Price surge: Dual drivers of costs and AI demand, how should the supply chain respond?

　　Recently, industry sources revealed that Yageo, a leading passive component manufacturer, has officially issued a price increase notice to its customers, planning to raise prices for certain consumer-grade resistor products by 15% to 20% starting February 1. Capacitor prices, however, will remain stable for now. This marks another round of price adjustments by Yageo since the second half of 2025, reflecting the widespread cost pressures and supply-demand shifts currently facing the industry.


　　Price hikes continue: Multiple manufacturers raise prices as cost pressures persist

　　Yageo’s latest price adjustment is not an isolated incident. Looking back at the second half of 2025, KEMET (a Yageo subsidiary) implemented two rounds of price increases for tantalum capacitors—in June and October—with hikes ranging from 10% to 30%. In December of the same year, Yageo again announced a 10% to 20% price increase for mid-to-high voltage, high-capacitance automotive-grade MLCCs and thick-film resistors. Additionally, Panasonic also raised prices for certain tantalum capacitors by 15% to 30% effective February 1 this year.

　　Fenghua Advanced Technology, a leading A-share-listed passive component manufacturer in China, recently disclosed to institutional investors that it has adjusted prices for certain products—including inductor beads and varistors—based on rising raw material costs. According to its price increase notice issued in November 2025, Fenghua raised prices across multiple product lines by 5% to 30%, driven by significant increases in the prices of silver, tin, copper, and other metals.

　　Behind this wave of price adjustments lies a notable surge in raw material prices, particularly silver. Data shows that the international spot silver price surpassed $92 per ounce in mid-January 2026, hitting a record high with a year-to-date increase of over 28%. Domestic silver prices have also risen sharply in tandem. As a critical material for electrodes and termination pastes in passive components, rising silver prices directly push up production costs for resistors and capacitors.


　　Demand-side uncertainties: AI and automotive electronics emerge as key drivers

　　Beyond cost factors, shifting demand dynamics are adding new variables to passive component pricing trends. Industry demand is rapidly migrating from traditional consumer electronics toward automotive electronics, AI servers, and edge AI devices. These applications demand higher reliability, precision, and miniaturization from components, which in turn places additional strain on high-end manufacturing capacity.

　　According to distributor analysis, if AI applications surge as expected in 2026 and continue absorbing high-end capacity from major manufacturers like Murata and Samsung, the passive component market could face structural supply tightness, potentially prolonging the current price hike trend. Particularly in segments such as high-capacitance automotive-grade MLCCs and high-performance inductors, supply-demand imbalances may become more pronounced.

　　However, industry inventory levels have entered a relatively stable phase. According to a research report by Guoyuan Securities, MLCC inventories have significantly declined from their peaks in 2022–2023 and have remained at reasonable levels since 2024. This provides a certain market foundation for price adjustments but also means downstream manufacturers must respond more flexibly to supply fluctuations.


　　Supply chain response: Diversified sourcing and collaboration with specialized platforms become trends

　　Faced with ongoing price volatility and delivery uncertainties, downstream electronics manufacturers are actively adjusting procurement strategies to strengthen supply chain resilience. An increasing number of companies are prioritizing supplier diversification—avoiding overreliance on a single brand or channel—and enhancing collaboration with specialized component supply platforms to improve market responsiveness and cost control.

　　In this context, platforms like IC-Deal (Baineng Yunxin), which specialize in electronic component supply chain services, are gaining greater relevance. By integrating industry resources and providing real-time pricing and inventory data, such platforms help procurement teams quickly compare prices, secure stock, and optimize purchasing timing—thereby reducing operational risks from sudden market price swings. Especially during periods of price volatility, professional supply chain partners not only offer stable alternative solutions but also assist enterprises in forecasting trends through data analytics, enabling more forward-looking inventory decisions.

　　Meanwhile, many companies are also mitigating cost pressures through design optimization, material substitution, and refined inventory management. Strengthening long-term collaboration with original equipment manufacturers (OEMs) and distribution channels and establishing flexible procurement mechanisms are becoming industry consensus approaches to managing cyclical fluctuations.


　　Outlook: Industry moves toward high-end development; supply chains must become more resilient

　　Overall, the current wave of passive component price increases is driven by both rising raw material costs and growing demand for high-end products. Prices are expected to remain volatile at elevated levels in the near term. With continued growth in 5G communications, new energy vehicles, and AI computing, market demands for performance, reliability, and integration density of passive components will keep rising—further propelling the industry toward high-end, specialized development.

　　For procurement professionals, building agile, diversified, and digitalized supply chain systems is no longer optional—it is essential. By deepening collaboration with specialized platforms like IC-Deal (Baineng Yunxin), enterprises can not only streamline component procurement but also access value-added services such as market intelligence and risk management, thereby maintaining competitiveness in a dynamic market.

　　Going forward, the passive component industry will continue evolving amid the interplay of costs, technology, and demand. Only those companies capable of swiftly adapting to change and optimizing supply chain collaboration mechanisms will be able to seize opportunities amid volatility and achieve stable operations and long-term growth.

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