AI server capacitor shortage set to peak in early 2027, boosting demand for Samsung Electro-Mechanics

A growing shortage of high-performance capacitors used in artificial intelligence (AI) servers is expected to intensify in early 2027, as rising demand for processors and memory drives new supply contracts for Samsung Electro-Mechanics and a major capacity expansion by Japan's Murata Manufacturing, as reported by The Korea Herald.

A growing shortage of high-performance capacitors used in artificial intelligence (AI) servers is expected to intensify in early 2027, as rising demand for processors and memory drives new supply contracts for Samsung Electro-Mechanics and a major capacity expansion by Japan's Murata Manufacturing, The Korea Herald reported. Shortages of high-end multilayer ceramic capacitors (MLCCs) are expected to peak in the first two quarters of 2027, as demand for AI infrastructure expands beyond graphics processors to server CPUs, DDR5 memory and networking equipment, the report said, citing TrendForce.

MLCCs are small electronic components that help stabilise the power supply to processors and other circuits. Advanced AI servers require high-capacitance and highly reliable MLCCs to meet their growing power requirements. As the shift towards AI inference and autonomous AI agents boosts demand for server CPUs and accompanying memory, TrendForce expects global server CPU shipments to grow by more than 40 per cent next year, according to the report.

It further noted, "Demand is also rising from AI accelerators. Nvidia's Vera Rubin platform is expected to ramp up shipments from the fourth quarter, while AMD has begun procuring specialized high-capacitance MLCCs for its MI450 platform, according to TrendForce." Meanwhile, Samsung Electro-Mechanics, an affiliate of Samsung Electronics, has been securing major supply contracts amid tightening availability of these components.

The company secured an 879.3 billion won (USD 656 million) contract to supply AI server MLCCs to an unidentified global customer for one year, starting December 21, The Korea Herald reported. With this agreement, the total value of Samsung Electro-Mechanics' eight disclosed long-term supply contracts this year reached approximately 5.18 trillion won, including contracts for other electronic components.

On the financial front, Samsung Electro-Mechanics reported record revenue of 3.76 trillion won in the third quarter, marking a 30 per cent year-on-year increase, while operating profit surged 165 per cent to 691 billion won, according to its October 28 earnings announcement. Its component solutions division, which manufactures MLCCs, recorded revenue of 1.88 trillion won during the quarter, registering a 36 per cent increase compared with the corresponding period last year.

"Samsung Electro-Mechanics' AI-related MLCC revenue could rise from 374.9 billion won in 2025 to 2.98 trillion won in 2027 and 5.61 trillion won in 2028," The Korea Herald reported, citing the Meritz Securities Research Center. (ANI)