High Capacitance MLCC: Competition at the Granular Level
07.17.2013 // Dennis M. Zogbi // Passives
Introduction: Competition in High Capacitance MLCC Is Intense
As the global multilayered ceramic chip capacitor (MLCC) markets approach the $10 billion U.S. dollar mark, competition is increasingly becoming more diversified as vendors rush to create new ceramic capacitor products that extend the traditional boundaries of the finished component into new areas to create new and exciting products. These products primarily increase volumetric efficiency while increasing capacitance, which are two end results that are technically opposed to each other. The value-added comes into the equation when additional aspects of the high capacitance MLCC are also tweaked along with increased volumetric efficiency and increased capacitance, such as higher operating voltages, performance characteristics and lower profiles. The competition among the top manufacturers of MLCC Murata, TDK, Samsung, Taiyo Yuden, Yageo and Walsin to create a differentiated product line is understandably as aggressive as it is intense because the first to market with a differentiated high capacitance MLCC product can enjoy up to a six to 24 month premium in price and profitability before the competition catches up and begins the tedious process of global price erosion.
High Capacitance MLCC: Market Dominance over Alternative Technologies:
The global MLCC market has outperformed the other primary capacitor dielectrics (i.e. tantalum, aluminum and plastic film capacitors) in terms of revenue generation over the past decade because of dramatic breakthroughs in electrostatic capacitor technology. These breakthroughs involve an increase in the capacitance value per cubic centimeter of ceramic capacitor, which in turn allows ceramic capacitors to effectively compete against electrolytic (i.e. tantalum and aluminum) capacitor technologies respectively. Since the pricing of capacitors is primarily dependent upon the combination of capacitance value, voltage rating and performance characteristic, the high capacitance MLCC can generate higher average unit pricing per piece as it moves up the electrolytic scale of value. This process also enables ceramic capacitors to generate the highest percentage of profitability of all the capacitor dielectrics, which in turn enables the top manufacturers to spend a higher percentage of their revenues on research and development, which invariably improves and entices the development process.
The MLCC generates capacitance through the stacking method, while other types of capacitors employ the wound method (aluminum and plastic film types), and still others employ the porous anode method (tantalum). Each of these methods conforms to the scientific maxim that capacitance is equivalent to the physical size of the finished product, or in fact, the available surface area of the finished product. In the MLCC, the surface area is increased by stacking up multiple layers of ceramic dielectric materials and metal electrode materials; while the wound solution increases the available surface area by tightly winding up a coated plastic film or aluminum metal foil, or by creating a surface area on a porous substrate. While the other dielectrics have been successful at increasing their capacitance value per cubic centimeter of capacitor, MLCC have dominated the process because they do so cost effectively. Ultimately, the feedstock materials associated with the production of ceramic chip capacitors is lower than the feedstock materials associated with other dielectrics. This gives MLCC a competitive advantage in the continuing quest for higher capacitance.
High Capacitance MLCC: to be First to Market with Differentiated Products:
The MLCC has in fact lent itself to significant advancements in the creation of capacitance because the materials that create the capacitor are readily manipulated through nanotechnology; or the consistent generation of spherical ceramic and metal particles that in turn create consistent and uniform dielectric and electrode layers at increasingly thinner levels. This, in turn, enables the capacitor manufacturer to stack up increasingly larger numbers of matching layers of dielectric and electrode within the standard capacitor case sizes, i.e. EIA 0201, 0402, 0603, 0805 and 1206, and subsequently increase the available surface area, and the corresponding capacitance of the finished capacitor. Therefore, from a market perspective, MLCCs have encroached upon alternative dielectrics, and augmented their existing $4 billion picofarad market with a $6 billion microfarad market (for MLCC between 1 and 100 µF); a market which would have otherwise gone almost entirely to tantalum chip capacitors.
So in addition to competing against manufacturers of electrolytic capacitors, MLCC vendors are also highly in tune with each other, and compete aggressively for share in the granular nooks and crannies of the high capacitance MLCC markets worldwide. To be first to market with differentiated MLCC products can mean enhanced profitability for the vendor for as long as 24 months, or until the competition figures out how to emulate such success at high yields. These areas of competition are primarily focused upon increasing the maximum capacitance value of high capacitance MLCC in general; increasing maximum capacitance value for each of the MLCC chip case sizes, increasing capacitance value while also increasing chip operating voltage, increasing capacitance value while not impeding chip performance characteristic, and increasing capacitance value while decreasing chip thickness.
Examples of each of these granular trends and the roadmap for future development is as follows:
Summary and Conclusion:
Competition in the high capacitance multilayered ceramic chip capacitor market has become granular, with a wide variety of market opportunities for vendors who are first to market with variations on the traditional MLCC theme. These include ceramic capacitor chip case size, chip operating voltage, chip performance characteristic, and chip thickness; and the first to market with a product can enjoy up to a 6 to 24 month premium in price and profitability before the competition catches up and begins the tedious process of global price erosion. Future roadmaps for development suggest a continuation of a myriad of programs designed to increase capacitance, volumetric efficiency and operating voltages in MLCC at yield ratios that support increased dollars sales and profitability.
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