Japan-based leadframe vendors have reportedly raised quotes for part of their products by about 15% to reflect rising material costs, but their peers in Taiwan have no intentions to follow suit, according to industry sources.
International copper prices have sharply risen to US$6,800-6900 from US$4,600-4700 per metric ton and silver prices surged to US$27-28 from US$15-16 per ounce so far this year, prompting Japanese leadframe makers including Mitsui High-tec and Shinko Electric Industries to raise quotes for their products, especially those for QFN leadframes, to partly offset the increased costs, the sources said.
But their Taiwanese peers including Chang Wah Technology (CWTC) will keep their quotes unchanged by the end of 2020 seeking to win more orders from leading OSATs including ASE Technology and Powertech Technology, the sources continued.
Taiwan's leadframe makers have seen clear order visibility for the months ahead and their etching capacity for QFN leadframes is increasingly short of demand, with delivery lead time already extended to over 12 weeks, as the OSAT firms have continued placing additional orders with them, the sources said.
The OSATs used to make major purchases from Japanese leadframe suppliers but have started procurement from domestic vendors since the start of 2020 to support strong pandemic-induced packaging demand for notebooks, Chromebooks, tablets and networking equipment, the sources noted.
As OSATs are on track to gradually raise backend service charges, it remains to be seen whether Taiwanese vendors will hike quotes for QFN leadframes in 2021, the sources said.
As the leader in Taiwan's packaging leadframe sector, CWTC is set to break ground for a new plant at Nantze Export Processing Zone in Kaohsiung, southern Taiwan on October 15. The new plant is expected to boost the firm's annual QFN leadframe shipments by 70% to 32 million units after becoming operational in 2021, the sources indicated.
Article translated by Willis Ke
