Utilization of electronics and NPIs are both increasing year over year, which has led to a greater requirement for the MLCCs that play an essential role in all electronics. This necessity for MLCCs across industries means that demand far outweighs supply, making the current shortage situation inevitable. A main catalyst driving longevity and further exacerbating the shortage is the shift by MLCC manufacturers away from producing larger, legacy case sizes.
Toward the end of 2017, Murata was leading this shift, and – by the beginning of 2018 – other MLCC manufacturers like AVX, KEMET, TDK, and Yageo were also predominately producing smaller case sizes. This trend is expected to continue, but there are still many applications that require larger MLCC components.
Aspects contributing to the manufacturer shift
OEM and CM demand for smaller MLCC case sizes is rising. Product lifecycle management warrants moving old technology aside when new options are available, meaning that larger case-size MLCCs are being replaced with smaller ones so that they can fit on PCBs. As products like smartphones and laptops become thinner and lighter-weight, they need the components inside them to match. Smaller case-size MLCCs are the latest and most high-tech of their kind, therefore grabbing more attention across the industry.
The larger MLCC case sizes have been in production for around 10-15 years, with relatively stagnant sell prices. Since the smaller MLCC case sizes are a newer piece of technology, they have a much higher sell value. They can also be produced on the same machinery as the larger components without affecting overhead production costs. By mainly producing smaller MLCC case sizes, manufacturers are able to drastically increase their return on investment.
Usage of small and large MLCC case sizes by industry
MLCC case sizes are not interchangeable in applications. Engineering designs would need to be adjusted in order for a smaller case-size MLCC to be added in production. Higher-end applications like computers and mobile phones are forgoing the larger MLCC case sizes for the leading-edge smaller ones. This is driving up overall demand for MLCCs and contributing to the decrease in capacity for the larger case sizes. Industries where product designs do not change for a long period of time are deeply affected by the decrease in supply of larger case-size MLCCs. These sectors such as industrial, medical, and telecommunications also typically produce larger products with no need to adapt to the miniaturization trend. It is a necessity for these industries to use the traditional, larger MLCC case-sizes in their supply chains, but as a direct result of manufacturing shifts in capacity, they are experiencing a major strain.
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