Home / Business and Economy / AI Rally Powers Asian Component Makers Higher
AI Rally Powers Asian Component Makers Higher
29 Apr
Summary
- AI infrastructure growth boosts demand for supporting components.
- MLCCs, substrates, and TCB are key growth areas in AI supply chain.
- Component prices are increasing due to high demand and tight supply.

The artificial intelligence rally, initially concentrated on chipmakers, is now significantly impacting the wider Asian supply chain. Investors are increasingly focusing on less prominent but crucial components that enable powerful processors. These include multi-layer ceramic capacitors (MLCCs), advanced chip substrates, and thermal compression bonding (TCB) processes.
Companies specializing in these areas, primarily located in South Korea, Taiwan, Japan, and China, have seen substantial stock gains. This trend is fueled by the immense power demands of AI servers, which necessitate a higher quantity of stabilizing components compared to conventional systems. An AI server can require 10 to 15 times more MLCCs than a standard server.
The escalating demand has led to a tightening of supply and a subsequent increase in component prices. Manufacturers are considering price hikes, and analysts predict sustained high prices due to tight supply and demand. Production lines for MLCCs and substrates are already operating at over 90% capacity, leaving little room for increased AI-driven demand.