Supply Emergency of 'Rice of Electronics Industry' MLCC Amid Spread of Asian Delta Variant

Essential Components for Smartphones and Electric Vehicles
Factory Shutdowns Continue... "Production Disruptions Occur"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Suhwan] As the Delta variant rapidly spreads across Asia, production of the so-called "rice of the electronics industry," the Multi Layer Ceramic Capacitor (MLCC), which is essential in most electronic devices, is reportedly facing disruptions.

On the 30th (local time), The Wall Street Journal (WSJ) reported, "With the recent spread of COVID-19 in Asia, there are concerns that factories producing MLCCs will not be able to produce sufficient quantities."

MLCCs act as a "dam" inside electronic devices by storing electricity and releasing it in controlled amounts, regulating the flow of current in circuits and helping to prevent electromagnetic interference between components.

Due to their essential role in the smooth operation of electronic devices and their size being comparable to a grain of rice, they have earned the nickname "rice of the electronics industry."

WSJ reported that Murata, Japan's largest MLCC manufacturer holding 40% of the global MLCC market share, decided to halt operations at its main factories for one week during the last week of August.

Additionally, another Japanese MLCC manufacturer, Taiyo Yuden, also announced the suspension of operations at some of its factories in Malaysia. According to the company, due to recent government quarantine measures in Malaysia, factory operating rates have remained at 80%.

According to analysts at TrendForce, as a result of these reduced factory operating rates, the shipping period for MLCCs produced by Taiyo Yuden has increased by 10 days, from the previous 45-55 days.

[Image source=Reuters Yonhap News]

In particular, considering that MLCCs are essential components in major electronic devices such as smartphones, electric vehicles, and video game consoles, there are concerns that the impact of the MLCC supply shortage could become even more severe.

MLCCs are mainly produced in East Asia and Southeast Asia, and with the recent spread of the Delta variant in these regions, disruptions in MLCC production are inevitable.

Especially with the technological advancements in smartphones demanding more power, the number of MLCCs used in individual devices has rapidly increased, which is expected to exacerbate the damage caused by the supply shortage.

According to WSJ, in the early days of smartphones, only a few hundred MLCCs were used per device, but the latest smartphone models reportedly contain over 1,000 MLCCs.

However, there is also analysis suggesting that the MLCC supply shortage will not cause damage comparable to the semiconductor shortage.

An analyst from Nomura stated that due to the ongoing semiconductor shortage, there is already a shortage of electronic devices, and "as most manufacturers have reduced production, demand for other components such as MLCCs has also decreased."

This content was produced with the assistance of AI translation services.