Shifting Demand for Multi-Layer Ceramic Capacitors Creates a Critical Supply Shortfall for Industrial and Military Needs
by Scott Horton, Vice President, Johanson Technology
Industrial, medical, and military demand for high quality, high-voltage multi-layer ceramic capacitors (MLCCs) has been hit hard by a shift in production by the world’s largest MLCC manufacturers who are focusing on a seemingly insatiable demand for smaller, lower voltage—and in some way—lower performance MLCCs. This demand has been fueled by the global growth of 5G networks and continued advancements in smartphones and mobile devices which are consuming significantly more MLCCs per device.
As the principal manufacturers pivot away from the larger high voltage, high-Q (High Quality) MLCCs used by industry and the military, OEMs are experiencing significant delays in MLCCs of up to six months. The extent of the supply shortage jeopardizes product release schedules, industrial market share, and potentially even military readiness.
This represents a massive “carrot” hanging in front of the major MLCC manufacturers. When you consider that a high-end smartphone today can require substantially more MLCCs in a single device as compared to a similar phone only a few years ago, the current demand for smaller, lower power MLCCs is like nothing the market has seen before.
As a result of a slowdown in consumer demand for capacitors in 2019, many OEMs and distributors were left holding surplus inventory. As a result, these same OEMs and distributors were hesitant to order additional inventory in 2020. Now, as the market ramps up, so does the demand for MLCCs despite very low capacitor inventory. This further exacerbates the shortage of larger, high voltage, high-Q MLCCs, since some manufacturers have focused production on smaller/lower voltage MLCCs during this time.
Now both ends of the market are scrambling to re-stock, including the large electronics distributors. It is also largely Asian MLCC manufacturing supporting telecom and mobile device operations which are also based in Asia, making fulfillment of industrial MLCC supply needs in Western markets even more acute.
The result is a ripple effect to the industrial and military market sector that is not fully understood. Although a shortage of electronic products used to manufacture consumer products like smartphones and automobiles would be national news, the lack of supply of larger, higher voltage MLCCs for industrial and military applications is typically under-reported. However, it will continue to squeeze business customers and eventually end users until it is resolved.
Multi-layer Ceramic Components
MLCCs consist of laminated layers of specially formulated, ceramic dielectric materials interspersed with a metal electrode system. The layered formation is then fired at high temperature to produce a sintered and volumetrically efficient capacitance device. A conductive termination barrier system is integrated on the exposed ends of the chip to complete the connection.
Capacitance is primarily determined by three factors: the k of the ceramic materials, the thickness of the dielectric layers, the overlap area and the number of the electrodes. A capacitor with a given dielectric constant can have more layers and wider spacing between electrodes or fewer layers and closer spacing to achieve the same capacitance.
Industrial, medical and military consumers of MLCCs depend on high voltage and high-Q capacitors for power supplies, amplifiers, MRI coils, plasma generators, lasers and many other specialized applications. In circuits with higher currents, higher-Q MLCCs are preferred to reduce self-heating.
The Q factor represents the efficiency of a capacitor’s rate of energy loss. High-Q capacitors lose less energy, reducing the need to dissipate or cool the heat, which protects the board from damage and performance loss in sensitive and high liability applications.
Not all MLCCs are created equal, even among the high performance MLCCs, yet ensuring a consistent level of performance is critical for the high reliability applications required by industrial and military end users. If the MLCC manufacturer does not tightly control the layer count, they might be providing 10-layer batches in one batch and then later deliver 17-layer parts in a subsequent batch. If so, the two parts will not perform the same at high frequencies.
Domestic Supply Ramping Up
Shifts in supply and demand within the overall MLCC market, which is estimated to grow to a $12 billion market by 2025, are clearly causing critical supply shortages for industrial, medical and military customers who require a higher quality, larger format multi-layer ceramic capacitor.
Fortunately, domestic sources of MLCCs needed in industrial and military applications have been ramping up their capacity to fulfill orders for large format, High-Q ceramic capacitors for industrial, medical, and military applications. Through the modernization of production facilities, expansion of product lines, and additional shifts, leading domestic manufacturers can provide fulfillment of large size high voltage MLCCs in the range of 10 weeks.
This is welcome news for industrial or military customers that will not need to delay the manufacture and shipments of their products because of a capacitor delay.
For more information, contact Johanson Technology at (805) 389-1166 or visit their website at www.johansontechnology.com or www.johansondielectrics.com.