Multi-layer Ceramic Capacitors (MLCC), which are being called the 'rice of the IT industry,' are emerging as the prodigal son of the parts industry. MLCC is an electronic component that acts as a "dam" that supplies a constant amount of electricity to semiconductors. Many companies are paying attention because of the high potential for future market growth, such as for electronics and telecommunication applications.

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<0402 MLCCs on top of a finger Source = Samsung Electro-Mechanics>

In Korea, Samsung Electro-Mechanics, Samwha Capacitor, Amotech, and Avatec are growing MLCC businesses.

Domestic companies are mainly focusing on high-value products. In the mid- to low-priced MLCC field, Chinese companies are rapidly expanding their market share by using competitive prices as their weapons.

Samsung Electro-Mechanics ranks second in the world after Japan's Murata in the MLCC market. At a shareholders' meeting in March last year, they declared that it would take over the world's No. 1 spot in the MLCC field for information technology (IT) within five years.

Some predicted that Samsung Electro-Mechanics' MLCC business will benefit from the recent suspension of some production lines at its rival Murata's major plant in Fukui Prefecture in the aftermath of COVID-19.

Samsung Electro-Mechanics established a task force (TF) composed of experts in each field, including materials, processes, and facilities, to secure MLCC super-gap technology. They are focusing their efforts to create the world's smallest yet highest capacity, and highest voltage products.

Samwha Capacitor is the only general manufacturer of condensers in Korea. It produces all kinds of electric power condensers, ceramic condensers, and MLCCs, except electrolytic condenser. They offer a variety of MLCC lineups ranging from low/mid-tier to premium. Their MLCC business accounted for 60% of total sales as of last year. This proportion is steadily increasing every year.

Samwha Capacitor recently attracted attention for supplying MLCCs to Tesla. This product will be installed in Tesla's electric vehicle drive inverter. As the electric vehicle market grows rapidly and automobiles become electrical equipment, demand for MLCC is expected to increase significantly in the future.

Amotech is also investing their efforts into the MLCC business as a new business. Amotech is aiming for a niche market by focusing on MLCCs for telecommunication. Amotech has spent a considerable amount of time securing expert knowledge in the manufacturing process and technology by developing a multi-layer chip varistor similar to an MLCC. MLCC materials were also produced in-house to increase manufacturing stability.

The company expects 20-30% of its annual sales in the MLCC business, and Amotech expects 20-30% of its annual sales in the MLCC business in the future.

Avatech, a company specializing in display etching and coating, is also growing MLCC as a new business. Recently, it has made progress in securing large global customers. Avatech is implementing a unique MLCC strategy that targets niche markets such as solar panels.

The high-value MLCC field is highly profitable due to its high entry barriers. It is not difficult for parts makers to make double-digit operating profit margins if they invest in R&D for a long time to develop the technology to secure large customers.

An official from the parts industry said, "In the MLCC field, many companies are paying attention due to its endless market growth potential and high profitability," adding, "There is a possibility that more companies will jump in in the future."

By Staff Reporter Sora Park (