Yageo Corp, the world’s third-largest supplier of multilayer ceramic capacitors, yesterday forecast its second-quarter 2023 revenue to stabilize, snapping a three-quarter losing streak. Nevertheless, it would take at least two quarters for the passive-components sector to work through an excessive inventory of standard parts.
Yageo said it was better equipped than its peers to weather the inventory correction cycle, given that it supplies premium passive components used in vehicles, and industrial and medical devices.
“From our perspective, the market is likely to recover gradually like an L shape, rather than as a V-shape rebound,” Yageo chairman Pierre Chen told reporters on Tuesday following the company’s annual general meeting in Taipei.
As Yageo has been diversifying its product lineups to niche and high-end products, the company would be able to sustain growth, Chen said. Through mergers, acquisitions and product adjustments, the company has expanded its high-end product revenue contribution to about 80 percent, he said.
Among premium products, passive components used in vehicles registered slight revenue growth, helping the segment’s revenue contribution exceed its 20 percent share target in the first quarter of this year, Chen said.
“We have broken into the first-tier automakers of Japan,” he said.
A decline in passive components used in consumer electronics was also a factor, he added. The company also sees the industrial, medical and aerospace sectors as key growth areas, he said.
Yageo has tapped into sensor businesses through merger-and-acquisition deals with Heraeus Holding GmbH and Schneider Electric SE, he said. Those sensors are used in industrial devices and vehicles, he said. Heraeus Nexensos makes premium platinum thin-film temperature sensors for high-precision measurements, and has operated for more than 100 years in the high-end industrial and automotive segments.
In aerospace, Yageo’s revenue has grown several-fold through its subsidies Kemet Corp and Pulse Electronics Corp, Chen said. Yageo said its passive components are also used in artificial intelligence (AI) devices such as AI servers from Quanta Computer Inc and Wistron Corp. “We will not be absent from the AI industry,” Chen said.
Yageo’s components are used in a wide range of electronics and it works with customers in designing new products such as 6G-enabled devices and low Earth orbit satellites.