Open Source Securities: The industry's supply-demand shortage continues to deepen, and domestic MLCC manufacturers' Q3 price increases are expected to materialize.

Open Source Securities released a research report stating that global original manufacturers' price increases will continue throughout 2026, and the supply-demand shortage across the entire MLCC industry will continue to deepen. In this round of MLCC price increases, in addition to original manufacturers passing through prices to ease cost pressures, it is also a decision by original manufacturers to actively suppress mid- and low-capacitance orders and free up production capacity to ensure high-end supply in the face of rapidly growing demand for high-capacitance and ultra-high-capacitance products for AI servers. Domestic original manufacturers may see price increases materialize in Q3, and the MLCC industry is expected to maintain high prosperity over the long term. Overall, the widening supply-demand gap and clear price increase expectations are forming a resonance, which is expected to drive the domestic and overseas MLCC industry chain into a high-prosperity development channel of "rising volume and price." The main views of Open Source Securities are as follows: Samsung wins a major server-grade long-term agreement, Murata implements structural production halts, and the high-end MLCC gap may continue to widen According to a report by Shanghai Securities News, Samsung Electro-Mechanics recently disclosed that it signed an MLCC and inductor supply contract worth more than KRW 285 billion (about USD 212 million) with a major global customer. This is another breakthrough following the KRW 1.07 trillion (about USD 796 million) full-year 2027 AI server MLCC order received on September 1. So far this year, Samsung Electro-Mechanics has locked in a total of four MLCC long-term agreement orders extending to the end of 2027, totaling KRW 2.11 trillion; in addition, it has also won about KRW 1.5 trillion in silicon capacitor orders. With the growth of global AI computing power demand, the production capacity gap for high-capacitance and above MLCCs may continue to widen: on the one hand, Samsung has repeatedly signed LTAs extending to 2027 to lock in its 2027 production capacity, confirming that demand for AI server-grade MLCCs remains tight; on the other hand, Murata launched product line optimization in fiscal year 2026 and explicitly discontinued certain consumer-grade and automotive-grade part numbers such as GRM and GCM, potentially freeing up capacity to shift toward ultra-high-capacitance products. However, its official timetable shows that customer confirmation will not be completed until the end of 2027, last-time buy (LTB) will be extended to March 2028, and final shipments will run until 2029. This lengthy EOL timeline proves that capacity conversion and expansion from consumer-grade and automotive-grade to AI server-grade require a relatively long cycle. Global original manufacturers' price increases continue throughout 2026, and the supply-demand shortage across the entire MLCC industry continues to deepen Since 2026, the wave of price increases among global MLCC original manufacturers has continued to deepen, with price increase letters being implemented one by one starting in February. In February, Yageo took the lead in raising prices for high-voltage and high-capacitance MLCCs by 10%-20%; in March, Murata adjusted prices for AI server and high-end automotive-grade products by 15%-35%; in April, Taiyo Yuden raised prices for consumer low-capacitance and automotive MLCCs by 6%-13%, with Samsung Electro-Mechanics following suit; in June, Walsin Technology followed. In July, Yageo successively launched price increases across its entire series to ease cost pressures from high upstream raw material prices; in August, Samsung Electro-Mechanics uniformly raised shipment prices across all categories by 30%, triggering preventive stockpiling by distributors and creating a supply-demand divergence in which "actual ODM orders declined while channel orders climbed." According to TrendForce, Q4 consumer-grade mid- and high-capacitance quotes are still expected to rise by 10%-20%, and Samsung Electro-Mechanics plans to raise prices for consumer-grade X5R MLCC customers by an average of 25% to 30% in 2026Q4, partly to reduce orders and release capacity for high-end production. The bank believes that in this round of MLCC price increases, in addition to original manufacturers passing through prices to ease cost pressures, it is also a decision by original manufacturers to actively suppress mid- and low-capacitance orders and free up production capacity to ensure high-end supply in the face of rapidly growing demand for high-capacitance and ultra-high-capacitance products for AI servers. Domestic original manufacturers may see price increases materialize in Q3, and the MLCC industry is expected to maintain high prosperity over the long term The bank believes that domestic MLCC original manufacturers were previously in a global price depression, and the pricing benefits from manufacturers' adjustments in June-August have not yet been reflected in 2026H1 financial reports. As Q3 price increases are concentrated and materialize, domestic original manufacturers' Q3 performance is expected to achieve strong year-on-year and quarter-on-quarter growth; looking ahead, from 2026Q4 to 2027H1, domestic and overseas original manufacturers may set off a new round of price increases. From the perspective of the supply-demand landscape, under the dual effects of Samsung locking in production capacity through 2027 long-term agreements and Murata still needing time to ramp up after production conversion, the global production capacity gap for high-capacitance and above products may further intensify and is expected to continue widening in 2027, creating a golden window for domestic original manufacturers to accelerate customer penetration and share gains. Overall, the widening supply-demand gap and clear price increase expectations are forming a resonance, which is expected to drive the domestic and overseas MLCC industry chain into a high-prosperity development channel of "rising volume and price." Investment recommendations Beneficiary targets: (1) Domestic MLCC original manufacturers: Chaozhou Three-Circle (Group), Guangdong Fenghua Advanced Technology, Shenzhen Sunway Communication, Fujian Torch Electron Technology, Suzhou Gyz Electronic Technology, etc.; (2) Upstream material manufacturers: Zhejiang Jiemei Electronic And Technology, Jiangsu Boqian New Materials Stock, Shandong Sinocera Functional Material, etc. Risk warnings: AI industry development falling short of expectations, raw material price increase risk, expansion falling short of expectations, technology R&D falling short of expectations risk