The trend toward long-term supply agreements is expanding beyond memory, with tightening MLCC supply prompting major tech companies to secure component availability. According to ZDNet, Samsung Electro-Mechanics has signed a one-year supply contract with a major customer for multilayer ceramic capacitors (MLCCs) used in AI servers.

As noted by Global Economic News, Samsung Electro-Mechanics announced on June 30 a KRW 450 billion (USD 330 million) supply agreement with a global big tech customer for AI server MLCCs. The contract will run for one year, from January 1 through December 31, 2027.

ZDNet highlights that such long-term agreements are rare in the MLCC industry, where short-term orders are the norm, signaling structurally stronger demand for high-performance MLCCs. While Samsung Electro-Mechanics did not disclose the customer’s identity, industry sources believe the agreement is with one of North America’s leading cloud service providers (CSPs), the report adds.

Following the agreement, Samsung Electro-Mechanics is also in talks with its global customer and other major technology companies to expand supply beyond 2027, ZDNet reports.

Samsung Electro-Mechanics is a leading supplier in the high-end MLCC market. According to Global Economic News, Samsung Electro-Mechanics currently holds 25% of the global MLCC market. In the technologically demanding AI server MLCC segment, however, the company has secured more than a 40% market share.

MLCC Demand Accelerates With AI Servers

The growing adoption of AI servers is further boosting demand for high-performance MLCCs. According to ZDNet, AI servers typically require more than 10 times as many MLCCs as conventional servers. A single GPU generally contains over 20,000 MLCCs, while a server rack can use as many as 600,000, the report notes.

According to TrendForce, the AI arms race among global CSPs is accelerating the adoption of in-house ASIC accelerators, which increasingly rely on small-form-factor, high-capacitance, high-temperature-resistant MLCCs. TrendForce expects multiple demand drivers to converge between late 3Q and early 4Q, potentially turning a latent supply risk into a tangible shortage.

Yonhap News notes that as the MLCC market becomes increasingly supplier-driven, the pricing power of major manufacturers—including Samsung Electro-Mechanics, Japan’s Murata, TDK, and Taiyo Yuden—is strengthening. The report adds that prices for some MLCC products have already increased, while long-term supply agreements (LTAs) are gaining traction.

Long-Term Silicon Capacitor Supply Agreements

The rapid growth of AI semiconductors is also lifting demand for related components, making long-term supply agreements an increasingly common way to secure stable supply. As reported by ZDNet, Samsung Electro-Mechanics also signed a KRW 1.5 trillion long-term silicon capacitor supply agreement with a major global company on May 20. The two-year contract runs from January 1, 2027, through December 31, 2028.

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(Photo credit: Samsung Electro-Mechanics)