China’s upstream supply chain for multilayer ceramic capacitors (MLCCs) – tiny components dubbed “the rice of electronics” – is racing to expand capacity, as an artificial intelligence-driven boom triggers a surge in global orders. Shandong Sinocera Functional Materials, a major supplier of dielectric powder to MLCC manufacturers, told investors in a Shenzhen Stock Exchange filing on Wednesday that it was actively pushing to expand capacity for AI servers and vehicles, with parts of its new production lines already operational. “Looking ahead, as new capacity gradually ramps up, output and sales of MLCC powders are expected to rise further,” Sinocera said in the document, adding that it would continue to expand and ensure its supply aligns with market momentum. Dielectric powder is a core raw material used in MLCCs, which regulate electrical currents across products ranging from smartphones to high-performance AI hardware. The surge in demand comes as the sector enters what Goldman Sachs has described as the “largest and longest” cycle in MLCC history, driven by the insatiable computing needs of AI infrastructureOther upstream suppliers have also rushed to pour investments into meeting the booming demand.