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IC and material distributors to embrace strong profit growth in 2021

Taiwan-based IC and material distributors are expected to see their profit growths this year outperform revenue increases, as shortages of IC parts and materials are sending prices up, according to industry sources.

Companies including Answer Technology (ANStek), Edom Technology, GMI Technology, Supreme Electronics, Sunnic Technology & Merchandise, WPG and WT Microelectronics are among the beneficiaries of the ongoing chip and materials shortfalls, the sources said.

Robust RF chip demand for 5G and Wi-Fi 6 related device applications is set to buoy revenues at WPG, WT Micro and Edom, as well as ANStek with its newly-added Qorvo RF product line, in 2021, the sources noted.

GMI, which distributes the majority of Realtek Semiconductor's chip offerings including Wi-Fi core chips, is also poised to enjoy a strong 2021, the sources continued.

With the supply of memory chips becoming tight, Supreme is set to benefit from a rally in memory chip prices this year, the sources said. Supreme sells memory chips mainly for South Korea-based vendors.

Sunnic, which distributes CMOS image sensors for Sony, is also expected to generate handsome profits this year driven by strong CIS demand for not only smartphones but also automotive electronics and security control applications, the sources indicated.

In addition, semiconductor material distributors including Topco Scientific, Topco Technologies and Wahlee Industrial, and IC packaging materials distributor Niching Industrial are all poised to post impressive profit increases in 2021, when their suppliers such as Shin-Etsu and Sumitomo Bakelite propose price hikes.