Introduction

In recent years, SMD aluminum electrolytic capacitors, as key components in electronic equipment, have seen a continuous upward trend in their market prices. This phenomenon results from a combination of factors involving raw material supply, environmental policies, shifts in market demand, and more. This article systematically analyzes the specific reasons for the current overall price increase of SMD aluminum electrolytic capacitors, providing a reference for industry participants and related investors.

1 Continuous Rise in Raw Material Costs

The manufacturing of SMD aluminum electrolytic capacitors heavily relies on specific raw materials, the prices of which have surged significantly in recent years, becoming the primary factor driving up capacitor prices.

Cost Pressure from Electrode Foil. Electrode foil is a critical foundational material for producing aluminum electrolytic capacitors, used to carry charge and accounting for 40%-60% of the production cost of aluminum electrolytic capacitors. In recent years, electrode foil prices have continued to rise, with another 8% to 10% increase in April 2025, bringing the cumulative increase to over 30%. This is mainly because the aluminum industry, being energy-intensive and high-polluting, has seen a significant reduction in aluminum foil supply amid increasingly stringent environmental policies.

Compound Impact of Aluminum Prices and Electricity Costs. Looking at the cost structure of aluminum electrolytic capacitors, aluminum foil and electricity costs together account for over 50%. Aluminum prices have been steadily rising, with the main contract increasing from 15,000 yuan/ton at the beginning of 2022 to 24,000 yuan/ton. Simultaneously, electricity price hikes have directly pushed up production costs, especially since electricity constitutes 60-70% of the cost for formed foil. This dual increase in aluminum and electricity prices is directly transmitted to the production costs of aluminum electrolytic capacitors.

Widespread Price Increases for Auxiliary Materials. Besides the core electrode foil material, the production of aluminum electrolytic capacitors requires various auxiliary materials such as aluminum cases, leads, electrolytic paper, and rubber plugs. Against the backdrop of generally rising global commodity prices, the prices of these auxiliary materials have also followed an upward trend, further exacerbating the cost pressure on capacitors.

2 Environmental Policies and Supply Chain Adjustments

Increasingly stringent environmental policies have profoundly impacted the supply chain of SMD aluminum electrolytic capacitors, particularly imposing significant constraints on the raw material supply环节.

Supply Reduction Due to Environmental Policies. Since the implementation of strict environmental policies in early 2017, raw material suppliers for aluminum electrolytic capacitors have faced challenges such as rectification, production reduction, or even shutdowns. Environmental issues unresolved in regions like Xinjiang, Nantong, Sichuan, Guangxi, and Inner Mongolia have directly affected aluminum foil supply. While beneficial for healthy industry development in the long term, these environmental measures have indeed created a tight supply situation for aluminum foil in the short term.

Increased Environmental Compliance Costs. To meet environmental requirements, companies need to invest substantial funds in upgrading environmental treatment facilities. For instance, Guodong Electronics invested significantly in upgrading environmental facilities, leading to a notable increase in their environmental operating costs. These additional environmental costs are ultimately reflected in product prices.

Regional Supply Chain Restructuring. Under environmental pressure, many manufacturers have shifted production bases to Japan and the United States, but production costs remain high. Additionally, global trade frictions and pandemic disruptions have prompted countries to emphasize "independent and controllable" supply chains, potentially leading to duplicate construction and efficiency losses, which to some extent increase overall costs.

3 Structural Growth in Market Demand

In contrast to the contraction on the supply side, the demand side for SMD aluminum electrolytic capacitors shows a trend of structural growth. Supply-demand imbalance has become a significant driver of price increases.

Explosive Demand from New Energy Vehicles. Vehicle electrification and intelligence have led to exponential growth in demand for high-reliability, high-temperature-resistant capacitors. A traditional car uses about 3,000 MLCCs, while a high-end electric vehicle might require over 20,000. The capacitor usage per vehicle is expected to increase from about 350 units in 2023 to over 500 units by 2026, with the value per vehicle rising to 80-120 RMB.

Strong Pull from the New Energy Industry. Fields like photovoltaic inverters and wind turbine converters require a large number of high-voltage, high-capacitance film and aluminum electrolytic capacitors. Capacitors are core basic components of inverters; DC-LINK bus capacitors are heavily used on the DC side, and filtering capacitors are needed on the AC side, further boosting demand for aluminum electrolytic capacitors. The demand share from the new energy sector reached 18% in 2023 and is expected to rise to 25% by 2026.

Expansion into New Application Areas. The proliferation of 5G technology has driven demand for high-frequency, high-Q, small-size capacitors in 5G base stations, smartphones, servers, and network equipment. Furthermore, the vast number of devices in the IoT and AIoT sectors, from smart homes to industrial IoT, each node requires capacitors. The rapid development of these emerging applications creates new market space for aluminum electrolytic capacitors.

Table: Demand Growth in Major Application Areas for SMD Aluminum Electrolytic Capacitors

Source: Based on search result analysis

4 Rising Energy and Logistics Costs

The global surge in energy and logistics costs has further exacerbated production cost pressures for SMD aluminum electrolytic capacitors.

High Energy Costs. Capacitor production, especially processes like sintering (MLCC) and etching/forming (aluminum foil), are energy-intensive. High global energy prices directly push up manufacturing costs, impacting the energy-intensive electrode foil production process particularly significantly.

Rising Logistics Costs. Capacitor manufacturers and electroplating semi-finished product producers are often not in the same location, so transportation costs also impact the cost structure of aluminum capacitors. Global shipping and air freight costs, although retreated from pandemic peaks, remain relatively high, adding to the comprehensive cost of products.

Increasing Labor Costs. In regions concentrated with manufacturing industries, labor costs rise yearly, forming additional cost pressures for the capacitor production process, which requires a significant workforce.

5 Technological Upgrades and Industry Transformation

Technological upgrades and industry transformation within the SMD aluminum electrolytic capacitor sector have also contributed to rising product prices.

Costs of Technological Upgrades. Breakthroughs in high-frequency, low-impedance technologies are a core development direction. Improving anode oxidation processes, optimizing electrolyte formulas, and package structures enhance product performance but also increase R&D and production costs. Miniaturization and high capacitance-to-volume ratio requirements demand more precise manufacturing processes and stricter quality control, leading to yield challenges and cost increases.

High-End Product Structure Shift. As electronics move upmarket, requirements for aluminum electrolytic capacitors have increased. Technological innovations like high-frequency low impedance, solid-state, and miniaturization enhance product premium pricing ability but also push up the average price of products.

Transition to Eco-Friendly Products. With growing global environmental awareness, lead-free, halogen-free green products are becoming mainstream. Meeting environmental requirements requires new materials and processes, increasing production costs in the short term.

6 Changes in Industry Competitive Landscape

Shifts in the competitive landscape of the SMD aluminum electrolytic capacitor industry have also significantly influenced product prices.

Increased Production Capacity Concentration. China's SMD aluminum electrolytic capacitor industry shows a pattern of "top-heavy, small and medium-sized fragmentation," with the top 5 enterprises holding a combined market share of 42%. This increased concentration gives leading companies stronger pricing power, allowing them to pass on cost pressures through price hikes.

Strategic Adjustments by Japanese Manufacturers. Japanese manufacturers like Nippon Chemi-Con and Rubycon still hold technological advantages in the high-end market. However, affected by geopolitical factors and cost pressures, they have become cautious about expanding capacity in China. Their overall market share has dropped from 28% in 2018 to about 16% in 2024. This strategic adjustment has created market space for domestic manufacturers but also altered the competitive landscape.

Accelerated Domestic Substitution. Local enterprises already hold over 60% market share in the industrial control market and are gradually penetrating high-end servo and robot control systems. This acceleration in domestic substitution gives leading domestic companies strong bargaining power, allowing them to adjust product prices based on cost changes.

Table: Market Position and Strategies of Major Enterprises in the SMD Aluminum Electrolytic Capacitor Industry

7 Conclusion and Outlook

The price increase of SMD aluminum electrolytic capacitors results from a combination of multiple factors. From rising raw material costs and environmental policy pressures to growing market demand, increasing energy and logistics costs, technological upgrades, and changes in the industry landscape, various factors are intertwined, collectively driving the current wave of price hikes.

Looking ahead, the price trend of SMD aluminum electrolytic capacitors will depend on the evolution of various factors. On the one hand, with the gradual expansion of industry capacity and continuous technological progress, some cost pressures may ease. On the other hand, sustained demand growth from new energy sources and new energy vehicles may continue to support price levels. The product price structure is expected to see differentiated trends: prices for high-end, high-reliability products (industrial grade, automotive grade) may remain firm or even rise slightly due to strong demand and technological barriers, while prices for standard consumer-grade products might experience fluctuations or slight declines as capacity is released and competition intensifies.

For companies in the industry, they should cope with price fluctuations by establishing long-term strategic partnerships with suppliers, optimizing design, and strengthening supply chain management. Meanwhile, increasing investment in R&D to enhance product value-added and moving towards high-end and differentiated development are crucial for maintaining competitiveness in a changing market environment.

Overall, the price increase in the SMD aluminum electrolytic capacitor market has shifted from past cyclical fluctuations to a long-term trend driven by structural demand. Industry participants need to adapt to this new normal, addressing cost pressures through innovation and efficiency improvements to achieve sustainable development.