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Component shortages to affect end product pricing for next 2 years, says Lite-On Tech CEO
Source: DIGITIMES   Editor: Helan   Update Time :2018/6/26 17:08:53

Passive components price hikes due to shortages will sooner or later send end product pricing up, and the consumer market will have to make adjustments in the coming two years, according to EMS provider Lite-On Technology CEO Warren Chen.

The components shortages have stemmed from strong demand from makers of automotive electronics and stricter environmental control of production in China, Chen said, adding the price hikes' impacts on end products may appear as early as third-quarter 2018, Chen noted.

Lite-On Tech mostly uses standard passive components and has seen only slight impact from the shortages, Chen indicated.

As for the US-China trade tensions, Chen said based on the US government's announced list of China-made product items for additional tariffs, only some of Lite-On Tech's LED devices and optical disc drives will be affected - 14-15% of the revenues of the former will be affected and below 10% for the latter.

Viewing that demand for SSDs used in cloud computing servers in China is growing fast, Lite-On Tech in 2017 set up a joint-venture SSD maker, Suzhou Lite-On Storage, in eastern China with Suzhou Tsinghua Storage Technology. Lite-On invested US$45 million for a 45% stake and Suzhou Tsinghua has a 55% stake.

Suzhou Lite-On Storage began construction of a factory in February 2018 and will start production at year-end at the earliest.

Lite-On Tech will close a deal to sell its business units of smartphone-, notebook- and tablet-use CCMs to Hong Kong-based LuxVisions Innovation at US$360 million plus a 20% stake in the latter by the end of June 2018. Lite-On Tech will focus automotive CCMs and has landed 5-year contact supply of automotive CCMs used in ADAS from supply chain makers for first-tier Europe-based automakers.

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