MLCC without profit, who earns all the money?

"10 out of 10 lose 9 out of MLCC." During the shortage of "chips" in the past two years, the chips of various brands rose in turn, and the increase ranged from several times to more than ten times. Grab this wave of market, and one year's income will exceed the past ten years, leading directly to wealth and freedom. But this group of people does not include those who specialize in MLCC. In their words, " was bad last year, and this year is even worse. In the past three months, it has been impossible to say ."

MLCC is called "electronics industry rice", and is one of the most used passive electronic components in the world. Almost all consumer electronics use MLCC components. From 2017 to the first half of 2018, it was a big year for MLCC. MLCCs with an increase of more than ten times or even dozens of times, Yageo, which has expanded out of the circle, and a group of people who got rich because of MLCCs, this situation is just like the active ones that have skyrocketed in the past two years. IC, due to the slump of MLCC in the second half of 2018, gradually disappeared in the discussion of the market.

MLCC has recently entered the public eye again. It is about the discussion about its " inventory bottoming out, thanks to a lot of sales, and ". This article will try to answer you from the following aspects:

1. What is the real market situation of MLCC?

2. Instead of rising, it fell. What do you think about the price of MLCC going upside down? ?

3. Who made the money for MLCC?

01

MLCC市场

一半是冰川，一半是火焰

进入2022年，芯片行业的“冰火两重天”现象愈发严重：一边是以手机、PC等为代表的消费电子市场需求疲软、砍单频发， The prices of high inventories such as driver ICs, CIS, memory chips, and PA chips have fallen; on the one hand, the demand for automobiles and industrial control, represented by the new energy vehicle , is strong, and the prices of related chips are still firm. The performance of

is the same in the MLCC market: the price of consumer-grade MLCC is almost upside down across the board, and there is an obvious shortage of in large-size and high-capacity automotive grades, and the delivery date of -related MLCCs has reached 40 months .

MLCC is called "electronics industry rice", which mainly plays the role of bypass, decoupling, filtering and energy storage.

A 5G mobile phone uses more than 1,000 MLCCs, and a pure electric vehicle uses 18,000 MLCCs. Under normal circumstances, a single ordinary MLCC only costs a few cents, and the expensive one is only a few cents a piece. Cheap, large bowls, and inconspicuousness are the background of MLCCs, so that some traders who made MLCCs in the early years always laughed at themselves. : " took the money from selling cabbage, and wanted to sell X fans ".

Starting from the second half of 2017, after the first echelon MLCC manufacturers Murata and TDK withdrew from the low-end capacitor market, smart phones, automobiles, mining, 5G, wireless charging, etc. were strongly stimulated, and the MLCC market was in short supply, and the market was quickly detonated. There is a scene of "buy when it is in stock, regardless of the price ". MLCC, which was originally a few centimeters, rose to a few cents, a few cents to a few yuan, and the increase ranged from several times to dozens of times. MLCC, a small thing, quickly became well-known in the industry from obscurity.

After 2018, in MAfter the story of LCC’s sudden wealth, some people left the market sadly, and some people began to enter the market. It’s just that after 2018, although the MLCC market has experienced several fluctuations, it has not reproduced the previous round of price increases.

On the whole, the MLCC market has experienced the following changes in the past few years:

• April 2016-May 2017: The industry entered the destocking cycle.
• June 2017-September 2018: In June 2017, the market began to hoard goods. From September to before the Spring Festival, the price of goods from downstream OEMs rose slightly. The price increase reached a climax in September 2018, and capacitors and rose as high as Nearly ten times, some models even reach dozens of times.
• From October 2019 to February 2020, the price of capacitors will gradually fall.
• In March 2020, due to the impact of the epidemic and the closure of Huaqiangbei and other factors, after the beginning of the spring, various terminal factories panicked to stock up, and suddenly pushed up the price of capacitors sharply.
• May 2020-August 2020: Affected by multiple factors such as the epidemic, foreign trade, and domestic demand, market demand has slowed down, and capacitor prices have gradually dropped. Strong market demand has driven the demand for MLCC. On the other hand, due to the higher-than-expected demand for 5G terminals and the continued high growth of new energy vehicles, the gap in high MLCC demand has further expanded.
• June 2021-present: The market represented by mobile phones and PCs generally believes that the market is weakening. In the second half of last year, the market began to sell goods.

can understand this change more intuitively based on the price change of a general-purpose 104-capacity 0402-sized MLCC. This MLCC is normally 2 yuan/k pcs, and in 2018 the highest price is 30 yuan/k pcs. In 2019, the price is basically Between 4-5 yuan/k pcs, except for slight increases in 2020 and early 2021, the overall price trend has been declining, and the current price is close to the level before the price increase.

From the chip spot market, the price and demand of MLCCs such as automotive, industrial control, and medical products are still firm. Some MLCC conventional materials have returned to the normal price or have returned to the normal price. Historically low prices in recent years. Some industry media also pointed out that the current price of MLCC conventional materials is upside down across the board. Yageo’s products have been upside down by 25%, 20% upside down for Samsung’s , 10-15% upside down for Fenghua Hi-Tech and Sanhuan’s .

This fact is further confirmed in TrendForce’s report:

From the first quarter of 2021 to the first quarter of 2022, the annual price of consumer-grade MLCCs has dropped by an average of 5-10% throughout the year, and some low-end consumers Standard MLCC prices have even touched material costs. The price of industrial-standard niche MLCCs is expected to rise as the shortage of client-end chips eases and the drop-in goods will rise, with a drop of 1-2%, or even the same level, while the price of automotive-standard MLCCs, which belong to the annual quotation, will maintain a stable price.

In the past two years, the market of active ICs has skyrocketed and stories of getting rich have been widely circulated in the chip distribution circle, but we found that the few MLCC distributors we know basically have not changed their careers and continue to sell MLCCs. Because in their view, in the distribution circle of , each component has its own way, sources of supply, channels, and customers, all of which need to be accumulated.

02

did not rise but fell

Why did the price of MLCC hang upside down?

"It's not scary to have little demand, and it's the bottom line when there is no demand for the terminal." A trader specializing in MLCC in the

told Xin Shixiang, "The first batch of goods was drawn at the end of 19, and another wave of goods was drawn in the second half of 20 , There are a lot of orders. The business in 21 years is not so good. It is half of 20 years. It will be halved this year. In recent months, all the factories that have done business have said that they have no business, and the price has been falling since last year. reached an all-time low."

Amazon store closures began in May last year. Stimulated by the weak demand in the consumer electronics market, many traders began to sell goods at low prices to recoup their costs. "The lower the price, the more terminals wait and see and dare not stock up." In the atmosphere of MLCC, MLCC has entered a vicious cycle of " demand reduction-panic-selling goods and cashing out ". By October last year, some general-purpose MLCCs had begun to experience price inversion.

So, how to understand the price inversion of MLCC?

First of all, we need to understand what is the meaning of "price inversion". The price inversion here mainly refers to the market situation of low-end and mid-end MLCC, and the purchase price of agents is higher than the market price.

The transmission chain of the electronic components industry is generally in accordance with the original chip factory-agent-distributor (trader/spot dealer) -end customer, for some large customers, the original factory will also supply directly, the agent Both merchants and distributors can eventually flow to end customers.

In a normal market environment, the advantages of agents are the supply of goods, relatively stable prices, reliable quality, and technical support, but the price advantage is not obvious compared with market prices. option for insensitive terminals. Most of some small and medium-sized terminals will choose to buy from dealers.

An MLCC agent mainly engaged in the consumer electronics market said, "From January to April last year, our business was still growing compared with 2020, and it was obviously not going to work after May. Affecting factors such as exports, some people began to sell goods at low prices in the market, and by the fourth quarter, the price of MLCC had been inverted."

"Price upside down" is not common, it is a disaster for component agents, how can customers place an order if the price is not advantageous? More importantly, it will affect the customer's decision to stock up. The lower the price of , the more customers will buy as much as they need.

The most important reason for the inversion of low-end MLCC prices is the weakness of consumer electronics, which account for more than 60% of the MLCC market share (64%, mobile phones account for 34%). If you sum up the market last year as "sluggish growth", this year is in dire straits. Since the beginning of this year, computers and mobile phones have continued to weaken, and news of order cuts has been released one after another. If you look carefully, the range of order cuts and price cuts is basically based on 20%. .

According to the latest data from Counterpoint Research, a research organization, China’s smartphone sales in the second quarter of 2022 fell by 14.2% year-on-year, hitting a new low, and sales were less than half of the historical sales peak in the fourth quarter of 2016. The above

are mainly reflected in the demand side .

MLCC added production capacity overview

and on the supply side of , is the passive element of The frenzied expansion of manufacturers. Since the MLCC market in 2018, Murata, Taiyo Yuden, TDK, Samsung Electro-Mechanics , Fenghua Hi-Tech and other major MLCC manufacturers have started to expand production in recent years.

While demand is sluggish, production is being expanded crazily. Under the catalysis of weak consumer electronics orders and market dumping, the price of MLCC is also inevitable. In addition to , as far as conventional capacitors are concerned, they are still a kind of standard industrial products. After excluding factors such as yield rate, the difference in quality between products of different brands is very small. In some consumer electronics applications, use A There is really not much difference between the brand and the B brand.

Consumer-grade MLCCs are generally in a downturn, and the right to choose returns to the buyer. Buyers naturally choose to "shop around" and choose the best. This has also led to the hardest hit area for conventional MLCC prices.

03

The chip distributor 03

z who made the money?

Source: Founder Securities

The global passive component industry is divided into three echelons: the first echelon is mainly represented by Japanese manufacturers Murata, Taiyo Yuden, and TDK. Samsung Electromechanical, Yageo, and Huaxin Technology are in the second echelon, and the third echelon is domestic manufacturers represented by Fenghua Hi-Tech and Sanhuan Electronics, accounting for the "Others" in the above classification. MLCC is the main one.

An electronic component manufacturer in South China said in an interview that his company’s order volume began to drop sharply in May, and from June onwards it was only 50% of last year’s, and the operating rate was only 20-30% of last year’s. Traders specializing in MLCC in the market also said that the current one-month order is only 1/6 or even less than the normal market.

But if you look carefully at the financial reports of major MLCC manufacturers last year, you will clearly see that the sorrows and joys of the original manufacturers are not the same as those of agents and distributors: In 2021, Murata, Taiyu, Yageo, Fenghua Hi-Tech, etc. All have hit new highs or record highs in recent years.

村田：2021财年（截至2022年3月）合并财报显示，净利润同比增长33%，增至3141亿日元，连续两年创新高；

太诱：2021 年度(至2022 March 2019) Net profit for the year increased by 90% to 54.3 billion yen ; revenue, operating profit, recurring interest and net profit performance all hit new highs;

TDK: revenue 1.9 trillion yen, year-on-year increased by 28.6%, net profit was 166.8 billion yen, an increase of 49.2% year-on-year;

Samsung: 2021 annual sales will reach 9,675 billion won, operating profit will reach 1,486.9 billion won, an increase of 25% year-on-year sales, operating profit An increase of 63%;

Yageo: The consolidated revenue for the full year of 2021 will be NT$106.539 billion, an increase of 57.4% over last year. Full-year 2021 gross margin of 40.4%, up 2.8% from last year;

Fenghua High-Tech: In 2021, the operating income will be 5.055 billion yuan, breaking through the 5 billion yuan mark for the first time, an increase of 16.69% year-on-year; the net profit will be 951 million yuan, a year-on-year increase of 155.28%; Revenue reached 42.087 billion yuan, an increase of 18.41% over the previous year, and still hit the second highest record in history;

Three rings: the company will achieve operating income of 6.218 billion yuan in 2021, a year-on-year increase of 55.69%; net profit attributable to the parent company is 2.011 billion yuan, a year-on-year increase 39.68%;

If the time dimension is extended to the first quarter of this year, the revenue and growth rate of the first echelon MLCC manufacturers such as Murata, Taiyu, and TDK are still strong. Growth began to slow down in the second half of last year, which also corresponds to the aforementioned "two heavens of ice and fire".

At present, in the context of consumer electronics downturn and cut bills have been agreed, both research institutes and people in the industry know that new energy vehicles, photovoltaic , medical care, etc. are still strong and are the future direction, but This channel has already been occupied by the original factory and some agents, and the funnel of demand cannot fall into the mouth of distributors after all. In the past, the electronics factories targeted by distributors are currently shutting down and reducing production to combat the sluggish demand.

Therefore, in the MLCC market, the difficulty of " doing more and losing more, and there is no way to fall" belongs to component distributors (traders) and agents who mainly focus on the consumer electronics market . As for the original manufacturers of MLCC, their life is not bad, and they are quietly expanding production while generating revenue.

04

结语

在梳理各家MLCC大厂近几年的营收情况时，最令人惊讶的还是国巨。

Since the high point of performance in 2018, Yageo has not been affected by the industry's prosperity in recent years, and its revenue, gross profit rate, and net profit rate have all grown steadily.

If you carefully read Yageo's financial report and Yageo Chairman Chen Taiming 's several foreign speeches, you may be able to find some answers.

• Boss Chen said that before 2017, 70% of Yageo’s revenue was in the standard product market, and 30% was in automotive, industrial, medical and other special products and the European, American and Japanese markets; Later, 75% of Yageo Group's products belonged to high-standard special products , 25% were conventional products , and MLCC accounted for 30% of revenue; Boss Chen continued to say that the main reason is that the demand for the company's niche products maintains a steady momentum. In the proportion of Yageo's revenue, 80% of the belongs to the (vehicle, etc.) niche products .

Yageo’s niche products, which have risen from 30% to 80%, are the high-end markets such as automotive and industrial specifications, while the depressed conventional consumer-grade MLCCs only account for 20% of its revenue. When everyone's impression of Yageo is still on "roasted seeds and nuts" and repairing customer relationships, Yageo has already started the layout of mergers and acquisitions, and secretly raised its hard power. Yageo is no longerIt is Yageo in 2017.

Boss Chen seized this wave of opportunities again.