Japan Electronic Components April Data: Passive Components Beat Expectations, MLCC Shows Signs of Bottoming Out

Overview

This report provides J.P. Morgan's interpretation of the Ministry of Economy, Trade and Industry (METI) April 2026 production statistics for electronic components and semiconductors. The core conclusion is that electronic components overall aligned with seasonal norms, with passive components outperforming expectations and MLCC serving as the main growth driver; semiconductors overall underperformed seasonal norms, but memory remained strong. The report notes that while MLCC data in April did not show a clear upward trend, signs of bottoming out have emerged, leading to expectations for May and beyond. ABF substrates (rigid module substrates) saw a reactive decline in April but maintained an upward trend, positively impacting Ibiden.

Core views

Performance among passive components diverged, with MLCC standing out. In April, the production value of passive components (USD basis) decreased 10% YoY but increased 5% MoM; although still negative YoY, the MoM improvement was significant. Specifically, MLCC production volume increased 11% MoM, production value increased 12% MoM, and average selling price (ASP) increased 1% MoM, showing growth in both volume and price. The report points out that MLCC showed signs of bottoming out in March-April, but the path to recovery in production value is not yet complete, requiring observation of subsequent months to confirm the trend. Other components performed modestly. Resistors maintained a gradual upward trend, capacitors generally met expectations, while inductors, quartz crystals, filters, and others lacked catalysts, with most products flat or declining MoM. Mechanical components increased 1% MoM, electronic substrates decreased 8% MoM, and electronic circuit mounting boards decreased 6% MoM, overall aligning with seasonal norms. Semiconductors showed significant divergence, with memory being the standout performer. Memory production value increased 277% YoY and 7% MoM, continuing its strong performance; however, discrete semiconductors decreased 9% YoY and 18% MoM, MCUs decreased 30% YoY and 6% MoM, and logic ICs decreased 7% YoY and 8% MoM, overall underperforming seasonal norms. The report emphasizes the need to distinguish between METI production data and Ministry of Finance (MoF) trade data, noting significant discrepancies in MLCC data since December 2025, with the report placing more weight on MoF trade data. ABF substrate trends are improving. Rigid module substrates (including ABF substrates and FC-BGA) saw production value increase 9% YoY but decrease 15% MoM in April, indicating a reactive decline after strong production in March, but the overall upward trend remains, positively impacting Ibiden.

Analysis framework

The report employs an official production statistics interpretation method, using METI's monthly production statistics as the core data source, combined with comparative analysis against seasonal norms from the past 20 years. The analytical framework is as follows: First, compare April data with seasonal norms to determine if performance exceeded expectations for each category; second, conduct dual-dimensional breakdowns of YoY and MoM changes to distinguish trend shifts from seasonal fluctuations; third, perform volume-price splits (production volume, production value, ASP) for key categories like MLCC to identify growth drivers; fourth, compare differences between METI production data and MoF trade data to assess data reliability; finally, link macro data to individual stock investment logic to identify beneficiaries.

Methodology notes

• Industry/Sector Analysis FrameworkVolume-Price Split

  Volume-Price Split Analysis

  Decomposes changes in production value into changes in production volume and average selling price (ASP) to help identify whether growth stems from demand expansion (volume increase) or price increases (price increase). In this report, MLCC volume +11%, value +12%, and ASP +1% indicate that growth primarily came from volume recovery rather than price hikes.

• Industry/Sector Analysis FrameworkSupply-demand framework

  Supply-Demand Framework Analysis

  Judges industry supply-demand dynamics through production data. This report uses METI production statistics to assess supply-side changes in various electronic component categories, combining seasonal norms to evaluate demand strength, with MLCC bottoming-out signals reflecting marginal improvements in supply and demand.

• Cycle and Prosperity FrameworkProsperity Inflection Point Analysis

  Prosperity Inflection Point Analysis

  Identifies inflection point signals where industry prosperity shifts from downward to upward. The report notes that MLCC showed signs of bottoming out in March-April; although a clear upward trend has not yet formed, it is a potential inflection signal, requiring tracking of May and subsequent data for confirmation.

• Industry/Sector Analysis FrameworkUpstream-Midstream-Downstream Transmission in Supply Chain

  Supply Chain Transmission Analysis

  Analyzes the transmission effect of upstream component production data on mid-stream modules and downstream end-products. As a key material for IC packaging, the upward trend in ABF substrates reflects improved demand in downstream semiconductor packaging, benefiting upstream suppliers like Ibiden.

• Company Fundamentals and Financial Framework

  Cross-Validation of Official Statistical Data and Trade Data

  The report references both METI production data and MoF trade data, finding discrepancies in MLCC data (production value lower than export value). Through cross-validation, it assesses data reliability and ultimately places more weight on trade data to judge industry trends.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Murata Manufacturing (6981.T)

  Beneficiary - MLCC leader, directly benefits from recovery in MLCC production volume and value

  Strengths

  Leading market share in MLCC, high elasticity in capacity recovery

  Weaknesses

  Path to production value recovery not yet complete, requires observation of subsequent months to confirm trend

  Comparison

  Top pick in electronic components sector alongside Taiyo Yuden, with higher proportion of MLCC business

  Risks

  MLCC demand recovery falls short of expectations, intensified price competition

• Taiyo Yuden (6976.T)

  Beneficiary - Major MLCC supplier, benefits from recovery in MLCC demand

  Strengths

  Strong MLCC technical capabilities, high-quality customer base

  Weaknesses

  Smaller scale than Murata, relatively weaker risk resistance

  Comparison

  Top pick in electronic components sector alongside Murata, with high proportion of MLCC business

  Risks

  MLCC demand recovery falls short of expectations, fluctuations in capacity utilization

• Ibiden (4062.T)

  Beneficiary - Major ABF substrate supplier, benefits from upward trend in substrates

  Strengths

  Leading technology in ABF substrates, benefits from improved demand in semiconductor packaging

  Weaknesses

  Data showed reactive decline in April, significant short-term volatility

  Comparison

  Different logic from electronic component stocks, more directly benefits from semiconductor packaging demand

  Risks

  Fluctuations in ABF substrate demand, risk of semiconductor cycle downturn

Key data

• Passive Components Production Value (USD)-10% YoY, +5% MoMApril performance outperformed seasonal norms, with significant MoM improvement
• MLCC Production Volume+11% MoMSignificant volume recovery indicates demand-side improvement
• MLCC Production Value (USD)+12% MoMValue growth slightly higher than volume, with small positive contribution from ASP
• MLCC Average Selling Price (ASP, USD)+1% MoMPrices stabilized, with no significant downward pressure
• Memory Semiconductor Production Value (USD)+277% YoY, +7% MoMContinued strong performance, the only highlight in the semiconductor sector
• Rigid Module Substrate Production Value (USD)+9% YoY, -15% MoMReactive decline after strong production in March, but upward trend maintained
• Discrete Semiconductor Production Value (USD)-9% YoY, -18% MoMWeak performance, below seasonal norms
• MCU Production Value (USD)-30% YoY, -6% MoMSignificant decline, indicating pressure on demand side

Impact & implications

For the electronic components industry, the bottoming-out signals in passive components, especially MLCC, are positive signs; if data from May and beyond confirms an upward trend, it may signal the arrival of an industry prosperity inflection point. For the semiconductor industry, the strong performance of memory contrasts sharply with the weakness in other categories, reflecting structural divergence. For individual stocks, Murata Manufacturing and Taiyo Yuden, as MLCC leaders, will directly benefit from the recovery in MLCC demand; Ibiden, as a major supplier of ABF substrates, will benefit from the upward trend in substrates. The report highlights the need to monitor the discrepancy between METI data and MoF trade data, as trade data shows growth in both MLCC export value and unit prices, which may more accurately reflect actual market demand.

Risks

• Path to MLCC production value recovery not yet complete, data for May and beyond may fall short of expectations
• Significant discrepancies exist between METI production data and MoF trade data, raising questions about data reliability
• Semiconductors overall underperformed seasonal norms, with weak demand in categories other than memory
• Rigid module substrates declined 15% MoM in April, indicating significant short-term volatility

What to watch

• MLCC production data for May and beyond to confirm formation of a clear upward trend
• Changes in MLCC export values and average unit prices in Ministry of Finance (MoF) trade data
• Subsequent monthly production value data for ABF substrates to verify sustainability of upward trend
• Whether demand for non-memory semiconductor categories (discrete, MCU, logic IC) stabilizes