Shares in Guangdong Fenghua, Suzhou GYZ, Chaozhou Three-Circle and upstream suppliers shoot up as relentless AI demand reshapes market
Chinese manufacturers of multilayer ceramic capacitors (MLCCs) – tiny components required in great numbers to regulate electrical flow in electronic devices – are riding a stock rally on the back of explosive first-half earnings, fuelled by insatiable global demand for artificial intelligence infrastructure.
Shares of Shenzhen-listed Guangdong Fenghua Advanced Technology, one of the country’s leading producers of consumer-grade MLCCs, surged by the exchange-imposed 10 per cent daily limit on Wednesday morning. It marked the second time the stock hit the ceiling this week, capping a rally of more than 180 per cent so far this year.
Meanwhile, Suzhou GYZ Electronic Technology jumped 20 per cent to hit the daily limit on Shanghai’s Nasdaq-style Star Market, and Chaozhou Three-Circle, a major domestic manufacturer of high-capacitance MLCCs, saw its Shenzhen-traded shares climb around 8 per cent, putting its year-to-date gain above 130 per cent. Its Hong Kong shares also rose 5 per cent on Wednesday.
Upstream suppliers also benefited from the momentum, with Jiangsu Boqian New Materials gaining nearly 6 per cent and Shandong Sinocera Functional Materials rising almost 3.5 per cent on Wednesday.
Often described as the “rice of the electronics industry” because of their tiny size and ubiquity, MLCCs are essential components in products ranging from smartphones and electric vehicles to AI servers.
The sector’s rally comes as the rapid buildout of power-hungry AI data centres and computing clusters continues to drive high demand for high-capacitance MLCCs, creating supply constraints across the supply chain.
Monthly shipments from the world’s top three suppliers, namely Japan’s Murata Manufacturing, South Korea’s Samsung Electro-Mechanics (SEMCO) and Japan’s Taiyo Yuden, hit a five-year high in June, according to a report by market research firm TrendForce on Tuesday.