MLCC prices are rising amid frantic stockpiling; Yageo and Walsin Technology are swamped with orders.

01 Wave of Panic Buying: Price Premiums & Rush to Lock in Long-Term Contracts

According to Taiwan’s *Economic Daily* report dated August 10, AI is driving robust demand for passive components. Major MLCC makers are inundated with orders and operating near full capacity, with lead times extended to 12–16 months. Leading suppliers allocate existing capacity primarily to large clients. To secure adequate inventory, small and medium-sized customers have no choice but to offer price premiums. For some urgent orders, buyers are willing to pay two to three times the original price just to obtain shipments.

Commenting on market conditions, Yageo acknowledged that MLCC demand is exceptionally strong. Rising market momentum is evident across capacity utilization rates, new customer projects and demand for long-term supply agreements. In particular, an increasing number of AI-related clients aim to lock in capacity in advance to mitigate future supply risks.

Yageo previously stated at its earnings conference that supply and demand for passive components are improving. The firm expects capacity utilization for both general-purpose and specialty MLCC products to rise this quarter. Utilization for general-grade products is set to climb from roughly 80% in Q2 to over 90%, while specialty grades will remain above 90% at a high level, with overall operations moving toward full capacity.

To meet customer demand, Yageo is expanding production simultaneously across its manufacturing sites in Kaohsiung (Taiwan, China), Suzhou (Chinese mainland), Vietnam and Mexico. As relevant equipment is delivered successively, new capacity will be ramped up quarter by quarter.

The overwhelming demand has also given rise to a new trend: customers rushing to sign long-term supply contracts.

Yageo explained that a growing number of AI-related clients intend to secure passive component supplies for the next six months or even several years in advance via long-term agreements, so as to mitigate supply chain risks.

Industry analysts note that global major MLCC manufacturers still prioritize allocating capacity to large customers and long-term partners. Especially with rapid volume growth in high-end applications such as AI servers and data centers, demand for high-capacitance and high-reliability products has surged. Large customers generally enjoy higher priority in capacity allocation.

In contrast, supply available to small and medium-sized customers is squeezed. Faced with depleted inventories and fears that material shortages will disrupt end-product shipments, they have no option but to bid higher prices for limited stock, further stoking price-chasing sentiment in the market.

Another major Taiwanese MLCC manufacturer, Walsin Technology, is also overwhelmed with business.

Tseng Ming-Tsan, General Manager of Walsin Technology, disclosed that the company has seen a marked upturn in order momentum recently. Its book-to-bill (B/B) ratio has climbed to 1.8, indicating the firm cannot fulfill orders fast enough.

Industry analysts point out that the book-to-bill ratio serves as a key barometer of business conditions. A reading above 1 signals an expanding market, while a figure below 1 suggests a downturn. During an upturn, a B/B ratio hitting 1.5 is already considered exceptionally strong. Walsin’s current ratio of 1.8 underscores an unprecedentedly booming order intake.

Tseng Ming-Tsan revealed that demand for MLCCs, resistors and other products is rising in tandem. Order momentum is not concentrated in a single application. Led by AI servers, demand from PCs, automotive electronics and certain consumer electronics segments is following suit, with order visibility extending beyond six months.

In addition, Walsin Technology has observed an obvious order-shifting effect. Leading global passive component manufacturers are diverting more high-end capacity toward high-growth applications such as AI servers. Some capacity previously allocated to consumer electronics has therefore been squeezed, prompting other suppliers to take over orders transferred from consumer products including mobile phones.

In other words, AI-driven growth boosts passive component demand not only for servers, but also triggers capacity reallocation across the global supply chain.

Regarding the much-watched price trend, Tseng Ming-Tsan commented that prices have indeed seen adjustments. Pricing is primarily determined by cost fluctuations and market supply-demand balance, as well as customers’ acceptance levels. When market demand strengthens and available capacity tightens, prices will naturally reflect the fundamentals of supply and demand.

02 Yageo and Walsin Technology both saw strong second-quarter results.

Yageo and Walsin Technology both delivered robust growth in their latest quarterly financial results.

For Yageo, consolidated revenue in the second quarter reached NT$44.456 billion, rising 16.5% quarter-on-quarter and 35.7% year-on-year. Gross margin stood at 38.5%, up 0.4 percentage points quarter-on-quarter and 2.9 percentage points year-on-year. Net profit attributable to parent company amounted to NT$9.418 billion, representing a 17.7% quarter-on-quarter increase and an 88.5% year-on-year surge.

Cumulative revenue for the first half of the year hit NT$82.622 billion, a year-on-year rise of 29.3%. Gross margin was 38.3%, an improvement of 2.7 percentage points year-on-year; net profit attributable to parent reached NT$17.418 billion, climbing 65.5% year-on-year.

By product mix, sales of tantalum capacitors (accounting for 23.8% of revenue) grew 14.1% quarter-on-quarter and 44% year-on-year. MLCC (19.1%) and resistors (14.3%) outpaced overall revenue growth. By end-market application, AI-related businesses currently contribute 16% of the Group’s revenue. Industrial applications have grown for six consecutive quarters, automotive applications are gradually recovering, and demand from consumer electronics remains strong.

For Walsin Technology, consolidated revenue in the second quarter came to NT$11.310 billion, a year-on-year increase of 18.4%; gross margin reached 20.29%. Net profit attributable to parent swung from a loss of NT$215 million in the same period last year to a profit of NT$1.572 billion. Cumulative revenue for the first half of the year stood at NT$20.849 billion, rising 13.96% year-on-year.

Regarding capacity expansion, the General Manager stated that demand for inductors, resistors and other components remains strong, with rising orders across all passive component lines. Factory utilization rates are nearly full. Walsin plans to expand overall capacity by roughly 10% in the second half of this year, with another 10% expansion targeted for next year. Priority for this capacity expansion will be given to Taiwan, China.

In fact, the current industry upturn is not limited to Taiwanese manufacturers.

Looking at the six leading MLCC manufacturers — Murata, Taiyo Yuden, Samsung Electro-Mechanics, TDK, Kyocera and Yageo — all posted year-on-year revenue growth in Q2 2026. TDK and Yageo registered growth above 30%. Operating profit growth across the six firms generally outpaced revenue expansion, which typically signals improving profitability alongside rising sales.

Meanwhile, book-to-bill (B/B) ratios moved higher. Murata’s B/B ratio rose to 1.34 from 1.24 in the prior quarter, while Yageo’s overall B/B ratio reached 2.2 as of end-June. According to TrendForce statistics, Samsung Electro-Mechanics and Taiyo Yuden saw their B/B ratios climb to 1.31 and 1.25 respectively by the end of June.

On lead times, Fusion Worldwide noted in its July report that lead times for certain MLCC products from Murata and Taiyo Yuden have stretched to 20–52 weeks. High-capacitance specifications including 0805 10μF/22μF and 0603 22μF/47μF face the tightest supply.

Nevertheless, some component makers pointed out that current orders consist of both genuine end-market demand and inventory stocking activity, as several customers are building up inventories in advance.