Yageo Corp (國巨), the nation’s biggest passive component supplier, yesterday said that customer demand is still two times as large as its shipments, indicating that persistent supply constraints would carry over into the mid-term.
The company is bullish on demand for multilayer ceramic capacitors (MLCC) due to an increase of applications in electronic devices and new orders from customers of Yageo’s Japanese rival Murata Manufacturing Co, it said.
Murata has announced it would pull out of certain traditional MLCC markets and focus on high-end MLCCs for electric vehicles, Yageo said.
The Japanese company plans to stop taking orders for traditional MLCCs from March next year and stop production of such products by spring 2020, Yageo said, citing information received from customers.
Murata’s exit would increase demand for components by other manufacturers by 20 percent and would further squeeze already tight supply, the company said.
“Yageo is capable of supplying 95 percent of the items [originally supplied by Murata], including high-capacity MLCCs… There are no technological barriers for us,” Yageo chairman Pierre Chen (陳泰銘) told investors in a teleconference call yesterday.
The additional orders would not necessarily be for low-end products and Chinese manufacturers would face technological barriers to supplying such components, Yageo said.
As a result, the company expects the supply crunch to continue into the near and medium term, supporting MLCC prices at a reasonable level, Chen said.
MLCC prices are only just bouncing back to what they were seven years ago, he added.
There are no signs that supply will ease, as customers have requested emergency shipments to avoid production disruptions, Chen said.
“As of last week, the company’s book-to-bill ratio still stands at 3, meaning that orders are twice as high as our shipments,” Chen said. “Most customers have seen their inventory fall to a very low level.”
To better meet demand ahead of the peak season next quarter, Yageo aims to boost its inventory to 45 days of shipments, from 35 days last quarter, the company said, adding that that would still be far below a healthy inventory of 60 days.
The supply constraint is caused by supply shortage of chip resistors due to stricter environmental requirements in China, the main manufacturer, Chen said.
Regulatory tightening has disrupted production of chip resistors and key components, he said.
Yageo is the largest chip resistor maker in the world.
Higher wages and component costs have also prevented chip resistor and component suppliers from expanding capacity, Yageo said.
The company’s shares surged 2.54 percent to a record high of NT$1,210 yesterday on the forecast supply constraints.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last