Growth in Auto MLCC and TMR Sensors Drive TDK's Earnings While HDD Weakness Weighs

TDK is one of the top suppliers of passive components, especially focusing on the automobile industry. We estimate that TDK’s market shares in multilayer ceramic capacitors, or MLCCs, and inductors for automobiles are approximately 20% and 50%, respectively. While we expect electronic devices per automobile to continue increasing, owing to the progress of safety and environmental regulations, there are still a limited number of component manufacturers that could meet tough requirements of automakers. Therefore, we expect TDK to remain one of the beneficiaries of auto digitalization.