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.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
Micron Memory Taiwan Co (台灣美光), a subsidiary of US memorychip maker Micron Technology Inc, has been granted a NT$4.7 billion (US$149.5 million) subsidy under the Ministry of Economic Affairs A+ Corporate Innovation and R&D Enhancement program, the ministry said yesterday. The US memorychip maker’s program aims to back the development of high-performance and high-bandwidth memory chips with a total budget of NT$11.75 billion, the ministry said. Aside from the government funding, Micron is to inject the remaining investment of NT$7.06 billion as the company applied to participate the government’s Global Innovation Partnership Program to deepen technology cooperation, a ministry official told the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s leading advanced chipmaker, officially began volume production of its 2-nanometer chips in the fourth quarter of this year, according to a recent update on the company’s Web site. The low-key announcement confirms that TSMC, the go-to chipmaker for artificial intelligence (AI) hardware providers Nvidia Corp and iPhone maker Apple Inc, met its original roadmap for the next-generation technology. Production is currently centered at Fab 22 in Kaohsiung, utilizing the company’s first-generation nanosheet transistor technology. The new architecture achieves “full-node strides in performance and power consumption,” TSMC said. The company described the 2nm process as
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
RSS