Taiwanese passive component distributor Nichidenbo expects business to remain robust through the third quarter, citing surging demand from artificial intelligence servers that’s reshaping the electronics supply chain.
The distributor’s management told investors that AI servers require up to 14 times more multi-layer ceramic capacitors (MLCCs) than traditional servers, with capacity needs jumping 27-fold. The power requirements driving this shift are substantial – AI servers consume between 10,000 to 15,000 watts compared to 2,000 watts for conventional units.
This demand surge has elevated passive components to the third-most important position in server bills of materials, behind only graphics processing units and memory chips. The company cited projections that global data center investments will reach $364.6 billion over the next decade, growing at an 11.4% compound annual rate.
Major cloud service providers are driving expansion plans, pushing MLCC specifications from X5R grade to higher-performance X6, X7 and X8 variants. Average selling prices for AI-related components command premiums dozens of times higher than consumer applications, according to company executives.
The optimistic forecast contrasts with traditionally weaker second-quarter seasonal patterns, though industry leaders like Murata Manufacturing predict AI server-related MLCC demand could double in 2025. Taiwan’s position as a key supplier to major server manufacturers positions local distributors to benefit from continued data center buildouts.
