Company Reports

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitors, or MLCCs, by revenue. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electrical current, to enable wireless communication, and to remove electromagnetic noise.

Taiyo Yuden's first-quarter revenue rose 11% year-on-year, and operating income increased 53%, supported by strong sales of passive components for AI servers. The company raised its fiscal 2026 full-year revenue and operating income guidance by 10% and 50%, respectively.

After follow-up meetings held after the March-quarter results, we revisited our view on artificial intelligence data center demand and updated our earnings forecasts and fair value estimates for Murata Manufacturing, Samsung Electro-Mechanics, Yageo, Taiyo Yuden, and TDK.

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitors, or MLCCs, by revenue. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electrical current, to enable wireless communication, and to remove electromagnetic noise.

Taiyo Yuden reported book/bill ratio for multilayer ceramic capacitors of 1.3 in the March quarter, signaling a clear recovery trend. Building on this momentum, the company guides 8% revenue growth and 50% operating income growth for fiscal 2026. The company also unveiled a new medium-term plan.

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitors, or MLCCs, by revenue. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electrical current, to enable wireless communication, and to remove electromagnetic noise.

Following meetings with companies regarding December-quarter results, we revised our earnings forecasts and fair value estimates for passive component suppliers Murata Manufacturing, Samsung Electro-Mechanics, or Semco, TDK, and Taiyo Yuden.

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitor, or MLCCs. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electric flow, to enable wireless communication, and to remove electromagnetic noise. While we acknowledge that shipments of digital appliances are slowing down, we think progress in telecommunication standards—such as 3G, LTE, LTE advanced, and 5G—and increased electronic devices in automobiles will drive the continued expansion of the component market.

Taiyo Yuden's sales for the December quarter increased 2% year over year, with weakness in telecom devices partially offsetting the solid recovery in multilayer ceramic capacitors. The operating margin of 8.5%, the highest in three years, was driven by improved MLCC capacity utilization.

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitor, or MLCCs. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electric flow, to enable wireless communication, and to remove electromagnetic noise. While we acknowledge that shipments of digital appliances are slowing down, we think progress in telecommunication standards—such as 3G, LTE, LTE advanced, and 5G—and increased electronic devices in automobiles will drive the continued expansion of the component market.

Despite the yen's appreciation, Taiyo Yuden's revenue and operating income for the September quarter were up 7% and 19% year on year, respectively. The company raised its operating income guidance for fiscal 2025 (ending March 2026) to JPY 18 billion from JPY 16 billion.

Taiyo Yuden's June-quarter sales decreased 2.2% sequentially due to the appreciation of the Japanese yen. However, the operating margin improved to 3.7% from 2.4% as capacity utilization increased. The company guides for 9% sequential revenue growth in the September quarter.

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitor, or MLCCs. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electric flow, to enable wireless communication, and to remove electromagnetic noise. While we acknowledge that shipments of digital appliances are slowing down, we think progress in telecommunication standards—such as 3G, LTE, LTE advanced, and 5G—and increased electronic devices in automobiles will drive the continued expansion of the component market.

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitor, or MLCCs. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electric flow, to enable wireless communication, and to remove electromagnetic noise. While we acknowledge that shipments of digital appliances are slowing down, we think progress in telecommunication standards—such as 3G, LTE, LTE advanced, and 5G—and increased electronic devices in automobiles will drive the continued expansion of the component market.

For fiscal 2025 (ending March 2026), Taiyo Yuden guides sales to be flat year on year due to the appreciation of the Japanese yen, and operating income to increase 53% due to better utilization of multilayer ceramic capacitors and restructuring in the telecom device business.

Taiyo Yuden's December-quarter operating income was JPY 0.8 billion, down from JPY 4.9 billion in the previous quarter due to lower utilization and inventory provisions. Meanwhile, the firm raised its fiscal 2024 (ending March 2025) operating income guidance to JPY 10 billion from JPY 7.6 billion.

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitor, or MLCCs, and bandpass filters. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electric flow, to enable wireless communication, and to remove electromagnetic noise. While we acknowledge that shipments of digital appliances are slowing down, we think progress in telecommunication standards—such as 3G, LTE, LTE advanced, and 5G—and increased electronic devices in automobiles will drive the continued expansion of the component market.

Following disappointing September-quarter results and discussions with the company, we have updated our earnings forecasts for Taiyo Yuden.

Taiyo Yuden is one of the top suppliers of passive components, with the third-largest market share in multilayer ceramic capacitor, or MLCCs, and bandpass filters. Passive components are necessary for all electronic circuits. They are used to store electricity, to control electric flow, to enable wireless communication, and to remove electromagnetic noise. While we acknowledge that shipments of digital appliances are slowing down, we think progress in telecommunication standards—such as 3G, LTE, LTE advanced, and 5G—and increased electronic devices in automobiles will drive the continued expansion of the component market.

Narrow-moat Taiyo Yuden’s operating income for the June quarter was JPY 2.6 billion, lower than our forecast of JPY 3.5 billion. While demand for PCs and information infrastructure such as servers recovered as expected, the company’s profitability was lower than expected for the following two reasons: 1) due to the stagnant orders from Chinese smartphone manufacturers, the utilization rate of multilayer ceramic capacitors was not as high as expected, and sales of telecom devices declined year on year; and 2) fixed costs were higher than we had expected as a result of aggressive capital investment in MLCCs over the past two years to meet long-term demand growth. It is disappointing that the 3.2% operating margin in the June quarter is significantly lower than the 16.1% two years ago, implying that the margin recovery is slower than expected.