Value Investing: Latest Industry Research Report – Yageo (2327-TW) and Walsin Technology (2492-TW) See Order-to-Shipment Ratio Boosted by AI, Passive Components Enter Price Hike Cycle

Analyst Tsai Ching-Lung has helped investors avoid the risk of a major correction in passive components while also signaling the first opportunity to re-enter the market. He has continuously monitored fundamental changes. From the key B/B ratio (order-to-shipment ratio) to the latest revenue and pricing signals, what should we make of the recent positive news? Let’s analyze the key reports from Yageo (2327-TW) and Walsin Technology (2492-TW).

Revenue has already begun to recover. Yageo (2327-TW) reported July revenue of NT$16.131 billion, up 5% month-on-month and 51.5% year-on-year, marking the fifth consecutive month of record highs. Cumulative revenue for the first seven months reached NT$98.753 billion, up 32.5% year-on-year, approaching NT$100 billion. Walsin Technology (2492-TW) posted July revenue of NT$4.444 billion, up 12.2% MoM and 41.95% YoY, the highest in 93 months. Cumulative revenue for the first seven months was NT$25.372 billion, up 18.66% YoY. Both companies show growth in both monthly and annual terms, indicating that demand recovery is now reflected in actual shipments.

The B/B ratio, calculated as new orders divided by shipments, indicates demand pressure. A ratio above 1 means new orders exceed current shipments, leading to a growing backlog. Q2 industry tracking data shows Yageo’s B/B ratio rose to 2.20, Walsin Technology’s at around 1.80, Samsung Electro-Mechanics and TDK at 1.72, and Murata at 1.34. While disclosure scopes and product definitions vary, all ratios above 1 clearly indicate that high-end MLCC demand driven by AI is squeezing available production capacity.

Yageo’s strength lies in its product mix. Beyond MLCCs and chip resistors, the group supplies tantalum capacitors, magnetic components, and sensors, serving AI server power, computing, and liquid cooling systems. Utilization rates for standard products exceed 80%, and for specialty products exceed 90%. The order-to-shipment ratio for AI-related products is even higher than the company average. As high-end product share increases, revenue growth is supported not only by volume but also by rising unit prices and gross margins.

Walsin Technology’s shift is more direct. The company’s order visibility extends to year-end, with some products reaching into next year. Management has clearly stated price hikes are inevitable. Distributor prices have already been adjusted, and direct customers will undergo price negotiations in Q3 and Q4, covering chip resistors and certain MLCCs. Institutional analysts estimate AI-related applications could account for 15% to 20% of revenue this year. Volume growth in high-capacity, high-reliability products will improve its historically standard-product-heavy portfolio.

Supply-side expansion remains constrained. Walsin Technology plans around NT$4 billion in capital expenditure this year. Existing facilities have reserved space to shorten ramp-up time for new equipment, and the company is evaluating U.S. factory construction. MLCC equipment lead times are 6–12 months, and new capacity requires time for installation, certification, and stable production. Customers are placing early orders and competing for allocations to secure supply—this is why the B/B ratio remains above 1 and pricing is beginning to rise.

While both Yageo and Walsin Technology benefit from the same passive component upcycle, their positioning differs. Yageo has a more comprehensive global product line, with higher shares of high-end and specialty products, enabling it to directly serve AI server, industrial, and automotive demand. Walsin Technology is more sensitive to MLCC and chip resistor market cycles, and when capacity tightness and price hikes materialize, its operational leverage becomes more evident. The fact that both companies posted record July revenues confirms that industry recovery has moved from order data to actual revenue.

Next, watch for price hikes to spread from distribution channels to direct customers and when new capacity begins contributing. Yageo’s five consecutive months of record revenue show AI and specialty products remain key drivers. Walsin Technology has order visibility, expansion plans, and pricing adjustments to sustain momentum. The B/B ratio staying high indicates current shipments haven’t yet absorbed all demand, meaning this passive component growth cycle remains fundamentally supported. To be the first to know which stocks to buy on dips, join Tsai Ching-Lung’s official LINE: search @ai8085 or click the link below. Free intraday stock picks are also provided daily to help you track strong-performing stocks.

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Source: Tsai Ching-Lung, Analyst – Moore Investment Advisory

The securities recommended and analyzed by our company have no improper financial interests. Past performance does not guarantee future profits. Investors should make independent judgments, conduct careful evaluations, and bear investment risks on their own.