With surging demand for AI, Japanese materials and component companies remain cautious about capacity expansion, creating opportunities for Chinese suppliers to enter the high-end market. Sinocera Materials recently stated in its earnings conference that its key raw materials used in high-end multilayer ceramic capacitors (MLCCs) have been certified by some customers. MLCC ceramic dielectric powder has long been dominated by Japanese companies, with Chinese suppliers previously mainly concentrated in the low-end market. This progress signifies a significant step forward for domestically produced materials in the high-end supply chain.
Japanese companies' conservative capacity expansion due to concerns about the sustainability of demand may lead to some market share flowing to Chinese companies. Once Chinese suppliers obtain customer certification, even if the industry enters a downturn in the future, customers may continue to purchase Chinese materials, putting Japanese companies under long-term competitive pressure. From an investment perspective, compared to Japanese materials and component stocks, related stocks in Taiwan are more attractive. (Jukan, Semiconductor Analyst, Citrini Research, USA)
