Automotive electrification and ADAS are the second major force. Electric vehicles use 5,000–10,000 or more MLCCs per car, compared to roughly 2,000 in a conventional internal combustion engine vehicle . Advanced driver-assistance systems and infotainment push that number even higher.

A massive supply gap and localization imperative also drive the buildout. China's MLCC market reached ¥55.9 billion in 2024, yet domestic manufacturers still hold only an estimated 10% of global revenue share . This leaves a huge import-substitution opportunity. The race to localize nickel powder — the core electrode material that is nearly 100% import-dependent from Japan — and dielectric powders is the most critical supply-chain breakthrough .

The cyclical upcycle adds urgency. The global MLCC industry hit 87–88% capacity utilization in Q1 2026, with leading manufacturers like Murata and Samsung Electro-Mechanics reporting rates exceeding 90%, signaling the early-to-mid phase of a supercycle where supply cannot keep up with demand .

Shandong Sinocera Functional Materials: A Case Study in the Trend

Shandong Sinocera (stock code 300285.SZ) is China's leading supplier of MLCC dielectric powder and illustrates the upstream expansion vividly.

Revenue surge: In H1 2026, the company reported operating revenue of ¥2.513 billion (US$370 million), up 16.64% year-over-year, with net profit attributable to shareholders of ¥363 million . This growth was driven by rising sales volumes of MLCC dielectric powder to AI server and automotive customers .

High-end production capacity online: In a Shenzhen Stock Exchange filing dated August 5, 2026, Sinocera announced that "expansion of certain high-end production lines for AI server and automotive-grade MLCC powders has been completed," with parts already operational . According to a detailed investor analysis, Sinocera already has 10,000 tons of standard MLCC powder capacity and is targeting an additional 5,000 tons of high-end capacity — 2,000 tons came online by end-2025, with the remaining 3,000 tons expected by end-2026 .

Proprietary technology advantage: Sinocera uses a proprietary "hydrothermal method" to synthesize nano-scale barium titanate powder, enabling tens of thousands of tons of annual MLCC dielectric powder capacity . This represents a significant breakthrough in electronic ceramics material science and enables domestic substitution of supply previously dominated by Japanese producers.

Forward guidance: The company told investors it is "actively pushing to expand capacity" further and expects continued demand growth, with AI server and automotive applications structurally transforming the demand mix toward higher-value, smaller-particle powders . China Galaxy Securities has noted that demand for high-capacitance MLCCs driven by AI applications has surged significantly .

Broader materials expansion: Sinocera also completed construction of a sulfide electrolyte mass-production line for solid-state batteries, demonstrating its broader ambition as a specialty materials player capturing multiple high-growth electronics and energy transitions simultaneously .

What This Means for the Global Supply Chain

The MLCC market is not in a standard cyclical rebound but rather a structural, supply-constrained upcycle fueled by AI infrastructure . The capacity expansion in China's upstream — from dielectric powders to nickel electrode materials to release films — represents a multi-year opportunity for domestic suppliers to gain share in a market historically dominated by Japanese and Korean players. If Sinocera and its peers successfully ramp high-end production, the real AI infrastructure bottleneck may turn out to be not just chips, but the "rice of electronics" that powers them.

Automotive electrification and ADAS are the second major force. Electric vehicles use 5,000–10,000 or more MLCCs per car, compared to roughly 2,000 in a conventional internal combustion engine vehicle . Advanced driver-assistance systems and infotainment push that number even higher.

A massive supply gap and localization imperative also drive the buildout. China's MLCC market reached ¥55.9 billion in 2024, yet domestic manufacturers still hold only an estimated 10% of global revenue share . This leaves a huge import-substitution opportunity. The race to localize nickel powder — the core electrode material that is nearly 100% import-dependent from Japan — and dielectric powders is the most critical supply-chain breakthrough .

The cyclical upcycle adds urgency. The global MLCC industry hit 87–88% capacity utilization in Q1 2026, with leading manufacturers like Murata and Samsung Electro-Mechanics reporting rates exceeding 90%, signaling the early-to-mid phase of a supercycle where supply cannot keep up with demand .

Shandong Sinocera Functional Materials: A Case Study in the Trend

Shandong Sinocera (stock code 300285.SZ) is China's leading supplier of MLCC dielectric powder and illustrates the upstream expansion vividly.

Revenue surge: In H1 2026, the company reported operating revenue of ¥2.513 billion (US$370 million), up 16.64% year-over-year, with net profit attributable to shareholders of ¥363 million . This growth was driven by rising sales volumes of MLCC dielectric powder to AI server and automotive customers .

High-end production capacity online: In a Shenzhen Stock Exchange filing dated August 5, 2026, Sinocera announced that "expansion of certain high-end production lines for AI server and automotive-grade MLCC powders has been completed," with parts already operational . According to a detailed investor analysis, Sinocera already has 10,000 tons of standard MLCC powder capacity and is targeting an additional 5,000 tons of high-end capacity — 2,000 tons came online by end-2025, with the remaining 3,000 tons expected by end-2026 .

Proprietary technology advantage: Sinocera uses a proprietary "hydrothermal method" to synthesize nano-scale barium titanate powder, enabling tens of thousands of tons of annual MLCC dielectric powder capacity . This represents a significant breakthrough in electronic ceramics material science and enables domestic substitution of supply previously dominated by Japanese producers.

Forward guidance: The company told investors it is "actively pushing to expand capacity" further and expects continued demand growth, with AI server and automotive applications structurally transforming the demand mix toward higher-value, smaller-particle powders . China Galaxy Securities has noted that demand for high-capacitance MLCCs driven by AI applications has surged significantly .

Broader materials expansion: Sinocera also completed construction of a sulfide electrolyte mass-production line for solid-state batteries, demonstrating its broader ambition as a specialty materials player capturing multiple high-growth electronics and energy transitions simultaneously .

What This Means for the Global Supply Chain

The MLCC market is not in a standard cyclical rebound but rather a structural, supply-constrained upcycle fueled by AI infrastructure . The capacity expansion in China's upstream — from dielectric powders to nickel electrode materials to release films — represents a multi-year opportunity for domestic suppliers to gain share in a market historically dominated by Japanese and Korean players. If Sinocera and its peers successfully ramp high-end production, the real AI infrastructure bottleneck may turn out to be not just chips, but the "rice of electronics" that powers them.