Often dubbed “the rice of the electronics industry”, multilayer ceramic capacitors (MLCCs) are the smallest yet indispensable components powering modern innovations from smartphones to electric vehicles (EVs).

These tiny capacitors are currently under the spotlight because the insatiable computing needs of artificial intelligence (AI) have caused an explosion in demand, a surge described as “scary” by Katsuya Sase, CEO of Japanese MLCC maker Taiyo Yuden.

Here is what you need to know about what Goldman Sachs calls the “largest and longest” cycle in MLCC history.

How has AI triggered a MLCC supply bottleneck?

The massive build-out of power-hungry data centres to meet the computing needs of AI is the key driver of this cycle. Servers dedicated to AI training and inference require substantially more ultra-high-capacitance MLCCs to accommodate the sharp increase in power consumption. An AI server needs up to 28,000 MLCCs per unit, a 13-fold increase from a standard set-up, according to China Securities.

Nvidia’s next-generation computing platform Rubin architecture, debuting later this year, uses 12,000 MLCC units on a single board, compared with 6,500 on the current GB200 platform, according to TrendForce.

Apart from AI infrastructure, demand from other AI applications, including humanoid robots, EVs and autonomous cars, is also on the rise.

An EV with Level 2+ autonomous driving capabilities uses more than 10,000 MLCC units, according to Murata Manufacturing, the world’s largest MLCC maker. In comparison, around 800 to 1,000 MLCCs are needed in each smartphone.