Super Boom of Multilayer Ceramic Capacitor (MLCC) is Continuing

Super boom of MLCC makes major companies feel happy. Earnings and share prices continue their rising streak. The prospects for future demand are also bright due to price increases continued from last year. The industry expects the MLCC boom will continue at least until 2020.
According to the recent analysis of the securities industry, the operating profit consensus of Samsung Electro-Mechanics is expected be KRW746.3 billion this year, considerably surpassing KRW464 billion of year 2013 which was the biggest of all time. Samsung has already recorded the earnings surprise with its first-quarter sales of KRW2,018.8 billion and operating profit of KRW154 billion, increased by 28.5% and 503.0% respectively, compared with the same period of the previous year. Samsung Electro- Mechanics is No. 2 in the global MLCC market following Murata of Japan.
Samhwa Capacitor Co., Ltd. is also expected to experience its earnings surprise in the first quarter. Last quarter, sales were KRW52.2 billion and operating profit was KRW11.7 billion, increased by 18% and 171.3% respectively, compared with the previous year, thereby being expected to record an all-time high.
Daejoo Electronic Materials, which exclusively supplies the electrode paste for MLCC to Samsung Electro-Mechanics, is expected to recover sales of KRW100 billion this year. Daejoo Electronic Materials exclusively supplies copper paste, a core material used for forming the external electrode of MLCC, to Samsung Electro-Mechanics. This year, they expect sales of KRW30 billion in the MLCC conductive materials business only by adding sales of additives.
Cosmo AM&T Co., Ltd., which produces release films for MLCC, is forecast to renew its record-high earnings this year. As the demand of release film used in MLCC production increases in proportionto MLCC, its market outlook is bright. Cosmo AM&T Co., Ltd. recently expanded the production line for release film, thereby expanding its production capacity from 25 million m2 to 40 million m2 per month. The securities market expects sales of release films of about KRW 100 billion won this year, nearly 50% higher than last year.

MLCC, called “the rice of the electronics industry,” is an essential general-purpose product that allows electronic products to operate normally by storing electricity and then transmitting as much current as necessary. The number of MLCCs in a single smartphone is as many as 800 to 1000. As the era of electric cars and autonomous vehicles opens, the number of MLCCs required in a car is expected to reach 12,000 to 15,000. The unit price of MLCC for electric field is four times as high as that for IT. The upward movement in price continues as demand is rapidly increasing while supply is limited.
Dong-won Kim, a KE Securities researcher, explains, “The recent MLCC industry is very similar to the DRAM market, where oligopoly supply systems and new demand are expanded into the electronics field, resulting in the continuous price rise. The global MLCC market is expected to grow rapidly from KRW8 trillion this year to KRW14 trillion, grown by 75%, in three years.

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