Why it matters: Chips are the stars of the show whenever a new CPU, GPU, or mobile device is announced, but there is a component that is equally important but usually overlooked unless there's a shortage threatening to cause production issues. That component is the humble capacitor, which is used in almost every single device powered by electricity.
The shortage of everything from advanced chips to the lowly $1 display driver chips that power almost every digital device we use has caused a great deal of grief in the tech and auto industries. It looks like it's about to get worse as Covid-19 infections are threatening production of even more basic electronic components found in every single electronic device.
According to a Wall Street Journal report, capacitors are the latest electronic component where the supply is running low while demand grows stronger than ever. Specifically, this is about multilayer ceramic capacitors (MLCCs), which are used in many different applications, especially high-density printed circuit boards. The tiny components under a desktop CPU or on the cutout on the backside of a graphics card are MLCCs, whose role is to ensure steady voltage during power usage spikes.
In other words, MLCCs are the "workhorses" of the electronic component industry, and they're vital for the stable operation of everything from wearables, phones, tablets, consoles, PC components, servers, electric cars, and pretty much anything else powered by electricity.
Back in June, lockdowns in Malaysia and the Philippines were already causing a great deal of concern about the potential effects on the already tight supply of MLCC. Over the past few weeks, companies like Murata and Samsung, who are the largest manufacturers of these components, have warned that their production capacities and shipment schedules for high-end MLCCs could be severely affected if regional lockdowns continue.