Last week, Fenghua Advanced Technology, a passive component manufacturer in mainland China, issued an announcement saying that in order to continue to increase MLCC production capacity, optimize product structure, and enhance market competitiveness, it plans to invest 7.5 billion yuan (US $ 1.07 billion) for the construction of Xianghe Industrial Park's high-end MLCC base. This project will be implemented in three phases. The construction period will be 28 months, with an additional monthly output of 45 billion high-end MLCCs.
According to Fenghua, the total investment of this project is 7.5 billion yuan, including a construction investment of 7.27 billion yuan (including infrastructure investment and investment in equipment for expansion), and a working capital of 230.30 million yuan. The investment in this project will be divided into three phases, 2.06 billion yuan in the first phase, 3.29 billion yuan in the second phase and 1.93 billion yuan in the third phase. The working capital is invested annually according to production needs.
The purpose of Fenghua's huge investment is to rapidly increase the capacity of MLCC capacitors. The construction of the project includes the reconstruction of an existing plant of 25,620㎡ within 28 months, the construction of a new plant of approximately 163,526㎡, and the construction and improvement of other public facilities. After the completion of the construction, it will add 45 billion high-end MLCCs to Fenghua's MLCC monthly production capacity.
Insiders of the passive component industry believe that in the long run, due to the continuous growth of MLCC applications in 5G, new energy vehicles and other fields, the size of the MLCC market will continue to expand. As some MLCC capacities of Japanese and South Korean manufacturers have been successively reduced, Fenghua increasing high-end MLCC production capacity at this time point will help it seize opportunities and quickly seize market share, further improving the company's profitability and competitiveness.