Tariff uncertainty and weakening demand threaten MLCC market stability

Despite a temporary 90-day grace period on reciprocal tariffs, the US trade stance continues to cast a shadow over global supply chains. TrendForce reports that while MLCC suppliers have not yet been directly targeted by tariffs, a growing climate of caution and risk aversion among businesses has already disrupted supply-demand dynamics during the first half of 2025. This raises concerns that the typical seasonal boost in the second half may fail to materialise.

The report 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. According to TrendForce, Q2 MLCC forecast orders from major clients such as Dell and HP are down 20–25% QoQ. Whether manufacturers will move part of their Q3 North American orders into Q2 in response to the temporary tariff suspension remains an open question.

In contrast, the AI server segment has shown relative stability, buoyed by steady order flows and inventory movements. ODMs operating in Mexico continue to ship under the terms of the US-Mexico-Canada Agreement (USMCA), though the threat of renewed tariff negotiations between the US and Mexico looms.

Uncertain demand outlook and limited room for supplier discounts

TrendForce also points to a deteriorating global economic environment that is compounding challenges for MLCC suppliers. With customer demand softening and sales costs rising, suppliers are facing increasing pressure from OEMs to revise order volumes and lower prices. However, the room for further discounts is narrowing rapidly.

"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," TrendForce writes in a press release