TDK and Taiyo Yuden signed a memorandum of understanding on 29 September to explore joint development of two types of electronic components for AI systems — multilayer ceramic capacitors and inductors — according to TDK’s announcement.
Key points
- The memorandum starts discussions on joint development of capacitors and inductors, alongside possible manufacturing and procurement cooperation.
- TDK says the companies will consider a future capital alliance as they work out their respective roles.
- They are also considering a joint supply plan and applications to Japan’s Ministry of Economy, Trade and Industry.
TDK and Taiyo Yuden target power components
The proposed collaboration covers multilayer ceramic capacitors, known as MLCCs, and inductors. TDK says the companies intend to examine cooperation in manufacturing and procurement as well as product development. It describes the agreement as the start of discussions over the scope of that work and how the two manufacturers would divide responsibility.
TDK attributes the initiative to demand for components used in AI data centres, AI servers and physical AI applications. It says higher-performance systems need high-capacitance, highly reliable MLCCs and inductors for power supply stabilisation and noise suppression. The company also points to rising global demand for the semiconductors and chipsets used in those systems.
The partners say they want to serve customers worldwide and expand their respective electronic-component businesses. Their proposed work covers production and purchasing as well as design, putting several parts of the component supply chain within the scope of the talks. TDK says it also wants the collaboration to strengthen Japan’s industrial base and supply resilience.
Nikkei Asia described the partnership as an effort to compete with Chinese rivals and reported that growing demand for AI-related components, including capacitors, was driving growth at both companies. The memorandum concerns discussions on a possible alliance, while the specific areas of cooperation and allocation of responsibilities remain matters for those talks, according to TDK.
A capital alliance remains under consideration
TDK says the companies will consider a future capital alliance while discussing their proposed business partnership. Its description of the existing relationship lists no capital, personnel or business ties between them. A capital arrangement would therefore be a separate step from the memorandum signed on 29 September.
The prospective partner is a sizeable manufacturer in its own right. Taiyo Yuden develops, produces and sells electronic components, according to TDK’s account of the company. TDK identifies Katsuya Sase as Taiyo Yuden’s Representative Director, President and CEO, and puts its share capital at 33,575 million JPY as of 31 March 2026.
TDK posted total sales of USD 16.6 billion in fiscal 2026 and employed about 107,000 people worldwide. TDK’s portfolio includes passive components alongside sensors, power supplies, batteries and other products. The proposed alliance centres on the advanced components that both companies make, rather than the full range of TDK’s businesses.
TDK lists The Master Trust Bank of Japan, Ltd. (Trust Account) as a Taiyo Yuden shareholder in its account of the company, with 23.4% as of 30 June 2026. The same account lists Custody Bank of Japan, Ltd. (Trust Account) at 10.1% and FUTU SECURITIES INTERNATIONAL (HONG KONG) LIMITED at 3.0%.
Japan’s supply plan could involve METI
TDK says it and Taiyo Yuden will consider jointly preparing an ensuring supply plan under Japan’s Economic Security Promotion Act. They will also consider applying to the Ministry of Economy, Trade and Industry for approval of the plan and for support under the legislation. The memorandum begins discussions on joint development, while the supply plan and applications remain under consideration.
The company says the proposed application is intended to help maintain a stable supply of advanced electronic components. It places that possibility alongside its plans to work with Taiyo Yuden on manufacturing and procurement, and its aim of securing technological advantages in AI-related fields, including physical AI.
Under the Act, advanced electronic components including MLCCs have been designated Specified Critical Products subject to measures aimed at ensuring stable supply.
