Chaozhou Three-Circle(Group)Co.,Ltd. (06951) climbed more than 5% during the morning session, with shares trading 5.44% higher at HK$131.70 as of the latest update, and turnover reaching HK$107 million. The move comes as the industry grapples with shifting supply dynamics in the multilayer ceramic capacitor (MLCC) market.

Recently, Murata announced plans to halt production of multiple consumer-grade and automotive-grade MLCC models during its fiscal 2026, covering mainstream series such as GRM and GCM. This decision signals a broader strategic pivot away from traditional applications.

According to Sinolink Securities, the combination of price hikes by leading MLCC manufacturers and Murata's gradual exit from consumer electronics, automotive, and RF applications underscores the persistently robust demand from AI. Capacity expansion is struggling to keep pace with the growth rate of AI-related demand, and the brokerage continues to hold a positive outlook on the MLCC supply chain beneficiaries.

Huafu Securities highlights a key differentiator in this cycle: AI servers significantly boost consumption of higher-capacity products. The number of MLCCs used in an AI server exceeds that of a standard server by more than tenfold, and these components must operate continuously 24/7 under high-temperature and high-pressure conditions. On the supply side, AI creates a "siphoning effect"—high-capacity MLCCs can consume production capacity at a ratio of up to 7:1 compared to standard ones, with lower yields adding further strain.

The brokerage suggests that as more standard product lines are squeezed out during the transition process, supply tightness could intensify, paving the way for additional shortages across the sector.