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Financial Services Association, August 26 (Reporter Wang Biwei) After a two-year period of downturn, good news came from the MLCC industry.

Tonight, domestic MLCC leader Fenghua Hi-Tech (000636.SZ) released its semi-annual results. The company's Q2 net profit surged 402.02% year on year. Driven by continued price increases in the sales market this year, the month-on-month increase was also over 80%. According to financial reports from previous years, Fenghua Hi-Tech's net net profit and gross margin both reached their highest values in nine quarters in Q2 this year.

Looking ahead to the future market, TrendForce Jibang Consulting analyst Chen Weisheng told the Financial Federation that high-spec MLCCs will continue to rise sharply in volume and price, while demand for low-spec MLCCs is still growing slowly. Therefore, continuous improvement of product structure is still an important issue for relevant manufacturers.

According to Fenghua Hi-Tech's semi-annual report data, the company's total revenue for the first half of this year was 2.391 billion yuan, up 15.18% year on year; net profit was 0.207 billion yuan, up 143.62% from the same period last year; after deducting non-net profit of 0.22 billion yuan, an increase of 172.73% year on year.

Profitability has increased, and product structure improvements are an important reason. Previously, the high-capacity MLCC market was mainly occupied by Japanese and South Korean manufacturers. In the past two years, domestic manufacturers such as Fenghua Hi-Tech and Sanhuan Group (300408.SZ) have gradually joined the table. In the first half of the year, Fenghua Auto's sales in the electronics sector increased 68% year on year, the communications sector increased 35% year on year, and the industrial control sector increased 18% year on year. The company also stated in financial reports that sales in emerging markets such as computing power, energy storage, and drones continued to be introduced to new customers.

According to information, the MLCC market is still showing a “double heaven of ice and fire.” On the one hand, demand for high-capacity products continues to grow. Chen Weisheng said that the main application scenarios for high-capacity MLCCs include AI servers, automobile markets, charging piles, and photovoltaic energy storage. “Due to the increase in the demand for computing power of AI servers, their power consumption has increased relatively, leading to an increase in the operating temperature of the system. As a result, the unit usage of MLCC products with high capacity and high temperature resistance has increased. Simply put, AI server demand for MLCCs has not only doubled in quantity, but the specification requirements have also increased, while the average sales price (ASP) has also increased.”

On the other hand, it is still difficult for low-specification MLCCs used in consumer electronics, home appliances, etc. to usher in significant growth. Chen Weisheng said that with ICT market demand slowing global economic growth, terminal consumption momentum is difficult to sustain and concentrate, and order demand is growing slowly, leading to a slowdown in the pace of growth in consumer MLCC demand, which in turn affects the capacity utilization rate of suppliers.

Looking ahead to the future, demand differentiation in the MLCC market will continue. Chen Weisheng told reporters that demand for high-capacity MLCCs continues to be driven by downstream promotion such as AI, and MLCC revenue is expected to increase by about 10% quarterly in Q3. In terms of medium- and low-standard products, he said, “The growth of the consumer-grade MLCC market still depends on the direction of economic development.” Under these circumstances, continuous improvement of the business structure is still an important task for relevant manufacturers. If breakthroughs are not achieved in the high-end field, performance may continue to be under pressure.