Samsung Electro-Mechanics’ multilayer ceramic capacitor (MLCC) plant in the Philippines has dropped to 40 percent operation rate, according to The Elec. This is due to a drop in market demand for MLCCs, which has also affected Murata Manufacturing and Taiyo Electric. Samsung Electro-Mechanics and its suppliers had sent employees to the Philippines to put more money into the plant. Most of them have returned.
Some of the work the supplier had planned to do on the plant in early December has also been postponed until next year, the source said.
MLCCs are core components of electronic devices that control the steady flow of current in electronic circuits and are critical for products such as smartphones, home appliances and automobiles, but in environments with higher than guaranteed temperatures, MLCCs tend to operate properly by lowering their capacitance.
Samsung Electro-Mechanics produces MLCCs in Busan, South Korea, as well as in Tianjin, China, and the Philippines. but the component maker has recently reduced production of general-purpose MLCCs because of the recent global economic downturn, which has had the greatest impact on the IT market, with falling demand.
Demand in Tianjin, for example, remains solid because the plants there produce MLCCs primarily for automotive and industrial use rather than IT.
In 2020 and 2021, Samsung Electro-Mechanics enjoys an operating rate of about 80 to 90 percent for its parts plants, including MLCCs. But in the first quarter of the year, this has dropped to 70 percent and then increased to 74 percent throughout the first half. But by the third quarter, the cumulative operating rate had fallen to 65%; excluding the first half, the operating rate was 48%.
Murata’s remaining orders for the July-September period came in at 1945 billion yen (about 10.153 billion yuan), down from 220 billion yen (about 11.484 billion yuan) last year. The company said the slowdown in demand from the personal computer market was a significant impact. TAIYO YUDEN also said its remaining orders fell for the fifth consecutive time this quarter.
