According to the latest survey by TrendForce, the BB Ratio (Book-to-Bill Ratio; order-to-bill ratio) of MLCC suppliers rose slightly to 0.79 in February 2023. As the consumer electronics, data center, and Netcom 5G infrastructure markets return to the traditional off-season cycle, order demand slows down. On the other hand, car orders benefit from Tesla’s (Tesla) price cuts and promotions, and there is an opportunity to increase, making various car manufacturers join the price war to consolidate market share. In the first quarter of 2023, automotive MLCC orders are relatively stable. It is expected that MLCC suppliers will actively invest in research and development and expand the production capacity of automotive products throughout the year.

According to TrendForce, since the demand for consumer electronics products turned weak in the third quarter of 2022, the demand for automotive orders has continued to be stable. MLCC suppliers have begun to concentrate resources on research and development of automotive-grade products, and accelerate the pace of process technology improvement and production expansion. Murata continues to move towards the goal of increasing production capacity by 10% per year. From the second quarter of 2023, it is expected that the monthly production capacity of automotive-grade MLCCs will reach 25 billion units, making it a market leader. TDK also announced in May 2022 that it will expand its automotive production capacity at the existing Kitakami plant in Iwate Prefecture, Japan. It is expected to start mass production in September 2024, and the monthly production capacity will increase by 5 to 8 billion units. As for Samsung, Taiyou and Yageo, their automotive production capacity will increase significantly in 2023, and their average monthly production capacity will increase by 2 billion to 3 billion units.

Although Huaxinke’s production capacity for vehicle specifications started late, with an average monthly production capacity of 1.5-2 billion units, it continues to expand its production lines through the Kaohsiung plant. This year’s monthly production capacity may increase to 2.5-3 billion units. It is worth mentioning that, in recent years, Fenghua, Weirong, etc. have also recruited international professional and technical personnel to improve R&D and process capabilities. From the second half of 2022, they have successively launched low-capacity car-standard products and increased production capacity. The average monthly production capacity is about 300-400 million pieces.

Automakers cut prices to seize the market, and low-capacity MLCCs are the first to face price wars

Looking forward to 2023, despite the slowdown in inflation in Europe and the United States, the global economy remains weak. Depots cut prices to stimulate car purchases, but this also brings the overall auto market into a cycle of price competition, so cost advantage will be the key. According to TrendForce, the trend of bidding will intensify the pressure of price cuts in the upstream and downstream of the supply chain. The high gross profit of automotive MLCCs for a long time may gradually decline, and the long-term high market share held by Japanese factories will be divided after other players join in, it is estimated that Murata, TDK, and Taiyu will account for 41%, 16%, and 13% of their car-sized MLCC production capacity in 2023, respectively.

TrendForce specifically stated that the sales volume of electric vehicles in China has benefited from the continuous increase in policy dividends. Starting from 2022, carmakers such as Xiaomi, Huawei, and BYD have successively introduced microcapacity and Fenghua low-capacity MLCCs, and the bidding for orders has begun. Therefore, in 2023, Japanese manufacturers will successively withdraw from the low-price competition cycle of low-end car specifications, and Chinese and South Korean manufacturers will compete with each other to compete for orders. Standard product price war will continue.

Source: EET