MLCC value skyrockets 182%, Nvidia's new rack reveals AI's next big shortage

Original Title: Goldman, Morgan Stanley Sound Alarm: MLCCs Become AI Supply Chain's Scarcest Puzzle Piece, Nvidia Next-Gen Rack Usage Surges 182%

Original Author: BitGo Finance

Original Translation: Peggy

Editor's Note: Supply bottlenecks in AI infrastructure are spreading from GPUs, memory, data centers, and power systems to even more fundamental hardware components. Goldman Sachs and Morgan Stanley have recently turned their attention to MLCCs—multilayer ceramic capacitors long considered ordinary passive components.

In AI servers, MLCCs are responsible for stabilizing current and filtering noise, making them crucial components for ensuring high-speed chip operation. As Nvidia's next-generation rack architecture drives up MLCC usage per rack, their value is rapidly increasing. Goldman Sachs estimates that the AI server MLCC market will grow more than fourfold between 2025 and 2030, while industry capacity increases at just over 10% annually. This supply-demand mismatch is becoming the core variable of the current cycle.

More importantly, the price cycle has already begun. Japanese leaders Murata and Taiyo Yuden have taken the lead in raising prices, and Japanese export data is beginning to validate demand strength. For capital markets, the logic behind MLCCs is straightforward: demand comes from AI servers and high-end vehicles, supply expansion is constrained, and rising prices can significantly amplify profit margins.

From chips to capacitors, pricing power in the AI supply chain is shifting toward more segmented and less visible links. Whether MLCCs will become the "next memory chip" still depends on sustained AI server demand; but what is certain is that this once-overlooked basic component now stands at the starting point of a new cycle of simultaneous volume and price increases.

Below is the original text:

The supply bottlenecks in the artificial intelligence (AI) arms race are sequentially igniting opportunities across various hardware sectors. Following data centers, energy infrastructure, and memory chips as focal points for capital, Wall Street giants Goldman Sachs and Morgan Stanley have simultaneously identified a long-underestimated basic component in their latest reports: Multilayer Ceramic Capacitors (MLCCs). Both institutions predict that MLCCs will become the next key battleground for "simultaneous volume and price increases," and this AI-driven growth cycle could be the largest in history.

Goldman Sachs analyst Daiki Takayama noted in the report that the AI server MLCC market is expected to surge from approximately ¥215 billion (about $1.4 billion) in fiscal year 2025 to roughly ¥920 billion (about $5.8 billion) in fiscal year 2030—an increase of over four times, representing a compound annual growth rate of 34%. Goldman Sachs stated outright that the current AI-driven MLCC cycle "will be the largest and longest-lasting in history, and we believe it is still in its early stages."

MLCC: The 'Invisible Heart' Sustaining AI Server Operations

An MLCC (Multi-layer Ceramic Capacitor) can be understood as an extremely miniature charge-discharge unit with very fast response times. Unlike ordinary batteries that store large amounts of energy and release it slowly, MLCCs store very little energy but can charge and discharge within milliseconds or even faster. Their core function is to smooth power fluctuations and filter noise: absorbing instantaneous voltage spikes or rapidly supplying current during voltage drops, providing stable current to sensitive chips and blocking electrical interference that could disrupt digital signals.

The operational characteristics of AI servers make MLCCs indispensable. When an AI model performs large-scale computations, the processor's power demand can spike within microseconds and then drop to near zero once the computation ends. The power system itself struggles to respond quickly enough to such drastic fluctuations. MLCCs are typically installed directly near the AI chip, instantly releasing energy during power peaks to prevent server crashes. Since NVIDIA GPUs and other AI chips must simultaneously handle billions of tasks, a top-tier AI server rack may require up to 600,000 MLCCs working together to maintain system stability.

Goldman Sachs analyst Nelson Armbrust further pointed out that MLCCs have become the third most costly component in the AI server Bill of Materials (BOM), second only to GPUs and memory. The overall MLCC market is currently worth approximately $15 billion, with the server-related segment accounting for about $1.3 billion and expanding at an 80% compound annual growth rate. In contrast, demand growth in other application areas like automobiles and smartphones has slowed markedly. Daiki Takayama estimates that the cost share of MLCCs in the AI server BOM will gradually rise from the current ~0.5% to about 1%.

Structural Supply-Demand Imbalance: Annual Capacity Growth of Only 10% Unable to Withstand a Fourfold Demand Surge

The core factor igniting market attention lies in the severe structural supply-demand imbalance facing the MLCC industry. Goldman Sachs analyst Allen Chang explicitly noted that the entire MLCC industry's annual capacity growth rate is only slightly above 10%. Furthermore, because many equipment and materials depend on in-house production by manufacturers, expansion progress is constrained by internal engineering resources, making significant acceleration difficult. However, the demand shock from AI servers is on an entirely different scale. Goldman Sachs expects MLCC demand driven by AI servers to increase by approximately 4.3 times between fiscal 2025 and fiscal 2030.

Compounding market concerns, demand for high-voltage, high-capacitance MLCCs driven by automotive electrification remains robust, with per-vehicle MLCC usage continuously increasing. These two demand pillars—AI servers and electric vehicles—are jointly consuming the already limited newly added capacity. This has led to even consumer electronics clients actively seeking long-term supply agreements to hedge against future shortages, despite declining demand in their sector.

Signals of current market tightness are appearing on multiple fronts: lead times for high-end MLCCs (high capacitance, high voltage specifications) have exceeded 20 weeks; spot and distribution channel prices for low-capacitance and consumer-grade MLCCs have risen by 20% to 40% due to stockpiling and duplicate ordering; and prices of key raw materials like nickel and silver remain elevated, putting pressure on costs across various product categories.

Price Hike Cycle Officially Underway: Japanese Duo Takes the Lead, Official Data Confirms Trend

Price signals are rapidly strengthening. Price adjustment actions by Japan's two leading companies, Murata Manufacturing and Taiyo Yuden, mark the official start of the MLCC price increase cycle. Effective April 1 this year, Murata raised prices for MLCCs used in AI servers and high-end automotive applications by 15% to 35%. Taiyo Yuden has also notified customers that it will adjust prices across multiple product lines starting in May, covering MLCCs, inductors, RF devices, FBAR/SAW devices, and aluminum electrolytic capacitors, citing sustained increases in costs of precious metals and other raw materials.

Trade statistics released by Japan's Ministry of Finance on May 28 validate this price trend from a macro perspective. The data show that the average export price for MLCCs in April rose 3% month-over-month and 16% year-over-year. Export volume increased 10% year-over-year, while export value surged 28% year-over-year. Goldman Sachs believes this data confirms signals from recent Japanese MLCC manufacturers' earnings reports: all companies affirmed that order momentum remains strong.

Looking at the timeline across the AI supply chain, Goldman Sachs' analytical framework shows that MLCC price increases lag significantly behind core AI components like DRAM, NAND flash, ABF substrates, and copper-clad laminates (CCL). Therefore, Goldman Sachs judges that among all AI components and materials, MLCCs have the longest runway and strongest persistence for price increases. The firm has revised its 2026 year-over-year MLCC price change forecast from approximately 0% previously to a range of 0% to +5%, emphasizing that actual future increases could be significantly higher.

Striking Profit Elasticity: A 5% Price Increase Could Boost Operating Profit by Up to 37%

For investors, the profit elasticity arising from the MLCC supply-demand mismatch should not be underestimated. Daiki Takayama estimates that a mere 5% product price increase could theoretically boost Murata's operating profit for fiscal 2027 by approximately 13%, and Taiyo Yuden's operating profit by up to 37%.

Goldman Sachs forecasts Murata's fiscal 2027 sales to reach ¥1.05 trillion (approximately $6.6 billion), a 13% year-over-year increase. Taiyo Yuden's sales are expected to reach ¥286 billion (approximately $1.8 billion), also a 13% year-over-year increase. Goldman Sachs maintains a "Buy" rating on Murata, Taiyo Yuden, and TDK. Its constructed Asian MLCC theme stock portfolio has recently begun to strengthen but still shows significant catch-up potential compared to other popular AI themes.

Morgan Stanley Dissects Nvidia's New Rack: Peripheral Components Gain Importance, MLCC Usage Surges 182%

Another major catalyst comes from Nvidia's next-generation Vera Rubin AI rack. After disassembling Nvidia's latest VR200 rack, Morgan Stanley found that the importance of peripheral components in the latest BOM is rapidly increasing.

The MLCC value per single rack has surged from approximately $1,530 in the previous GB300 generation to about $4,320—an increase of 182%. While the absolute value of MLCCs remains lower than that of GPUs, memory, and PCBs, their growth rate is exceptionally prominent among peripheral components.

Morgan Stanley's channel checks further indicate a significant increase in MLCC usage on both compute boards and switch boards, with the increase on compute boards being more pronounced. Additionally, the newly introduced BlueField and ConnectX modules will further boost the total MLCC count per rack. This partially explains the current robust demand for high-end AI server MLCCs and has prompted multiple ODM manufacturers to actively stockpile inventory in preparation for the mass production and delivery of Rubin racks in the second half of 2026.

Morgan Stanley's teardown of the Nvidia Vera Rubin rack reveals the following changes in key component values:

Market intelligence suggests that in the infrastructure arms race of the AI super cycle, the sequential rotation of supply bottlenecks has spawned wave after wave of market winners. Goldman Sachs' latest assessment describes MLCCs as the "new memory chip"—a passive component sub-sector standing at the starting point of a cycle characterized by simultaneous volume and price increases.

With demand from AI servers and Nvidia Rubin racks creating exponential impact, lead times for high-end MLCCs have exceeded 20 weeks, Japanese industry leaders have initiated price hikes, and official export data remains robust. All signals point to the same conclusion: this AI-driven MLCC super cycle has only just begun.

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