240 billion Chaozhou's richest person,迎来陶瓷爆发的风口

Ask AI · What challenges does the Sanhuan Group face in expanding capacity amid the surge in AI demand?

Reporter | Li Huilin Yan Ziwei Editor | Yan Ziwei

A capacitor the size of a grain of rice supports a 100 billion dollar manufacturing leader from Chaozhou.

In mid-March, Murata, the world’s largest MLCC supplier, announced that its AI servers and high-end automotive-grade passive component products would see a comprehensive price increase.

The Sanhuan Group in Chaozhou, Guangdong, is expected to benefit from this.

MLCC, or multilayer ceramic capacitors, can stack hundreds or thousands of layers of ceramics printed with electrodes within a thickness of 1 millimeter, earning it the nickname “the rice of the electronics industry.”

The Sanhuan Group, valued at hundreds of billions, primarily focuses on ceramic materials. Founded by Zhang Wanzhen in 1970, he organized hundreds of engineers in his early years to overcome technical challenges and achieve domestic production of most MLCC product specifications.

Now, driven by AI demand, MLCCs are in high demand.

“Product prices fluctuate with supply and demand, and we will determine prices based on market conditions, production costs, and other factors,” the company’s secretary office responded to inquiries from 21CBR reporters regarding price adjustments.

Responding to the news

Chaozhou, Guangdong, where the Sanhuan Group is located, is famous for its “ceramics” and is the largest production base for daily-use ceramics in the country.

Founder Zhang Wanzhen actively chose to establish himself at a high point, leading the team in meticulously crafting ceramic chips to produce MLCCs and ceramic cores for optical communication, thereby creating a leader in advanced materials.

Zhang, now 77 years old, stepped down as chairman in 2021 but remains a director. He is the richest person in Chaozhou, holding 22.7% of Sanhuan’s shares, valued at around 24 billion yuan.

In the past six months, Zhang’s public appearances have mostly been at social welfare events, as he has been gradually stepping back.

For example, in early January, he attended the opening of the “Chao People Park,” which Sanhuan invested in; six months ago, he was present as a patriarch to send wedding blessings to 26 pairs of newlyweds from Sanhuan Group.

He has entrusted daily operations to Chairman Li Gang, a professional manager born in 1983, who was previously the general manager of the Sanhuan MLCC division and is currently leading the team to capture the market.

This combination of new and old leadership has the potential to usher in an upward cycle for the industry.

Murata’s first large-scale price adjustment in nearly three years signifies that “industrial rice” has officially entered a price increase cycle.

MLCCs are essential components for electronic devices. A smartphone requires thousands of “grains of rice,” an electric vehicle needs tens of thousands, and an AI server motherboard requires 15,000 to 25,000.

The MLCC usage for a single NVIDIA GB200 server is as high as 30,000, which is 30 times that of a smartphone.

Amid the AI wave, the demand for servers has surged, with data centers being established everywhere, and high-end products are in short supply.

Sanhuan has a rich product line, and the official response to investors in mid-March stated, “MLCC has achieved mass production across all specifications from package sizes 01005 to 2220, and we have developed characteristic products such as the S and M3L series, forming a comprehensive product matrix.”

Riding the wave

The Sanhuan Group, founded by Zhang Wanzhen, originally started as a bamboo product factory and gradually transformed into making electronic ceramic components. After over 50 years of operation, it has become a hidden champion enterprise.

According to data, three of Sanhuan’s products hold the number one global market share, including ceramic cores for optical communication, aluminum oxide ceramic substrates for chip resistors, and semiconductor ceramic packaging bases.

Especially in the field of ceramic cores for optical communication, by 2024’s revenue, Sanhuan occupies over 70% of the global market share.

In 2001, Zhang Wanzhen began to layout MLCC production, which initially was not a primary focus and was not particularly large in scale.

The turning point came in recent years—overseas leading manufacturers gradually exited the mid to low-end market, allowing Sanhuan to seize the opportunity, ramp up R&D, and target the high-end market.

“The functionality of electronic products is becoming stronger, and their size is getting smaller, which increases the demand for capacity.”

Insiders at Sanhuan once noted that the previously 5-micron thick dielectric layers could not meet high-end product demands, necessitating an increase in capacity within the same volume.

The high-end MLCC market has long been monopolized by foreign companies. Sanhuan’s team spent three years overcoming the technical challenges of high capacity and small size, reducing the MLCC dielectric layer to less than 1 micron and breaking through a thousand layers of stacking, successfully achieving mass production.

As a result, Zhang Wanzhen entered high-threshold fields such as AI servers, high-end automotive electronics, and communication base stations, driving Sanhuan to grow into a domestic MLCC leader.

Sanhuan Group’s revenue situation from January to September 2025

Sanhuan has not separately disclosed MLCC product performance; related income is included in the “electronic components” segment. The official statement claims that MLCC has become the main driver of revenue growth in this segment.

From 2022 to January-September 2025, the revenue share of electronic components rose from 16.2% to 36.1%, making it the largest source of income.

With new engines driving growth, Sanhuan’s overall revenue is expected to reach 6.5 billion yuan and net profit of 1.959 billion yuan from January to September 2025, with a year-on-year growth of over 20%.

Expanding production and fundraising

The grain-sized MLCC is opening up a vast blue ocean.

AI data centers, semiconductor equipment, new energy vehicles… Emerging fields are rapidly developing, leading to a continuous rise in demand for ceramic components, with performance thresholds also increasing.

Data predicts that by 2030, the global MLCC market size is expected to reach 167.7 billion yuan, with a compound annual growth rate of 7.4%.

Zhang Wanzhen’s team has already laid out plans for expanding production to grow the MLCC business.

In 2021, Sanhuan raised about 3.9 billion yuan through a private placement to expand high-capacity multilayer ceramic capacitor projects. The original plan was to reach usable status by May 2025, at which point it would add an annual production capacity of 300 billion MLCCs.

However, the project construction has been slow, and as of June 2025, less than 30% of the investment progress has been completed. It is expected to reach usable status by May 2027.

“To adapt to changes in the external environment, ensure the safety and effectiveness of raised funds, and reduce fundraising usage risks,” Sanhuan explained the reasons for the delay in project progress.

Research reports indicate that by 2025, Sanhuan’s annual MLCC capacity will be increased to 60 billion units, a 50% increase primarily relying on automation upgrades in production lines in Shenzhen, Chengdu, and other locations. If all new expansion projects are completed, capacity will increase fivefold.

Zhang Wanzhen’s team is aggressively expanding production, aiming for the global market.

In December 2025, they have submitted a listing application to the Hong Kong Stock Exchange, planning to raise funds for investing in overseas projects, as well as for automation construction and technological iterations.

Relevant parties noted that funds raised in Hong Kong would be more convenient for use overseas.

Sanhuan also has production bases in Thailand and Germany, with overseas revenue accounting for about 17.2%. “Overseas sales will be an important part of our revenue,” the prospectus stated.

Sanhuan’s MLCC business is advancing rapidly, but there is still a gap compared to giants.

It is disclosed that its MLCC business revenue ranks ninth in the global market, with a market share of about 2%. Murata’s MLCC market share exceeds 40%, holding about 70% in high-end fields.

If the Hong Kong IPO proceeds smoothly, Sanhuan’s pace of catching up will accelerate.

Image source: Sanhuan Group, unless otherwise noted.