Wah Lee Industrial Corp. (3010.TT) announced September 2020 unaudited consolidated sales of NT$5,835M, a growth of 17.5% from last year, setting record high monthly sales. 3Q2020 sales reached NT$16,161M, a growth of 8.9% from last quarter, also setting record high quarterly sales. The cumulative Jan.-Sep. consolidated sales reached NT$43,350M, a growth of 6.6% from the same period last year.
Wah Lee is like the “aircraft carrier” in the raw material industry. Wah Lee’s major semiconductor customer has been growing in its high end nodes due to 5G, AI, HPC driving the demands. Its order visibility is reaching out for next year. This has driven the sales of Wah Lee’s photoresist, CMP slurry, electronic grade chemicals, and specialty gases. The related sales has been growing in double digits. PCB high frequency materials has benefited from high end servers and shifts of orders to Taiwan. High end engineering plastics penetrated into high frequency connectors and optical lenses. Optoelectronics sales has been stable in the supply of FPD materials, driver ICs, and next generation electronic products. It was estimated that Wah Lee’s Q4 sales will continue to grow and the full year sales will challenge for new high.
Taiwan semi industry is embracing the strong order pull-ins and shifts due to Sino-American technology competition. IC foundries have full capacity utilizations both in advanced and legacy nodes. The restrictions on SMIC recently had made more order shifts to Taiwan.
Wah Lee’s major semi customer has full capacity utilizations in its high end nodes for the demands from 5G, AI, and HPC. Its order visibility has reached beyond next year. Plus that the American smartphone maker’s 5G models will launch in recent days, it will bring in another wave of orders. This will enhance the sales of Wah Lee’s high end photoresist, specialty gases, CMP slurry, and spare parts. Since the first quarter of this year, semi related sales has grown by double digits and will continue till the end of this year.
The Chinese-American trade competition has affected Huawei in its smartphone market. The market openings are to be replaced by Oppo, Vivo, and Xiaomi. This trend has benefitted the sales of optical lens provider for these smartphone brands. Wah Lee introduced Japanese optical grade engineering plastics for this lens provider and has seen the related sales grown by more than 30% up until 3Q20.
In order to diversify the concentration risk, lower the cost, and develop new technology of the camera modules, the American smartphone maker has been qualifying this Chinese lens provider. According to a research report, the optical lens provider will start mass production of the 5P camera modules for the tablets in the 1st half of 2021, and will provide 5P or 6P camera modules for smartphones in the 2nd half. As a result of the success of this customer, Wah Lee will have continuously strong sales of the optical grade plastics in China.