large-scale capacity expansion over the past few years.

Following a period of inventory adjustment, manufacturers have become more cautious regarding new capacity. Should demand recover, supply will struggle to keep pace in the short term—particularly for mid-to-high-end MLCCs, which require longer lead times for capacity expansion and product certification.

Therefore, the real focus for the market is not whether there will be a sudden, explosive surge in demand, but rather the fact that demand is gradually returning while supply remains largely unchanged.

Declining inventory levels serve as the first signal, followed by a rebound in orders and an increase in capacity utilization rates. Rising prices are the most direct consequence of a shifting supply-demand dynamic within the industry chain.

If this trend persists through the fourth quarter, the operating environment for MLCC manufacturers is likely to see further improvement.

For leading players such as Murata, Samsung Electro-Mechanics, TDK, Yageo, and Taiyo Yuden, lower inventory levels, higher utilization rates, and improved demand for mid-to-high-end products will gradually strengthen their bargaining power.

The MLCC market—long suppressed by excess inventory—is reaching a new turning point.

Supplies are tightening, orders are increasing, and prices have begun to rise.

Based on the signals currently emerging, the fourth quarter for the MLCC market is one to watch.

Source: Jiuru News

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