Taiyo Yuden Co Ltd (6976) - Comprehensive analysis
We maintain our outlook that the supply and demand for multilayer ceramic capacitors (MLCCs) will remain strong and tighten, driven by the recovery in smartphone production and increased content in automotive applications. While we consider all passive component suppliers in our coverage to be undervalued, we believe that shares of narrow-moat Taiyo Yuden present the best opportunity for accumulation. Although we recognize the risks posed by the Russia-Ukraine conflict and the ongoing chip shortage, we anticipate sustained robust demand for high-end MLCCs in the long term. There will be a need for smaller sizes and larger capacities for MLCCs used in smartphones, while automotive MLCCs will require larger capacities, higher reliability, and greater breakdown voltage. We believe Taiyo Yuden will be well-positioned to benefit from this trend.
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