Fenghua Advanced Technology, a leading Chinese passive components manufacturer, has announced price increases of 5%-30% across multiple product lines including inductors, varistors, ceramic capacitors, and thick-film resistors. This move signals a turning point for the passive components industry after two years of inventory adjustments, with the sector now entering a phase of volume and price recovery.
The price adjustments respond to soaring raw material costs. Key materials including silver, tin, and copper have seen significant price increases this year, with silver prices rising over 50% annually. These cost pressures have severely squeezed profit margins, prompting Fenghua to pursue copper electrode alternatives and other material innovations.
Fenghua's move aligns with optimistic forecasts from global industry leaders:
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Yageo reports its AI business revenue share has grown from 5% to 10-12% and expects it to exceed 20% by 2026
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Murata has raised its full-year revenue outlook, noting that AI servers use over 300,000 MLCCs each—several times more than conventional servers
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Samsung Electro-Mechanics is focusing on AI servers and automotive electronics for double-digit growth
The recovery is driven by both cost pressures and demand growth:
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AI servers, automotive electronics, and edge computing are creating surging demand for high-end passive components
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AI servers require not only more components but also higher-frequency and more stable inductors and resistors
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Industry inventories have returned to healthy levels after the 2023-2024 adjustment period
ICgoodFind:Fenghua's price increase marks the start of a new growth cycle for passive components, with AI applications driving both volume and specification upgrades.
