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IC and material distributors to embrace strong 2Q21

Taiwan-based distributors of ICs and materials continue to see strong influx of orders, which will buoy their sales performance through the second quarter, according to industry sources.

Major system makers have increased orders for and advanced taking shipments of diverse components including ICs, passive components, discrete power devices, sensors and memory chips to prevent component shortages from disrupting their production and shipments, in turn spurring brisk demand for frontend-process chemical materials and backend materials such as IC substrates, leadframes and other packaging consumables, the sources said.

As a result, IC distributors such as WPG Holdings, WT Microelectronics, Supreme Electronics, Edom Technology Answer Technology, and materials sales agents including Topco Scientific, Wah Lee Industrial, Niching Industrial and Chang Wah Electromaterials are all expected to post stable revenue increases in first-half 2021, the sources continued.

They are all poised to benefit from international IDMs and automakers actively replenishing inventories of auto-use MCUs, MOSFETs, DDI chips, power modules, and passive components, as well as the resultant surge in demand for BGA and QNF packaging substrates and leadframes and related process chemicals, the sources said.

As chips shortages continue to worsen worldwide, downstream clients will work harder to thicken their chip inventory, the sources noted, stressing that mainstream cloud and edge computing, AIoT and 5G transmission applications will push up revenues at IC distributors in 2021, and niche-type military, in-vehicle and healthcare applications will also add growth momentum to their sales.