April Japan MOF trade data confirms simultaneous volume and price gains in MLCCs, and Goldman Sachs remains bullish on three Japanese manufacturers

Overview

This report reviews the April MLCC trade data released by Japan's Ministry of Finance and cross-validates it against recent order and earnings performance of Japanese MLCC manufacturers. The data shows simultaneous increases in average selling price, export volume, and export value, leading Goldman Sachs to conclude that the AI server demand-driven MLCC upcycle is still in its early stage and to maintain its positive view on Murata Mfg., Taiyo Yuden, and TDK.

Core views

The core view is that GPUs/ASICs in AI servers require both miniaturization and higher capacitance within limited board space, and the technological barriers for low-voltage high-capacity MLCCs are rising. Murata Mfg., SEMCO, and Taiyo Yuden have supply advantages and may effectively raise prices by resetting product pricing with each technology transition. Although TDK does not yet have the technical capability to enter the low-voltage high-capacity MLCC market for GPU/ASICs, its high-voltage high-capacity MLCCs can leverage automotive and EV-related technologies and benefit from power circuit demand and improved capacity utilization.

Analysis framework

The report combines trade data validation, comparison of company order trends, analysis of product technology barriers, and a relative valuation framework: it first observes the month-over-month and year-over-year changes in MOF export prices, quantities, and values, then evaluates demand pull from AI servers, GPU/ASICs, and power circuits for different MLCC categories, and finally determines target prices using EV/GCI, CROCI/WACC, and industry multiples.

Methodology notes

• trade data trackingMOF trade statistics

  Use monthly trade statistics from Japan's Ministry of Finance to track MLCC export prices, export volumes, and export values.

  April data showed simultaneous increases in average export prices, volumes, and values, and was used to validate improving MLCC demand and pricing conditions.

• valuation methodologyEV/GCI vs. CROCI/WACC

  Value stocks based on FY3/28E EV/GCI relative to CROCI/WACC, with different premiums to the industry 8x multiple.

  Murata Mfg. uses a 50% premium to the industry multiple, Taiyo Yuden uses a 30% premium, and TDK uses a 10% premium or a relative industry EV/DACF multiple, reflecting differences in growth, returns, and business quality.

• factor frameworkGS Factor Profile

  Compare individual stocks with the market and industry peers across four dimensions: growth, financial returns, valuation multiples, and composite percentile ranking.

  Growth is based on forward sales, EBITDA, and EPS; financial returns are based on ROE, ROCE, and CROCI; valuation multiples are based on metrics such as P/E, P/B, P/D, EV/EBITDA, EV/FCF, and EV/DACF.

• event frameworkM&A Rank

  Goldman Sachs uses a score of 1 to 3 to measure the probability that a company becomes an M&A target.

  When the M&A Rank is 1 or 2, M&A factors are incorporated into the target price; Rank 3 is usually considered immaterial and may not enter target price discussions.

Asset mapping & comparison

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

• Murata Mfg.

  Core beneficiary; one of the suppliers of low-voltage high-capacity MLCCs, and its Buy rating is maintained.

  Strengths

  It has the technological capability for low-voltage high-capacity MLCCs used around GPU/ASICs and may benefit from miniaturization, higher capacitance, and pricing resets.

  Weaknesses

  The report does not elaborate on company-specific weaknesses in detail, but its risk exposure includes declining smartphone production and deteriorating MLCC supply-demand conditions.

  Comparison

  Compared with TDK, Murata Mfg. has more direct participation capability in the GPU/ASIC low-voltage high-capacity MLCC market.

  Risks

  Declining smartphone production, worsening MLCC supply-demand conditions, yen appreciation.

• Taiyo Yuden

  Core beneficiary; one of the suppliers of low-voltage high-capacity MLCCs, and its Buy rating is maintained.

  Strengths

  It is listed as one of the three suppliers of low-voltage high-capacity MLCCs for GPU/ASICs and is expected to fully benefit from expanding AI server demand.

  Weaknesses

  It remains cyclically sensitive to smartphone demand and MLCC industry supply-demand conditions.

  Comparison

  Like Murata Mfg., it has exposure to low-voltage high-capacity MLCCs related to AI servers; its valuation premium is lower than Murata Mfg.'s.

  Risks

  Weaker-than-expected smartphone demand, worsening MLCC supply-demand conditions, yen appreciation.

• TDK

  Core covered name; Buy rating maintained, but its benefit path is more skewed toward high-voltage high-capacity MLCCs.

  Strengths

  Orders for high-voltage high-capacity MLCCs are strong, it can use product technologies similar to those for automotive and EV applications, and factory utilization is expected to improve.

  Weaknesses

  The report points out that TDK currently does not yet have the technology to enter the low-voltage high-capacity MLCC market for GPU/ASICs and is still waiting for materials development in cooperation with Nippon Chemical Industrial.

  Comparison

  Compared with Murata Mfg. and Taiyo Yuden, TDK has weaker direct exposure to low-voltage high-capacity MLCCs for AI server GPU/ASICs, but benefits more from high-voltage products used in power circuits.

  Risks

  Declining smartphone production, rising input costs, yen appreciation.

Key data

• April MLCC average export price+3% month over month; +16% year over yearThe price increase is consistent with technology upgrades and improving supply-demand conditions.
• April MLCC export volume+7% month over month; +10% year over yearExport volume growth supports the view that strong orders are continuing.
• April MLCC export value+9% month over month; +28% year over yearValue growth exceeded volume growth, showing that both volume and price contributed.
• Murata Mfg. target price¥5,40012-month target price; rated Buy and on the Conviction List.
• Taiyo Yuden target price¥7,10012-month target price; rated Buy.
• TDK target price¥3,00012-month target price; rated Buy.

Impact & implications

If AI server-related GPU/ASIC demand continues to expand, suppliers of low-voltage high-capacity MLCCs may gain stronger product mix, greater pricing reset capability, and better order visibility. High-voltage high-capacity MLCCs may also benefit from improved power circuit demand and higher capacity utilization. For investors, the report positions the MLCC cycle as an early-stage upcycle that could last longer, though risks around smartphone demand, worsening supply-demand conditions, yen appreciation, and input costs still need attention.

Risks

• Smartphone production or demand may be weaker than expected.
• A deterioration in the MLCC supply-demand environment could weaken price and utilization improvements.
• Yen appreciation may affect the profitability and valuation of Japanese exporters.
• Rising input costs may compress profit margins for manufacturers such as TDK.
• TDK's entry into the GPU/ASIC low-voltage high-capacity MLCC market still depends on progress in materials development.

What to watch

• Whether average MLCC export prices, export volumes, and export values continue to rise simultaneously in subsequent monthly MOF trade data.
• Order trends, capacity utilization, and pricing reset developments at Japanese MLCC manufacturers.
• AI server GPU/ASIC demand and changes in technical specifications for low-voltage high-capacity MLCCs.
• Whether materials development cooperation between TDK and Nippon Chemical Industrial enables TDK to enter the GPU/ASIC-related low-voltage high-capacity MLCC market.
• Smartphone end-demand, EV-related demand, and the trend of the yen exchange rate.