The Current Segmentation of Passive Component Production Priorities
The current segmentation of passive component production priorities is clear: AI servers > automotive-grade > consumer electronics. Computing products are squeezing general component capacity, leading to structural shortages and frequent bidding and stockpiling in the industry.
The Tight Supply and Demand Situation Is a Long-Term Trend
The industry's annual mandatory growth is 10%-20%, compounded by unexpected AI computing power increases, resulting in demand far exceeding supply. The construction cycle for high-end production lines is 12-24 months, and new capacity is difficult to implement in the short term. A tight supply-demand structure will cover the entire year of 2026 and continue for 1-3 years.
Downstream Traditional Demand Overview
Downstream traditional demand mainly includes home appliances (35%-40%), communication terminals (25%), automotive-grade (20%), and industrial control (10%). Although AI's direct share is not high, its incremental demand is the core driver of the current industry's high prosperity and tightened supply-demand relationship.
Taiwan-Based Passive Component Manufacturers See Strong Performance
Taiwan-based passive component manufacturers saw their May performance reach new heights
Strong market demand directly translated into real performance growth for companies. In May, the main passive component manufacturers in Taiwan saw their business performance rise significantly, with multiple companies recording historic highs for several consecutive months, fully verifying the industry's high level of prosperity. The growth logic of major manufacturers is highly unified, all achieving breakthroughs through the two core fields of AI server hardware upgrades and automotive electronics.
Global Industry Leader Yageo Achieves Record Revenue
Global industry leader Yageo achieved a revenue of 15.058 billion New Taiwan Dollars in May, increasing by 7.3% month-on-month and 47.5% year-on-year, once again setting a new record. Revenue for January to May increased by 27.4% year-on-year. The company's overall orders are full, with a B/B value of 1.3, where the B/B value of the AI product line reached 1.4. All standard and high-end special product capacities are fully utilized, and institutions predict that its revenue will continue to rise quarter by quarter.
TPC Stabilizes at 7 Billion New Taiwan Dollar Threshold
TPC stabilized at the 7 billion New Taiwan Dollar threshold in May, growing by 37.77% year-on-year. The core reason is the stable shipment of coupling inductors compatible with high-end computing platforms. At the same time, the company's 800V high-voltage DC automotive solution will be implemented next year, providing sufficient growth space for the new energy vehicle business.
Other Companies Show Outstanding Performance
Lilong Electric, Liding, and Xingqin also showed outstanding performance, with revenues increasing by 29.96%, 25.03%, and 29.74% respectively in May. Relying on the strong demand for AI support products and high-end automotive-grade aluminum capacitors, their production capacity remains fully occupied, with strong order resilience.
Precision Resistor Leader Tainan Technology Stands Out
Among them, precision resistor leader Tainan Technology stood out particularly, with its May revenue growing by 58.67% year-on-year, ranking among the top in the local resistor industry. Its high growth is mainly due to the surge in demand for high-precision alloy resistors and thin-film current-sensing resistors driven by AI computing hardware upgrades. The production lines have no idle capacity throughout the year, and the order increment continues to exceed the shipment volume, with delivery times constantly being extended.
Shunhai Technology Provides Comprehensive Solutions
Under the background of full production capacity of original equipment manufacturers and structural shortages in the industry, the value of high-quality distribution companies continues to stand out. Shunhai Technology, an authorized agent of Tainan Technology, has made early arrangements for specialized inventory of high-end resistors, accurately solving the core customer pain points of industry shortages and extended delivery times.
The company uses a model of locking in original equipment manufacturer production capacity quotas monthly and delivering in batches, while simultaneously meeting the needs of large customers for long-term orders and small batch custom and trial orders from start-up companies, building a full-process delivery service system. At the same time, it synchronizes in real-time the original equipment manufacturer's production capacity, delivery time, and new product progress through online and offline channels, guiding customers to lock in orders and stock up in advance, effectively avoiding the risk of material shortages in the supply chain, and fully benefiting from the current industry's抢货行情 (stockpiling phenomenon).
The Tight Balance Between Supply and Demand Will Persist Throughout the Year
The tight balance between supply and demand of passive components will persist throughout the year
Production Allocation Pattern Is Unlikely to Change in the Short Term
Global passive component manufacturers have long capital expenditures and new production line commissioning cycles. It takes at least 12-24 months to implement new high-end capacity. At present, the differentiated pattern of AI server and automotive-grade component capacity occupying general consumer electronics capacity will continue throughout 2026, with the delivery time of standard general materials continuing to extend, and high-end computing power, automotive precision resistors, inductors, and capacitors will maintain a long-term shortage state.
Price Side Has Rigid Support
Downstream AI manufacturers and car companies have strong purchasing intentions and low price sensitivity. Coupled with the saturation of high-end component capacity and continuous accumulation of orders, the pricing power of original equipment manufacturers continues to rise. High-end passive component prices are easy to rise but difficult to fall, and the industry's profit levels continue to recover.
Market Segmentation Intensifies
Manufacturers solely focused on consumer electronics standard products have limited growth space. While those who simultaneously enter the AI computing and new energy vehicle dual markets and have the ability to mass-produce high-end components will continue to enjoy the benefits of high growth. Distributors with official agency rights and stable quotas for high-end materials will continue to benefit from downstream customers' active stockpiling activities.
In Conclusion
The upgrade of AI computing hardware and the wave of automotive electronics will become the long-term core growth engine for the passive components industry. The high prosperity of the industry will continue in the second half of 2026, and the performance of leading enterprises will steadily rise, with broad long-term growth space in the industry.
