Unit prices for Wi-Fi modules have been rising by nearly 5-fold to US$16-17 in the third quarter from US$3.5 in late 2020 amid widening chips shortage, according to sources at Taiwan-based networking IC suppliers.
Wi-Fi chips, switch controllers and Ethernet chips have been in short supply for quite some time, with US vendors of Wi-Fi SoCs having extended delivery lead times to over 50 weeks, the sources said. The crunch has prompted downstream clients to sharply increase orders at higher prices seeking to stockpile as many inventories as possible, the sources added.
Most industrial PC makers in Taiwan, for instance, now have each sharply boosted their monthly order volumes to thousands of network chips per month from about one thousand in the past, regardless of the drastic price rises at makers and channel distributors, the sources continued.
Network chipmakers including Realtek Semiconductor, Davicom Semiconductor, Asix Electronics and IC Plus all expect their shipments of gateway controllers, network interface controllers, switch controllers, wireless LAN ICs to surge quarter by quarter in the second half of the year, with their revenues and profits to hit new highs as quotes continue to rise, the sources said, adding that their average gross margins are expected to top 50% or higher.
Some chipmakers have even seen clear order visibility throughout 2022, inspiring them to set high revenue and profit growth goals for next year, the sources said.
Article translated by Willis Ke
