China’s MLCC supply chain expanding rapidly amid surge in global AI demand
China’s upstream supply chain for multilayer ceramic capacitors (MLCCs) – tiny components dubbed “the rice of electronics” – is racing to expand capacity, as an artificial intelligence-driven boom triggers a surge in global orders. Shandong Sinocera Functional Materials, a major supplier of dielectric powder to MLCC manufacturers, told investors in a Shenzhen Stock Exchange filing on Wednesday…
China's upstream supply chain for multilayer ceramic capacitors (MLCCs) is rapidly expanding due to a surge in global demand driven by artificial intelligence. Shandong Sinocera Functional Materials, a key supplier of dielectric powder to MLCC manufacturers, announced plans to increase capacity to meet the growing needs of AI servers and vehicles.
The company reported a 17% sales growth and 9% net income increase in the first half of 2026. Other upstream suppliers, such as Jiangsu Boqian New Materials and Zhejiang Jiemei Electronic Technology, have also invested heavily in expanding production capabilities to meet the rising demand for MLCCs. The sector is entering a period of unprecedented growth, with Goldman Sachs describing it as the largest and longest in MLCC history.
High-performance MLCCs used in AI hardware and data centers have raised the standards for dielectric powder and release film performance, fueling further expansion efforts across the supply chain.
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