MLCC Market Overview
Multi-layer ceramic capacitors (MLCC) are the workhorse capacitors of the electronics industry. Global demand is driven by innovation from IoT growth, smart TVs, and the automotive industry, coupled with organic demand from consumer electronics (e.g. smartphones) and rising GDP per capita. To meet the market needs, MLCC manufacturers are weighing strategies to adapt to this exponential growth: either expand their business to improve the right-to-win equation at the commodity level, or continue to innovate, maximizing expertise and product solutions for the niche best suited to their strengths.
At Knowles Precision Devices, we work on capacitors at the specialized end of the market. These high-performance capacitors support a wide spectrum of applications. Our high-temperature line operates at temperatures between -55°C to 250°C. There are also very high-reliability devices, appropriate for medical applications, and for space crafts that are orbiting the international space station and exploring Mars. Other specialized capacitors in our portfolio can handle the high voltage/energy-dense needs of electric vehicles, with operating environments between 125°C and 200°C. The breadth of these market applications has pushed the specialty features of our capacitors to become the standard. This rapid technological advancement demands that these trends be tied to our product development cycle. With that in mind, here is a closer look at the trends in the MLCC market and manufacturing process.
Trends in MLCC Markets
It is nearly impossible to avoid using a smartphone throughout the day. They are now our cameras, banks, methods of payment, GPS, and sources of news, among many other things. As these devices continue to add functionality, demand continues its steady increase, and is expected to reach nearly 3B global users by 2020.
With ever-increasing functionality per device, ICs, sensors, and larger batteries, there is a requisite increase in the number of MLCCs per smartphone. Manufacturers are challenged by the additional constraint of maintaining (or even decreasing) package volume for the technology, increasing pressure to increase the capacitance density; that is, achieving the same (or more) capacitance in a smaller packaging envelope. This objective has led to an uptick in small, high-capacitance MLCC demand.
Traditional automobiles are experiencing increased amounts of electronic systems. Autonomous functionality, advanced driver-assist (ADAS), and passenger comfort features have increased the number of semiconductors in the vehicles, requiring more MLCCs to support the electronics. As a result, there is a higher need for automotive-certified (AEC-Q200) MLCCs, driving market demand.
Electric vehicles, an industry with a very steep development curve, present their own opportunities on capacitor demand. Higher sales in EVs, projected to eclipse 11M in 2025, will require an increase in power electronic systems, more complex control electronics to communicate with high-voltage electric powertrains, and higher-voltage AEC-Q200-certified MLCCs to meet the demands of rapid charging.
Trends MLCC Manufacturing
The exploding demand has created an expected lag in supply, leading to a global shortage of MLCCs. As described, the demand for higher capacity-efficient MLCCs has led manufacturers to make choices around their product development; the manufacturers have frequently targeted capacitor case size, for example. Paumanok Research published a study showing the fraction of each case size comprising global MLCC consumption, illustrating the trend toward smaller case sizes. While the decreased production of large-case capacitors may impact customers that still employ them, Knowles continues to support these legacy products while adapting to the movement to higher capacity-dense product.
Another MLCC manufacturing trend is that manufacturers are consolidating production volumes around advantaged vertical markets to adapt their businesses to the increased market trajectory. This shift is further straining supply given the existing shortage, and there is the potential for reluctance in the market to take on new, custom, or hard-to-meet specifications for critical applications. To mitigate this hesitancy, end-users need a supply partner that is open to collaborating on specialty MLCCs for niche applications.
The MLCC market is booming due to IoT, consumer electronics, and electric vehicles industries that drive the demand and capacitance density sharply upward. Knowles Precision Devices continues to maximize its strengths, developing and manufacturing innovative, high-performing, specialty components to meet the dynamic MLCC market conditions. We are passionate about meeting the specialized needs of our customers to help drive our industry forward.