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AI Server Demand Boosts Passive Components: Are Yageo and Walsin Poised for a Rebound?
Electronic Technology · Electronic Components · economic_daily · 2026-08-21
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Surging demand for high-end passive components in AI servers, coupled with price hikes from major suppliers, signals a potential recovery for Yageo and Walsin.
What Happened
AI Server Component Demand: The transition to AI server architectures has drastically increased the demand for high-end passive components, with some systems requiring up to one million units. The need for high-voltage and high-reliability components is driving up average selling prices, providing a significant tailwind for the industry.
Market Dynamics and Pricing: Major international suppliers like Samsung Electro-Mechanics have begun raising prices and prioritizing long-term contracts, signaling a shift in market dynamics. Yageo and Walsin Technology have seen their book-to-bill ratios climb, outperforming several regional competitors and indicating strong order backlogs.
Walsin Technology's Growth Strategy: Walsin is ramping up production capacity to meet the anticipated surge in demand, with capital expenditures expected to exceed NT$4 billion this year. The company has demonstrated consistent quarterly profit growth and improved gross margins, underscoring its operational resilience in a challenging cost environment.
Technical Outlook and Rebound Potential: After significant corrections in July, both Yageo and Walsin are trading at attractive valuation levels. With technical indicators suggesting a potential bottoming out and stable holdings among major institutional investors, analysts see a favorable risk-reward profile for investors looking to enter at current price levels.