China's MLCC Supply Chain Is Racing to Scale as AI Server Demand Creates a Historic Capacitor Supercycle

Goldman Sachs revised its 2026 MLCC pricing forecast upward from flat to a predicted increase of 0–5%, signaling the start of a prolonged tight balance between supply and demand . The bank believes the cycle is still in its early-to-mid phase, co-driven by AI server demand and automotive electrification, both of which tilt toward higher-value MLCC grades .

Shandong Sinocera: The Bellwether of China's MLCC Material Expansion

Sinocera is China's leading supplier of dielectric powder to global MLCC manufacturers. In an August 2026 Shenzhen Stock Exchange filing, it confirmed it is actively expanding high-end capacity specifically for AI server and automotive-grade MLCC powders, with parts of the new lines already operational .

Its target: 5,000 tons of high-end MLCC powder capacity (on top of ~10,000 tons of standard-grade capacity). By end-2025, 2,000 tons were online; the remaining 3,000 tons are expected to come online through 2026–2027 .

H1 2026 financial results (reported August 5, 2026):

• Revenue: ¥2.513 billion (US$370M), up 16.64% year-over-year .
• Net profit attributable to shareholders: ¥363 million, up 9.36% year-over-year .
• Operating cash flow grew 36.78% year-over-year .
• Shares have surged ~159% year-to-date as of mid-August 2026 .

"Looking ahead, as new capacity gradually ramps up, output and sales of MLCC powders are expected to rise further," Sinocera stated in its exchange filing, signaling strong confidence that the current demand spike represents a sustained structural shift . The company also approved a cash dividend of ¥0.50 per 10 shares .

The Broader Upstream Rally: Nickel Powder Remains the Critical Bottleneck

Jiangsu Boqian New Materials (nickel powder for MLCC electrodes) gained nearly 6% in a single trading day on AI infrastructure demand . Nickel powder localization is considered the single most critical upstream supply-chain breakthrough for China's MLCC self-sufficiency, as internal electrode nickel powder is nearly 100% import-dependent from Japan .

Other notable Chinese names in the upstream rally include Guangdong Fenghua Advanced Technology (a domestic MLCC leader that has entered NVIDIA's AI server supply chain, with a monthly output target of 120 billion pieces by late 2026), Beijing Zhong Ke San Huan High-Tech, Fujian Torch Electron, and Beijing Yuanliu Hongyuan Electronic Technology .

Structural Market Shift: Japanese and Korean Giants Move Upmarket

Global leaders Murata and Samsung Electro-Mechanics are also aggressively expanding, but as they push into ultra-high-end products, Chinese suppliers are capturing the fast-growing mid-to-high volume tier, accelerating domestic substitution . In what Goldman Sachs described as "the largest and longest cycle in history," leading Japanese and South Korean manufacturers are being inundated with orders for high-end MLCCs, leaving room for Chinese competitors to expand in lower-end segments .

Industry analysts describe the current phase as "early-to-mid upcycle," co-driven by AI server demand and automotive electrification, both tilting toward higher-value MLCC grades . According to Murata, AI server demand for MLCCs will grow at a compound annual rate of 30% between 2025 and 2030, increasing 3.3-fold by 2030 compared to 2025 .

The geographic center of MLCC production is also shifting westward within China, though R&D leadership remains in Guangdong . With Chinese powder makers gaining a competitive edge and Japanese MLCC powder manufacturers facing supply disruptions of rare earths, the conditions for China's upstream MLCC supply chain have never been more favorable for rapid expansion and market share gains .