MLCC Market Enters Super-Boom... Atom Subsidiary Cheonghan Electronics Highlighted in Supply Chain

As the MLCC (Multi-Layer Ceramic Capacitor) market enters a period of super-boom, Cheonghan Electronics, a subsidiary of Atom, is gaining attention in the market. Cheonghan Electronics specializes in the distribution and technical support of MLCCs.

On June 19, Ko Eui-Young, a researcher at iM Securities, commented on the MLCC industry, stating, "Ahead of the peak season in the third quarter, price increases may expand to more products, and direct delivery price hikes could affect earnings estimates. In addition, some LTAs (long-term agreements) have already been signed," adding, "Going forward, it is inevitable that MLCC prices will increase. However, since MLCCs account for only a minor portion of the BoM cost (materials cost), the more important issue is managing supply risks, which are highly likely to occur in the future."

Researcher Ko presented three main factors driving the growing possibility of an MLCC supply shortage. The first is the extension of lead times (the period from product development to mass production) required to supply products. Ko explained, "Currently, MLCC supply lead times have been extended to around 20 weeks for most products. In the past, standard products had lead times of about 4 weeks and high-end products about 8 weeks, but recently even low-end product supply periods have expanded to 20 weeks."

The second factor is delays in securing process equipment necessary for MLCC production. Ko noted, "According to Taiwan's MLCC company Walsin, lead times for high-end equipment such as stackers have lengthened to as much as 1.6 years," and analyzed, "As a result, companies are placing advance orders to secure equipment in advance." He further added, "Equipment supply bottlenecks also played a major role in limiting MLCC supply during 2017–2018."

The third factor highlighted is that expansion of production for server-use MLCCs itself could become a supply constraint. Ko stated, "Server-use MLCCs have manufacturing lead times that are two to three times longer than standard MLCCs, so expanding production takes time. While Samsung Electro-Mechanics and Japan's Murata are showing a more aggressive expansion stance than usual, the actual increase in effective production capacity may be limited."

As a result, MLCC-related stocks are drawing attention in the market. Cheonghan Electronics, a core subsidiary in which Atom holds a 60% stake, continues to deliver stable results by focusing on MLCC distribution and technical support. Cheonghan Electronics’ sales reached 27.2 billion won in 2024, up from 31.2 billion won last year, and this year’s sales are expected to exceed 33 billion won.

Na Seungdoo, a researcher at SK Securities, analyzed, "Cheonghan Electronics, which handles MLCC distribution, is expected to benefit from increased investment in AI data centers. Recently, with surging demand for high-value-added MLCCs for AI servers, expectations for performance improvement among related supply chain companies are also rising."

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