AI demand stands out, and consumer electronics face tariff headwinds; 2H25 MLCC peak season at risk

The U.S. government plans to impose steep retaliatory tariffs starting August 1st, including up to 30% on imports from Mexico, 15% on the EU, and 15–36% on key tech hubs in Asia such as Japan, South Korea, Thailand, and Malaysia.

With U.S. consumer spending growth revised down to just 0.5% in Q1—the lowest since the pandemic—TrendForce notes that the effects of front-loaded demand and stockpiling ahead of tariffs are fading. This casts uncertainty over the traditional back-to-school peak season in Q3, with MLCC order momentum clouded as a result.

TrendForce projects that the second half of 2025 is expected to see a clear split in demand. Orders for mid- to low-end consumer electronics like smartphones, notebooks, and tablets are projected to remain flat or grow just around 5% in Q3, as ODMs take a more conservative approach and avoid traditional peak-season strategies. Many vendors also rushed shipments in 1H25 to avoid tariffs, effectively cannibalizing demand from the latter half of the year. 

In contrast, AI server demand remains red-hot. Major ODMs like Foxconn, Quanta, and Wistron saw a boost in May and June revenues with NVIDIA’s GB200 and GB300 platforms both ramping up shipments in Q3. MLCC stocking demand has jumped nearly 25% QoQ, especially for mid- and high-end consumer-grade MLCCs, benefiting suppliers such as Murata, Samsung, and Taiyo Yuden.

Polarization in utilization rates makes capacity and inventory management critical
The disparity in market demand has led to significant differences in MLCC supplier utilization rates. TrendForce’s July survey shows that Japanese and Korean suppliers focusing on high-end AI applications are operating at around 90% capacity.

Chinese suppliers are at approximately 75%, while Taiwanese firms have dropped to around 60%. This reflects widespread caution within the supply chain, with strict control over both capacity and inventory in response to market uncertainties.

Amid mounting tariff pressure, MLCC suppliers are accelerating the setup of backend testing and packaging lines in Southeast Asia to enable localized production and mitigate the risk of punitive U.S. tariffs targeting origin mislabeling. TrendForce expects that under sweeping retaliatory tariffs, OEMs will be forced to restructure bids and spread the tariff burden across the supply chain, including materials providers, ODMs, logistics firms, advertising partners, and distributors. 

Ultimately, this could result in higher end-product prices. As OEMs begin releasing 2026 RFQs for smartphones and notebooks in the second half of the year, the entire supply chain is bracing for intense tariff-related cost pressure and further margin compression.

Source: TrendForce, Taiwan.