METI Data Shows March Japan Electronic Component Production Strong, ABF Substrates and Si MOSFET Key Highlights
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METI Data Shows March Japan Electronic Component Production Strong, ABF Substrates and Si MOSFET Key Highlights
Japan's March 2026 electronic component and semiconductor production both slightly above seasonal levels, with ABF rigid module substrates growing 53% YoY and Si MOSFET production continuing to grow YoY, supported by AI server demand for low-to-medium voltage products.
- March Japan electronic component and semiconductor production slightly above 20-year seasonal average
- ABF substrate production value grew 53% YoY and 12% MoM, positive for Ibiden
- MLCC production stagnation continues since H2 2025, down 14% YoY
- Si MOSFET production continues stable YoY growth, discrete semiconductor production up 2% YoY
- Semiconductor memory chip production strong, up 132% YoY and 18% MoM
- Murata Manufacturing and Taiyo Yuden maintain industry favorite rating, reaffirmed after Q4 results release
Report interpretation
Overview
The Ministry of Economy, Trade and Industry (METI) released March 2026 production statistics on May 19. The report shows that domestic Japanese electronic component and semiconductor production both slightly exceeded the past 20-year seasonal average. In the electronic components sector, rigid module substrate (including ABF substrates and FC-BGA) production value maintained strong growth, while passive components especially MLCC production continued a stagnant trend since H2 2025. In the semiconductor sector, memory chip production performed strongly, Si MOSFET output grew steadily, indicating continuous expansion in demand for low-to-medium voltage products from AI servers.
Core views
Passive components overall showed divergence. MLCC production was troubled, with domestic output value falling 14% YoY in USD terms in March, though volume increased 12% MoM. However, USD-denominated value rose only 11% MoM, and unit price (USD) actually fell 1% MoM, reflecting weak demand. In contrast, other passive components such as resistors, capacitors, transformers, inductors, and connectors remained consistent with seasonal levels, maintaining stability. Rigid module substrates were the highlight of this report. Domestic rigid module substrate production (including FC-BGA and ABF substrates) value surged 53% YoY and 12% MoM in March, showing strong growth momentum. This performance directly benefited from the driver of AI server demand, constituting clear positive support for key suppliers in this field like Ibiden. Other electronic component products also improved. Mechanical component production grew 2% YoY and 10% MoM; electronic circuit board mounting substrates grew 11% YoY and 18% MoM, all rising moderately. In semiconductors, memory chips were the biggest highlight, with March production value skyrocketing 132% YoY and 18% MoM, far surpassing other categories, reflecting strong pull in storage demand. Discrete semiconductors (including Si MOSFETs) grew slightly 2% YoY and 9% MoM, where Si MOSFET output grew steadily YoY, serving as the main growth driver for this category, suggesting expanding demand for low-to-medium voltage MOSFETs used in AI servers. MCU production fell 18% YoY but rose 4% MoM, presenting a pattern of YoY decline but MoM rebound. Logic chip production grew 1% YoY and 8% MoM, basically consistent with seasonal levels.
Analysis framework
The report adopts official METI domestic production statistics as core material, analyzing major electronic component and semiconductor categories item-by-item from two dimensions: quantity and value, and two time dimensions: YoY and MoM. By comparing against seasonal levels (past 20-year average), it judges whether March production exceeded normal levels. It also notes the impact of exchange rates (weak yen) on USD-denominated production values, and decomposes the contribution of unit price changes to output and value growth. Finally, combining downstream demand trends such as AI servers and low-to-medium voltage power devices, it infers the structural reasons for production dynamics in each category, thereby making judgments on the business prospects of relevant listed companies.
Methodology notes
Understanding value growth drivers by separating output and unit price changes
When analyzing value growth, the report not only looks at YoY and MoM magnitude, but deliberately decomposes the contribution of output growth versus unit price (ASP) changes. For example, MLCC production value rose 11% MoM, but output grew 12% while ASP fell 1%, indicating value growth stemmed from pure output expansion rather than price hikes, reflecting market demand improvement but limited pricing power.
Inferring relative strength of supply and demand through fluctuations in production data
ABF substrate production surged 53% YoY and Si MOSFET production grew steadily; the report associates this directly with expanded AI server demand,说明 Supply side actively increasing production to meet downstream demand. Meanwhile, MLCC production stagnation suggests demand recovery has yet to occur in this category, forming a contrast between the two.
Impact of exchange rates (weak yen) on USD-denominated export products
When analyzing passive components, the report specifically mentions 'excluding the impact of yen weakness', indicating exchange rate volatility significantly impacts USD-denominated electronic component production values. In domestic production statistics, USD-denominated value growth is affected by output/price and exchange rates, requiring separate judgment.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Ibiden（4062）ABF rigid module substrate production grew 53% YoY, company is major supplier, directly benefits from expanded AI server demand
- Strengths
- As core supplier of rigid module substrates, report links its strong production performance directly to Ibiden's business prospects, implying competitive advantages in related areas
- Murata Manufacturing (6981, ¥6,180, Overweight)Leader in passive components industry, report reassessed as industry favorite based on Q4 results
- Strengths
- As industry favorite, implies company possesses pricing power and market share advantages in fields like MLCC passive components, able to maintain competitive position amidst industry volatility
- Comparison
- Listed as industry favorite alongside Taiyo Yuden
- Taiyo Yuden (6976, ¥7,768, Overweight)Leader in passive components industry, report reassessed as industry favorite based on Q4 results
- Strengths
- Also listed as industry favorite, reflecting its core position and competitiveness in passive components supply chain
- Comparison
- Listed as industry favorite alongside Murata Manufacturing
Key data
- MLCC Production Value (USD Base)YoY -14%, MoM +11%Although output increased 12% MoM, unit price fell 1% MoM, production value still troubled YoY
- Rigid Module Substrate Production ValueYoY +53%, MoM +12%Strongest category this period, driven by AI server demand
- Total Electronic Component Production ValuePassive components YoY -9% / MoM +10%; Mechanical components YoY +2% / MoM +10%; Electronic substrates YoY +27% / MoM +12%; Circuit board mounting substrates YoY +11% / MoM +18%Passive components still negative YoY, mainly dragged by MLCC
- Memory Chip Production ValueYoY +132%, MoM +18%Strongest category in semiconductors, far exceeding other categories
- Si MOSFET ProductionStable YoY GrowthDiscrete semiconductors YoY +2% / MoM +9%, Si MOSFET was main driver
- MCU ProductionYoY -18%, MoM +4%Continuous YoY decline but MoM rebound
- Logic Chip ProductionYoY +1%, MoM +8%Basically consistent with seasonal level
Impact & implications
Strong performance of rigid module substrates (especially ABF substrates) directly benefits substrate suppliers like Ibiden, with AI server demand support expected to sustain growth in this category over the foreseeable medium term. Continued YoY growth in Si MOSFET production suggests application prospects of low-to-medium voltage power tubes in AI infrastructure expansion, benefiting related discrete device manufacturers. In contrast, although the stagnant situation of MLCC production eased slightly (turning positive MoM), it remains in trouble YoY, indicating that the demand recovery path for this category still requires observation. The report reaffirms Murata Manufacturing and Taiyo Yuden as industry favorites based on Q4 results release again, reflecting an evaluation of the comprehensive competitive positions of these two enterprises in passive components and electronic components fields.
Risks
- Uncertainty in MLCC demand recovery: Although March production improved MoM, it still fell 14% YoY, difficult to predict timing of demand recovery
- Exchange rate volatility: Production statistics denominated in USD, yen movements will affect value fluctuations, potentially masking or amplifying actual output trends
- Sustainability of AI server demand: Strong growth in rigid module substrates and Si MOSFETs mainly driven by AI demand; if demand growth slows or fluctuates, related categories face adjustment risks
What to watch
- Whether subsequent months' MLCC production can continue MoM increase and finally reverse YoY decline
- Whether rigid module substrate production growth rate can maintain high两位数 growth or show top-level retreat
- Whether Si MOSFET and other AI-related chip output growth YoY can remain stable
- Capacity adjustments and pricing trends among leading companies like Murata Manufacturing and Taiyo Yuden across different categories