Meritz Securities Korea comment on the SoCAMM2 rumor:
Hello, this is Sunwoo Kim and Seungsoo Yang from Meritz Securities.
We are sharing our comment on the capacity adjustment of NVIDIA NVL72 LPDDR5X SoCAMM2 modules.
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SoCAMM2 modules: Total demand is actually increasing
A correction based on misunderstanding is an opportunity
Market concerns are emerging over the reduction in LPDDR5X SoCAMM2 module capacity for NVIDIA NVL72, from 192GB to 96GB.
However, this is merely noise that occasionally occurs when stock prices lead during a DRAM upcycle. Investors should keep in mind that the DRAM upcycle has still not even reached the mid-cycle stage.
We continue to recommend that investors should only start reducing memory exposure from the “shoulder” of the industry cycle. The current level is still merely around the “thigh” of the cycle.
According to our channel checks in Taiwan and Korea, NVIDIA has recently changed the shipment mix of SoCAMM2 modules, while actually increasing total order volumes.
While 192GB modules are being cut by half, 96GB modules are instead increasing by nearly sixfold and becoming the mainstream product. 64GB modules are also increasing by 50%. This appears to be NVIDIA’s pragmatic workaround to prioritize expanding Vera Rubin system shipments amid tight memory supply.
As a result, total SoCAMM2 LPDDR demand is expected to increase by 10–20% compared with the previous forecast.
Moreover, since Vera Rubin systems can be upgraded to higher-capacity modules at any time after initial shipments, this should be interpreted as a positive event that expands the medium- to long-term memory demand ceiling.
For SoCAMM2 module component, materials, and back-end process suppliers, the shift toward higher shipments of lower-capacity products is expected to lead to a sharp upward revision in 2026E/2027E shipment volumes.
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Value chain check
According to our channel checks, there appears to be no component- or materials-level design change to SoCAMM2 modules resulting from this capacity adjustment.
In other words, although memory capacity per module is being lowered, there is no major change in substrate specifications, key material composition, or back-end process complexity. Therefore, the related value chain should fully benefit from the increase in shipment volume.
Rather, in the next-generation products, we expect an increase in substrate layer count, more advanced stack structures, and broader adoption of low-loss materials in order to support high-speed signaling and ensure power integrity.
Therefore, this adjustment should be interpreted as a double positive: in the near term, it expands SoCAMM2 module shipments; and in the medium to long term, it drives higher-value substrate and materials specifications.
What's happening in the MLCC market
First off, MLCC as a whole is a $15B market. MLCCs for servers were a $1.3B market in 2025 ($600m for AI servers, $700m for general servers)
The AI server MLCC market is growing at 80%+ CAGR, and the general server MLCC market will also accelerate due to agentic AI increasing CPU demand (around 30%-40% CAGR)
We will see negative growth in the smartphone/mobile MLCC market for at least 2026-27.
Humanoids are another future high-growth market for MLCCs
Book-to-bill ratio for most MLCC suppliers is over 1 now
Reasons for price hikes-
High Nickel & Silver are affecting all segments
There is a supply-demand mismatch in the high-end (high capacitance, high voltage) segment, which is used in autos & servers
High-end MLCC lead time is over 20 weeks
Spot/distributor prices have increased by 20%-40% for low capacitance & consumer device MLCCs due to hoarding and double booking, especially in China
OEM contracts have not seen large price hikes yet
What's happening now:
Rapid capacity expansion happening across the industry
Murata expects blended ASP prices to remain flat (ASP going down in consumer electronics, expansion in AI server market)
Tier 1 players like Murata, Taiyo Yuden, SEMCO building capacity to serve AI server MLCC market
This will create opportunities for Tier 2/3 and Chinese suppliers to expand in the mid to low end market (Macronix effect)
Future:
MLCC production equiment & raw materials suppliers will be the biggest beneficiary of this CAPEX boom
MLCC producer stocks have performed well, and it is finally spilling to raw material/equipment producers
I expect them to outperform MLCC producers now