Passive components: Assess fundamental strength/weakness; Buy on TDK, Murata

Research evidence excerpt

Passive components: Assess fundamental strength/weakness; Buy on TDK, Murata

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Component Signals

Passive components: Assess fundamental

strength/weakness; Buy on TDK, Murata

Price Objective Change

19 June 2026

Assess fundamental strength/weakness in passive market Equity

Against the backdrop of AI server market expansion, expectations for medium-term and Japan

long-term demand growth for passive components such as multilayer ceramic capacitors Electronics

(MLCCs) and inductors are rising. Shares of major passive component makers including

Murata Mfg (6981) and TDK (6762) have already risen significantly. In addition to these MasashiResearch AnalystKubota >>

major makers, shares of aluminum electrolytic capacitor makers Nichicon (6996) and BofAS Japan

+81 3 6225 7138

Nippon Chemi-Con (6997), as well as crystal device maker NDK (6779), have also posted masashi.kubota@bofa.com

substantial gains. However, current share price appreciation appears to reflect Hazel Xue >>

unfounded speculation regarding product price increases driven by tightening supply and Research Analyst

BofAS Japan

demand conditions. Therefore, when selecting investment candidates, we think it is hazel.xue@bofa.com

necessary to carefully assess the underlying strength and weakness of actual

fundamentals.

Continue to prefer Murata Mfg (6981) and TDK (6762)

Within the passive component space, we continue to prefer Murata Mfg and TDK. We Exhibit 1: Reiterate Buy on Murata Mfg

expect Murata Mfg to continue gaining share in the market for compact high and TDK

capacitance MLCCs for AI servers, supported by its strong technological capabilities and Stocks mentioned in this report

high profitability. The share price is also increasingly reflecting the benefits of yen PO Price

depreciation.