U.S. Tariff Uncertainty and Weakening Demand Pose Major Risks to 2H25 MLCC Market

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TrendForce’s latest MLCC research report reveals that uncertainty surrounding the U.S.’ reciprocal tariffs—despite the 90-day grace period—continues to cloud the global economic outlook. Although MLCC suppliers have not been directly affected by the trade war, growing caution and risk aversion among businesses and end markets have disrupted supply-demand dynamics in the first half of 2025. This raises concerns that the typical seasonal boost in the second half may fail to materialize.

TrendForce’s survey reveals that OEMs and ODMs pulled forward shipments of North American Chromebooks and certain consumer notebook orders to Q1, dampening procurement momentum for the traditional education notebook season that begins in April. For example, Q2 MLCC forecast order volumes from Dell and HP for education models are down 20–25% QoQ. Whether OEMs will now move part of their Q3 North American orders into Q2—following the tariff delay—remains a key factor to watch.

In the AI server segment, order and inventory momentum remain solid. ODMs with capacity in Mexico continue to ship normally under the protection of the USMCA agreement. However, the possibility of renewed U.S.-Mexico tariff negotiations cannot be ruled out.

Uncertain demand outlook and limited room for supplier discounts

TrendForce warns that as the global trade and economic environment deteriorates, end-market demand is weakening while sales costs surge. MLCC suppliers are now facing two key challenges: The risk of OEMs revising down their order volumes and growing pressure to cut prices.

The ripple effects of the trade war have also spread to global currency markets, with the Japanese yen gaining favor as a safe-haven currency. Since April, it has strengthened from 150 to 141 against the U.S. dollar. In this context, MLCC pricing—particularly for mid-to-low capacitance commercial-grade and automotive-grade products—has now fallen below pre-pandemic levels (4Q19). Intense price competition in 2024 has already eroded profit margins for high-end standard MLCCs used in AI servers.

With the rising risk of economic recession, low visibility on end-market demand, and potential currency volatility, MLCC suppliers are under mounting operational pressure and are likely to adopt stricter pricing strategies with limited room for concessions.