Nomura expects demand for multilayer ceramic capacitor release films to grow at an annual rate of about 10% from 2025 to 2028, as artificial intelligence server production drives heavier use of high-end electronic components and tighter quality requirements across the supply chain.
The brokerage placed a buy rating on Lintec and set a target price of 7,850 yen, saying the Japanese materials company is well positioned to benefit from rising demand for advanced release films used in multilayer ceramic capacitors, or MLCCs. Lintec shares were recently trading near 7,110 yen, according to Nomura’s analysis.
MLCC release films are a small but increasingly important part of the electronics materials market. They are used in the production of ceramic capacitors, which help regulate power and current in servers, power circuits, automotive electronics and consumer devices. In AI servers, where processing loads are far higher than in conventional servers, the number and complexity of MLCCs have increased sharply.
Nomura said the growth of AI computing capacity is lifting demand not only for more MLCCs, but also for higher-performance MLCCs with more layers. That has raised the required standards for release films, especially in surface smoothness, cleanliness and coating precision. These requirements favor suppliers with advanced coating technologies and strong quality controls.
Japanese manufacturers dominate this niche. Nomura estimates they control more than 80% of the global MLCC release film market. Lintec holds about 37% of global share, followed by Toyobo at roughly 32%. Mitsui Chemicals accounts for about 12%, while other producers together make up the remaining 19%. Toray is a key player upstream, controlling more than half of the base film market used in release films.
The market’s concentrated structure means that capacity decisions by a small number of Japanese companies could have a large effect on availability, pricing and profit margins over the next several years.
AI servers are reshaping component demand
The growth in MLCC release films is being driven by a larger change in the technology hardware market. AI servers require far more power management, higher reliability and denser circuitry than traditional servers. That pushes up demand for MLCCs, which are used extensively throughout server boards and power systems.
A single AI server can require as many as 28,000 MLCCs, according to industry estimates cited in the market discussion, nearly 13 times the number used in a conventional server. This difference has created a sharp increase in demand for high-capacitance, high-reliability MLCCs.
The broader AI server market is expected to expand rapidly. Forecasts cited in the report suggest the global AI server market could rise from about $262 billion in 2026 to more than $2.8 trillion by 2034, implying a compound annual growth rate of more than 34%. While estimates vary across research firms, the direction is clear: AI infrastructure is becoming one of the most powerful sources of demand in the electronics supply chain.
That growth is filtering into materials markets that normally receive far less attention than chips, processors or memory. Release films are one example. Although they are not visible in finished products, they are essential to the manufacturing process for MLCCs. As capacitor designs become thinner, denser and more layered, the film materials used during production must meet stricter specifications.
Nomura’s 10% annual growth forecast for MLCC release film demand from 2025 to 2028 reflects this shift. Longer-term market estimates point to continued expansion as well, with the MLCC release film market projected by some industry observers to grow at a compound annual rate of about 7%, from roughly $2.8 billion in 2025 to around $4.5 billion by 2033.
Why release films matter
MLCCs are made by building up many thin ceramic layers with internal electrodes. Release films are used during this process to support and separate extremely thin ceramic sheets before they are stacked, pressed, cut and fired.
As MLCCs move toward more layers and smaller dimensions, defects in the release film can affect yield and reliability. Surface roughness, contamination and poor coating uniformity can create problems in the ceramic layers. For high-end MLCCs used in AI servers, these risks are especially important because failure rates must be extremely low.
This is why Nomura sees an advantage for companies such as Lintec, which focuses on advanced coating technology. Lintec sources base film from outside suppliers, applies proprietary release coatings, and sells the finished material to MLCC manufacturers. Its strength is in coating precision and process know-how rather than base film production.
Toyobo has a different model. It produces both the base film and the coating, giving it a more integrated structure. The company is expanding capacity, with a new facility expected to reach full operation around the third quarter of 2026. That project is one of the most closely watched developments in the sector because it could add meaningful supply at a time when demand is rising quickly.
Toray, meanwhile, is more important upstream. It has more than half of the release film base film market and plans to expand output by 1.6 times by early 2026 through its Gifu production line. Nomura said this added capacity could help reduce bottlenecks for downstream processors, including Lintec.
Lintec seen as key beneficiary
Nomura’s buy rating on Lintec reflects its view that the company will benefit from rising demand for high-end MLCC release films. The business is not Lintec’s largest by revenue, but it contributes disproportionately to profit.
Within Lintec, MLCC release film operations account for about 7% of sales and 17% of operating profit, according to Nomura. That profit contribution highlights the higher-margin nature of the business compared with some of the company’s other activities.
The brokerage forecasts a 2026 price-to-earnings ratio of 17.8 times for Lintec. Its target price of 7,850 yen implies confidence that earnings from advanced materials can continue to grow as AI server demand expands.
Still, Nomura also flagged a capacity risk. If Lintec does not expand production quickly enough, its facilities could reach full utilization by 2027. In that case, some orders may shift to Toyobo, especially once Toyobo’s new facility is running at full capacity.
That makes timing critical. Lintec may benefit from strong demand and high utilization in the near term, but limited capacity could cap growth if orders continue rising and customers seek alternative suppliers.
Toyobo’s expansion could change supply balance
Toyobo is the second-largest MLCC release film supplier, with about 32% market share. Nomura has a neutral stance on the company and a target price of 1,800 yen.
The company’s MLCC release film business accounts for around 6% of sales and 13% of operating profit. Like Lintec, the segment has a larger profit impact than its sales share suggests.
Toyobo’s new facility, expected to reach full operation around the third quarter of 2026, is central to the supply outlook. If demand grows near Nomura’s estimated 10% annual rate, the new capacity could be absorbed smoothly. That would allow Toyobo to increase sales without triggering major price pressure.
But if demand slows or if too much new supply enters the market at the same time, Toyobo could face lower utilization or weaker pricing. Nomura said maintaining steady demand growth will be essential for the company to avoid margin pressure after its capacity expansion.
The firm has already seen sales of MLCC release films expand, driven mainly by AI server-related demand, according to financial reports discussed in the market. This supports the case that the new facility is being added in response to real demand rather than speculative growth alone.
Toray’s role is upstream but important
Toray has a smaller direct profit exposure to MLCC release films than Lintec or Toyobo, but its role in base film production makes it important to the overall supply chain. Nomura has a neutral stance on Toray and a target price of 1,170 yen.
Toray’s comparable MLCC-related business represents about 1% of sales and 3% of operating profit. That makes the earnings impact more limited at the group level. However, because Toray controls more than half of the relevant base film market, its production expansion could affect the entire sector.
The planned 1.6-fold output increase at the Gifu production line by early 2026 could ease supply constraints for companies that rely on externally sourced base films. For Lintec, which buys base film and adds release coatings, Toray’s expansion may be particularly helpful.
If base film availability improves, downstream coating companies may be better able to respond to growing orders from MLCC producers. This could reduce the risk of severe shortages, although it may also soften pricing if supply catches up too quickly.
Pricing risk remains, but sharp declines look less likely
Nomura expects some risk of selling price declines in 2026 as Toyobo and Toray add capacity. New supply often creates pressure in materials markets, especially when customers anticipate more options and negotiate harder on price.
However, the brokerage does not expect a steep decline in prices under its main scenario. It said capacity expansion appears moderate relative to expected demand growth. If AI server production continues to rise and MLCC makers keep increasing orders, utilization rates should remain stable.
That view is important because the sector’s profitability depends not only on volume growth, but also on pricing discipline. High-end release films require advanced production processes, and suppliers must maintain quality while scaling output. If demand remains firm, producers may be able to protect margins even as capacity expands.
Recent conditions in the broader MLCC market suggest demand remains tight for high-end parts. Book-to-bill ratios for major Japanese and Korean suppliers, including Murata and Samsung, reached post-pandemic highs of around 1.30 and 1.31 by late June 2026, according to market data cited in the report. A book-to-bill ratio above 1 indicates orders are exceeding shipments.
Lead times for high-end components have reportedly stretched to 16 to 30 weeks. Spot prices for some high-demand MLCCs have doubled month over month, while the most constrained specifications have seen much sharper increases. These figures point to serious tightness in the high-end capacitor market, even as suppliers work to add capacity.
Crowding-out effects spread across electronics
The AI server boom is also creating side effects in other parts of the electronics market. As manufacturers prioritize high-margin AI-related orders, production capacity can be diverted away from components used in automotive systems, industrial equipment and consumer electronics.
This crowding-out effect can create shortages or price volatility outside the AI supply chain. Automakers and consumer electronics companies may face longer lead times for certain MLCCs if suppliers allocate more capacity to AI server customers.
For release film suppliers, the effect is more straightforward. Strong AI-related demand raises orders for advanced MLCC materials. But for the wider electronics market, the result can be uneven. Companies tied to the AI supply chain may see growth, while customers in less favored segments may face higher costs or delayed deliveries.
Traders watching the sector are therefore focusing on inventory levels, lead times and utilization rates. These indicators will show whether the supply gap is widening or whether new capacity from Toyobo, Toray and other producers is beginning to meet demand.
Market structure supports Japanese suppliers
The MLCC release film market is unusually concentrated, with Lintec and Toyobo together controlling nearly 70% of global share. This gives the two companies strong positions in a market where qualification, quality control and customer relationships are difficult to replicate quickly.
MLCC manufacturers typically require stable suppliers because release film quality affects production yields. Switching suppliers can involve testing, qualification and risk, especially for high-end applications. That creates barriers to entry for new competitors.
Japanese companies also benefit from their long history in precision films, coatings and electronic materials. Their dominance in MLCC release films reflects broader strengths in high-specification manufacturing, where process control and reliability matter as much as scale.
Still, concentration does not eliminate risk. If one supplier adds too much capacity, or if demand growth falls short of forecasts, pricing pressure could emerge. Conversely, if capacity additions are delayed, shortages may worsen and customers may seek backup suppliers more aggressively.
Outlook depends on timing and execution
Nomura’s central view is that AI server demand will continue to support growth in MLCC release films, with Lintec positioned as the most attractive stock among the major companies covered. The brokerage sees Toyobo and Toray more neutrally, reflecting both their exposure to demand growth and the risks tied to new capacity.
The key issue is synchronization. MLCC producers need more high-end materials as AI servers scale. Release film suppliers need to expand without overshooting demand. Base film producers such as Toray need to relieve bottlenecks without creating excess supply downstream.
If the timing works, Japanese suppliers could enjoy several years of steady volume growth and stable profitability. If it does not, the market could swing between shortages and price pressure.
For now, the direction of demand is clear. AI infrastructure is increasing the number, complexity and performance requirements of MLCCs. That is pushing a once-obscure materials segment into sharper focus.
Nomura said the earnings impact will depend on whether MLCC manufacturers continue scaling orders and whether Japanese suppliers can align capacity expansion with the new wave of demand. In a market dominated by a handful of companies, those decisions may determine not only profit growth, but also the stability of a critical supply chain for AI computing.
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