Taiwan passive components makers are losing no time fulfilling shipments of MLCCs, chip resistors, inductors and aluminum electrolytic capacitors to clients who are striving to stockpile more inventories before Lunar New Year to meet robust terminal market demand, according to industry sources.
Makers including Yageo, Walsin Technology and Ta-I Technology are seeing their inventories running out as a result, as finished products are delivered to clients immediately after they are made, leaving only semi-finished products or those still on the production lines, the sources said.
Costs of upstream materials are rising, such as copper, silver and nickel, as well as aluminum substrates needed for chip resistor production. China-based aluminum substrate maker Chaozhou Three-Circle has raised quotes by 10-15%, and its Taiwanese peer Leatec Fine Ceramics is expected to follow suit after the Lunar New Year holiday in mid-February at the earliest or in in the second quarter, the sources continued.
Yageo is running its MLCC production lines at a capacity utilization of over 80%, compared to over 70% for chip resistors, and expects the ratios to gradually ramp up to 90% and 80%, respectively, after the holiday period. It will have more employees stay behind during the period to facilitate shipments to clients.
Walsin has also readied incentives to encourage more workers to stay for production during the holiday.
Ta-I will shorten the upcoming holiday to 3-4 days from one week for employees at its Taiwan plant dedicated to frontend process of chip resistors, and will manage to keep more workers on backend production lines in China during the holiday, to better meet clients' shipment schedules.