Passive components manufacturer Yageo Corp (國巨) expects to see its revenue grow by 3.62 percent this year, benefiting from the company’s latest price hike on chip resistor products, First Capital Management Inc (第一金投顧) said on Thursday.
The company’s price increases of 15 to 20 percent on certain chip resistor products, announced on Wednesday, could increase revenue by NT$1.17 billion (US$39.53 million), while boosting its gross margin by between 3 and 4 percentage points and lifting its earnings per share by NT$0.9, First Capital said in a statement.
Yageo is one of the world’s major suppliers of resistors — an electronic component used to resist or reduce the amount of current flowing in an electronic circuit — controlling one-third of the global market share, with rivals including Taiwan’s Walsin Technology Corp (華新科) and Ralec Electronic Corp (旺詮), as well as Japan’s Rohm Co Ltd and KOA Corp, Taishin Securities Investment Advisory Co (台新投顧) said in a separate statement on Thursday.
Yageo reported total revenue of NT$32.26 billion last year, up 8.91 percent from 2016, as the company raised prices for its multilayer ceramic capacitor (MLCC) products four times throughout the year amid a supply crunch.
Chip resistor sales contributed NT$14.2 billion to Yageo last year, accounting for about 44 percent of its total revenue, with MLCCs making up 50 percent, Taishin said.
Viking Tech Corp (光頡科技), a supplier of resistors and inductors, also on Thursday announced that it would raise prices for several chip resistors by 10 percent, due to higher prices for raw materials such as packaging material, paste, electroplating material and ceramic substrate.
‧ A price hike of 15 to 20 percent on certain chip resistors could raise revenue by NT$1.17bn.
‧ Resistor sales make up 44% of revenue.
‧ Viking Tech is also to raise prices by 10% due to higher raw material prices.
‧ The supply shortage is expected to continue into the first half of this year.
Yageo’s and Viking Tech’s price hikes came after Ralec announced on Jan. 2 that it would raise prices for some chip resistor products by up to 15 percent for greater China distributors and agents.
The shortage in chip resistor supplies began in the third quarter of last year and the situation is expected to persist into the first half of this year, as major manufacturers in Japan are moving to focus on high-end products amid a trend toward automotive electronics, analysts said, adding that increases in resistor supplies at Taiwanese suppliers have been limited, while raw material and labor costs continue to rise and the New Taiwan dollar struggles against the US dollar, analysts said.
Yageo’s stock price closed 2.98 percent lower at NT$375 in Taipei trading on Friday.
Over the past 12 months, the stock has surged more than 466 percent, compared with the main bourse’s 15.7 percent rise over the same period, Taiwan Stock Exchange data showed.
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