Prices Surge Daily! Capacitors Jump 2x-5x, High-Capacity Parts Hit Harder!
During the final week of May, the passive component market witnessed a sudden and aggressive surge. Price hike notifications continued to flood the industry, rumors circulated regarding order suspensions, and Goldman Sachs released a pivotal prediction identifying Multi-Layer Ceramic Capacitors (MLCCs) as the next potential supply chain bottleneck in the AI industry. The convergence of these forces pushed market sentiment regarding resistors and capacitors (R&C) to a fever pitch, with some veterans remarking that this rally is even more exaggerated than the massive price surge of 2018.
However, amidst this fervor, dissenting voices have emerged, pointing out a disconnect between skyrocketing prices and actual shipment volumes.
By reading this article, you will gain insight into: What is the current state of the R&C market? How did this wave of price increases originate? And what are the underlying driving forces?
01 What Exactly is Happening in the Market?
Suspension of Quotations
First, the suspension of quotations is a verified reality. Multiple chip distributors have confirmed that starting approximately last week, suppliers became increasingly reluctant to provide quotes.
Agents for passive component manufacturers explained that this reluctance stems primarily from manufacturers (OEMs) needing to adjust prices due to extreme market volatility. Consequently, they paused the acceptance of orders and provision of quotes, pending internal adjustments and realignment with the factory's new pricing structure. One distributor noted that they suspended order acceptance last Friday and expected to resume operations within the first two days of this week.
Market observers noted that last week's suspension primarily affected chip resistors, while the capacitor sector was characterized more by severe shortages. By the start of this week, however, resistor suppliers had gradually begun resuming order acceptance.
Explosive Price Increases
Concurrently, both resistors and capacitors have experienced explosive price growth.
Resistor Market Dynamics:
At the end of last year, domestic passive component manufacturers issued a dense wave of price increase letters, predominantly from resistor manufacturers. This led to a phenomenon in the spot market around the New Year where quotations were paused and prices surged.
Following the New Year holiday, overall resistor prices increased by approximately 10-20% compared to pre-holiday levels. The primary models affected included package sizes 0201 through 1206. Initially, quotations were chaotic, with different package sizes seeing hikes of a dozen percent, thirty percent, or even higher for niche or tight-supply models. However, after a week, price volatility narrowed, and the market gradually stabilized.
Fast-forwarding to the present, distributors indicated that resistor prices rose by another 10% just last week.
Capacitor Market Dynamics:
During the New Year price wave, the overall increase for capacitors was moderate. However, distributors noted that specific tight models, such as Polymer Tantalum capacitors and high-capacity/high-voltage ceramic capacitors, remained in short supply.
The upward trend for high-capacity capacitors has been relentless. After May, conventional capacitor commodity lines also began to show price increases. By the final two weeks of May, the momentum became staggering. In the last week of May alone, numerous distributors reported that capacitor prices were changing daily, with some doubling within a single day. Specific part numbers have jumped 2 to 5 times, with high-capacity parts seeing even greater spikes. Some distributors even noted that imported inventory is currently cheaper than domestic stock.
Simultaneously, industry analysts at ChipSync have observed that due to the rapid pace of price changes, few in the industry can currently articulate the precise magnitude of the capacitor price hikes during verification processes.
Divergence Between Spot Market and Official Channels
Overall, the "noise" and volume in the current spot market for capacitors appear significantly higher than for resistors, with much more exaggerated price gains.
However, sources close to authorized channels suggest that the actual price hikes from manufacturers and major authorized distributors are far less sensational. For the same components, major authorized agents have only increased quotes by about 15% compared to March levels. In stark contrast, the open spot market has seen prices double.
The Scarcity Factor
Beyond price, shortage is an unavoidable topic in this cycle. Distributors reported seeing large quantities listed on websites, only to find them unavailable upon inquiry—sellers claim the stock was immediately "swept" up by buyers. Others noted that the shortage is so severe that older inventory, such as "22+" (manufactured in 2022 or earlier) components, is being pulled out and sold.
Signs of Speculation
In such a frenetic market, some have detected unusual activity. Reports suggest that much of the current trading volume involves shuffling inventory between traders in the market, rather than fulfilling actual demand from end-users. One authorized agent noted that transaction volume with clients actually decreased in May compared to April.
In summary, while the current market for passive components is undeniably hot—some calling it more extreme than the 2018 boom—there is a lack of consensus. Due to the vast array of passive component categories and brands, individual perceptions of specific price ranges and magnitudes vary. Furthermore, given the current mania, subsequent developments require close observation.
02 From Price Letters to Suspended Orders: How Did the R&C Market Rally?
This wave of passive component price increases did not appear overnight; it has been building since the second half of 2025 and spreading to the present state.
A brief summary of the timeline:
- 2025 Q4:TaiQing (Taiwan) took the lead in November by raising prices for magnetic beads by over 15% and began production cuts. This was immediately followed in December by a wave of price increase letters from domestic Chinese manufacturers, including Fujie, Heketai, and Changlong Technology, focused on thick-film and chip resistors, with increases mostly ranging between 8% and 20%.
- 2026 Q1: The price hikes spread from small and medium-sized factories to industry leaders. Fenghua Advanced Technology, Walsin (Huaxinke), and Yageo (Guju) followed suit. Notably, Yageo implemented a direct 15-20% price increase on chip resistors in February.
- Q2 Entry: Japanese and Korean giants officially entered the fray. Murata raised prices for AI server and high-end automotive MLCCs by 15-35% in April. Samsung Electro-Mechanics (SEM) increased prices for its full MLCC series by 5-10% in April. Taiyo Yuden raised prices for multiple product lines in May, and Yageo-Kemet began another round of increases in June, bringing the cumulative increase since last year to 65%.
AI Demand and Gold Rush Speculation:
Overall, the pricing wave moved from domestic SMEs to industry leaders, then to Japanese and Korean giants, spreading from resistors and magnetic beads to MLCCs.
However, the catalyst that pushed R&C components into the eye of the storm was likely not just the price increase letters themselves, but the recent rumors regarding the suspension or delay of order acceptance. This was the direct trigger for the current market explosion.
On May 27 (last Wednesday), the Commercial Times reported that Fenghua had comprehensively suspended accepting new orders from domestic agents for 0402 and 0603 chip resistors and MLCCs. This news instantly ignited market sentiment. However, Fenghua subsequently released a clarification on June 1: the report of a full suspension was untrue. In reality, only partial products were paused, and by the time of the announcement, acceptance had resumed. The pause was attributed to digital system upgrades and product structural adjustments.
By May 29, the market began to see a wider spread of order suspensions. According to current intelligence, these rumors likely originated from agents.
The groundwork laid by price increase letters, combined with rumors of order stoppages meeting a market eager for movement and speculative sentiment, caused the spark of price hikes to spread instantly like wildfire.
Upon closer examination, the price increases in resistors and capacitors have distinct underlying causes.
The Resistor Cost Crisis
For resistors, the primary pressure comes from raw material costs. Silver paste is the core material for resistors, inductors, and magnetic beads. The explosion in silver prices served as the direct fuse.
According to data from the Taiwan Economic Journal (TEJ), the London Silver Fix price surged from $36.2 per ounce in July 2025 to $103.2 in January 2026, an increase of nearly 185% in half a year. Given that silver paste accounts for over 50% of the material cost of multilayer inductors and magnetic beads, the cost pressure on resistors and inductors is imaginable. Copper prices followed a similar trajectory, rising from an average of $9,000 per ton in 2024 to $13,370, a 49% increase.
When costs became unsustainable, production cuts followed. Starting last December, some second-tier resistor manufacturers, such as Fujie Electronics, began reducing production to minimize losses.
The MLCC AI Divergence
The pricing path for MLCCs is more complex as it involves the massive variable of Artificial Intelligence (AI).
In the New Year wave, overall MLCC prices did not rise significantly; only specific tight models like Polymer Tantalum and high-capacity/high-voltage ceramics saw notable gains. However, starting in May, conventional MLCCs began to rise universally. This is likely driven by three main factors:
Reduced Arrivals at Distributors: Several agents reported a noticeable reduction in arrival volumes over recent months.
Capacity Migration to High-End (AI Effect): Major Japanese and Korean manufacturers are shifting capacity toward high-end applications. According to the latest survey by TrendForce, robust demand for AI chips has caused a tightening in the supply of high-end MLCCs. Consequently, the supply elasticity for consumer-grade MLCCs has weakened. This shift prompted some agents to engage in preventive hoarding, to which suppliers responded by adjusting prices.
Strategic Reallocation: The industry is witnessing a strategic pivot where legacy manufacturing lines are being repurposed to support the AI infrastructure build-out, creating a artificial scarcity in the general market that fuels panic buying.
