In the past month, the spot market price of MLCC has been extremely unstable. According to supply chain insider, the reasons for the recent price fluctuation of MLCC, in addition to the rising demand in the peak season, there are six other factors:

  1. Authorized distributors are conservative in inventory

Since the price of MLCC has fallen, authorized distributors have been losing money for three consecutive quarters. In this case, authorized distributors choose to reduce their inventories. Under normal circumstances, the authorized distributor’s inventory levels is about 3 months, and the current inventory is only about 1.5 months.

  1. Reduced inventory of manufacturers

Many manufacturers’ stocks in 2018 were not digested until the first quarter of 2019. During this period, the price of MLCC continued to fall, causing producers to reduce their inventories.

  1. MLCC producers have reduced capacity due to lack of staff

Since the third quarter of last year, MLCC producers such as Murata, Taiyo Yuden, Samsung, Yageo, and Walsin have stopped recruiting new production line employees, resulting in a significant drop in the number of production line employees.

  1. China’s implementation of ETC has led to a sharp rise in demand

In the past six months, the Chinese government has vigorously promoted the ETC (Electronic Toll Collection), which has led to a surge in demand for low-capacitance MLCCs. According to estimates, by the end of this year, the new MLCC demand will be about 10 billion pieces, and these surged demand will certainly take up part of the capacity.

  1. Some hoarder intends to push up the price

Recently, there are some well-capitalized companies in the market that buy large quantities of stocks and intentionally push prices up. This is a force that cannot be ignored in price increases.

The supply chain insider said that the above five factors have led to the recent MLCC market price fluctuations, and believe that after entering the fourth quarter, MLCC prices will be stable. In fact, overall, there is no problem with the supply of the entire MLCC market. SemiMedia believes that the biggest push for price increases is the fifth factor mentioned above. If so, the price increase should be eased soon.

The supply chain insider said that the above five factors have led to the recent MLCC market price fluctuations, and believe that the biggest push is the fifth factor. At last, he also estimated that price increases will soon be eased.