As AI applications drive a surge in demand for tantalum capacitors, Kemet, a subsidiary of Yageo Group, a major passive component manufacturer, has issued a price increase notice for tantalum capacitors to its customers.
Price increase
This is reportedly Kemet's second price increase this year. Compared to the first, the scope of the price increase has expanded from distributors to direct sales customers, a wider range. The new prices will take effect on November 1st. Supply chain sources indicate the price increase could be as much as 30%.
Yageo (2327)'s first price increase of the year took effect on June 1st, with supply chain sources reporting a double-digit percentage increase at the time. Yageo issued a notice to customers stating that its polymer tantalum capacitor product line (KO-CAP) has seen significant demand growth in several key market segments over the past three years. Due to rising labor, material, and equipment costs, Yageo will implement price adjustments for larger products. A response from Yageo's spokesperson was not available at press time.
Yageo announced that it will increase the prices of its T520, T521, and T530 series tantalum capacitors effective November 1st. This marks its second price increase, following the June price increase for specific tantalum capacitors. The supply chain emphasized that the price increase this time is as high as 20% to 30%. Tantalum capacitors accounted for as much as 22% of Yageo's revenue structure in the first half of this year. The second price increase will have a significant improvement on revenue and profit performance.
Demand-driven
Tantalum capacitors were previously primarily used in laptops, industrial, and automotive applications for major US consumer customers. However, driven by surging demand for AI servers, AI has seen the strongest growth this year. This sharp increase in demand, coupled with the challenges of rapidly expanding production capacity, has led Yageo to raise prices on certain tantalum capacitor models for the second time this year.
Yageo, a leading passive component company in Taiwan, has continuously expanded its product line through mergers and acquisitions in recent years, becoming the world's largest manufacturer of chip resistors (R-chips), tantalum capacitors, and the third-largest manufacturer of multilayer ceramic capacitors and inductors. AI applications currently account for approximately 5-10% of its total revenue. In addition to being Taiwan's largest supplier of X6S MLCCs, its subsidiary, Kemet, is the global leader in tantalum capacitors, with a market share exceeding 40%.
Market reaction
Legal persons said that tantalum capacitors are suitable for use in harsh working environments due to their long life, high reliability, high stability, high temperature resistance and low noise. Yageo's price increase for polymer tantalum capacitors is large in size and high in voltage, and should be used in data centers, AI servers, and high-frequency power supplies, indicating strong demand for high-end applications.
Yageo previously pointed out that the company's average B/B value is greater than 1, especially in the field of AI applications, reaching 1.2 to 1.3, indicating strong momentum in AI demand. With a promising outlook, Yageo's recent stock price has been strong, rising by NT$18 to NT$226 yesterday (23rd), an increase of 8.65%.
Source: Content from Economic Daily
