According to sources at IC distributors, suppliers of power management ICs, network chips, and industrial and automotive MCUs still have the ability to raise prices in the first quarter of 2022 due to the continued tight 8-inch wafer foundry capacity.
According to Digitimes, with the increase in demand for digital transformation of global enterprises during the epidemic and the active promotion of carbon emission reduction by many large countries, first-line manufacturers, brand suppliers and financial institutions are implementing ESG management, which is expected to continue to drive demand for B2B chips and extend the supply shortage until the first half of 2022.
Sources pointed out that because the profitability of B2B chips is much higher than that of B2C chips, the profits of many Ic distributors in Taiwan have grown faster than the industry average.
It is reported that about 40% of the revenue of TaiwanESE IC distributor Wen ye technology in 2021 will come from B2B chips, which contribute more than 60% of profits. Sources said that Wenye Technology's profit in the first three quarters of 2021 more than doubled year-on-year, far outpacing other competitors.
Separately, sources pointed out that Texas Instruments (TI) recently withdrew its chip distribution rights, which is expected to affect the sales performance of IC distributors in Taiwan. However, the power management ICs and network chips from MediaTek's Likon power management ICs make up for this gap.
Sources also believe that chip demand in the first half of 2022 will be driven by three key factors. The first is the steady trend of 5G and AI technology upgrades. The second is that the epidemic has accelerated digital transformation, thereby stimulating related demand; and the last factor is the increasing demand for environmentally friendly energy, and electric vehicles will drive the demand for more power management and network platform infrastructure.
(Proofreading/Yuki)
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