AI servers are driving a surge in demand for high-end passive components, rapidly eating into multilayer ceramic capacitor (MLCC) capacity and extending lead times to more than 16–20 weeks. As a result, some orders that once went to major Japanese and South Korean suppliers are gradually spilling over to Taiwan-based makers.
Industry sources familiar with the passive-components sector note that Japanese and South Korean giants still dominate the small-size, medium- to high-voltage, and high-capacity MLCC segments.
But in AI server rack power management, Taiwan makers specializing in large-size, high-power, low-loss (NP0) MLCCs — including Holy Stone Enterprise and Walsin — are positioned to win supply advantages as data-center power architectures shift to 800V high-voltage direct current (HVDC).
The AI rack opportunity
Industry data show that in GB200 rack-scale applications, high-power MLCC usage for sizes 1206 and above can reach as many as 4,000 units. Most are specialty parts requiring high reliability, high capacity, and anti-board-bending capability, and their average selling prices (ASPs) are far higher than those of consumer-grade products.
Power supply units (PSUs) account for the largest share of demand, at up to 1,800 units, while battery backup units (BBUs) require about 800 units. Compute and switch trays need between 300 and 1,350 units, depending on design specifications.
Holy Stone eyes next-gen platforms
Holy Stone noted that AI server GPU power is advancing rapidly, while PSU designs are shifting from alternating current (AC) to direct current (DC). As customers pursue higher power density within limited space, demand is rising for customized NP0, high-voltage, high-capacity X7S, and high-temperature X8M MLCCs.
Holy Stone added that it has passed qualification at a major Taiwan power-supply maker, securing entry into next-generation AI server platforms, including GB200, GB300, and Vera Rubin. It expects MLCC revenue to grow 20–30% in 2026, with AI products alone set to double their contribution from 2025.
Prosperity Dielectrics banks on upstream edge
Prosperity Dielectrics noted that NP0 MLCCs, owing to their extremely stable performance, are gradually replacing traditional film capacitors in LLC resonant converters inside PSUs. Meanwhile, X7R and X7T MLCCs are beginning to replace aluminum and tantalum capacitors, with applications in AI servers and electric vehicles (EVs) heating up.
Prosperity Dielectrics acknowledged that it trails its peers somewhat in the adoption timeline, but its products have already entered customer designs. Looking ahead, it hopes to leverage its in-house upstream ceramic powder capability to accelerate customized product development and win more market share. AI products accounted for 6.5% of its revenue in the first quarter of 2026, and the company expects that share to rise to 10% for the full year 2026.
Capacity race and the three-year outlook
Notably, because high-end MLCCs such as NP0 fall into the specialty category, capacity and suppliers are relatively limited. Holy Stone and Prosperity Dielectrics have both increased capital expenditure (capex) to expand production, with one core priority being a stronger upstream ceramic powder supply.
Industry observers are bullish on high-end MLCCs targeting power density applications, saying they can be used not only in AI server power racks but also in EVs, low-Earth-orbit satellites, and the dexterous hands of humanoid robots. Order growth momentum is expected to expand steadily over the next three years.
Article translated by Charlene Chen and edited by Jerry Chen
