Taiwan-based optical component suppliers are likely to brace for lower-than-expected sales in the third quarter of 2021 due to the low order visibility for their 5G optical components from telecom supply chain in China, according to industry sources.
Taiwanese suppliers had hoped that their shipment momentum to China’s 5G sector to maintain in 2021, based on a consumption that China’s three telecom operators would build 600,000-700,000 5G base stations in 2021, having constructed over 700,000 a year earlier, said the sources.
But the construction of 5G base stations in China has become slow since the late fourth-quarter 2020 and even slower in the first half of 2021, said the sources. They added it would be difficult for Chinese telecom operators to reach their original goals to set up at least 600,000 5G base stations in the second half of the year and particularly the construction projects might be further delayed by seasonal weather conditions the fourth quarter.
Despite the otherwise pessimistic outlook, the sources noted that China Mobile has announced the winners for its three 5G contracts involving the purchase of up to 480,000 units of 700MHz 5G macro base stations.
Citing a China Mobile announcement, the sources said Huawei took a majority of 60% in all three contracts. Other vendors, including ZTE, Nokia Shanghai Bell, Datang Mobile Communications Equipment, and Ericsson China, will share the remainder of the orders in different proportions.
Some Taiwanese suppliers believe that China Mobile’s procurement projects will help accelerate the 5G buildups in China and that they are likely to receive related orders, mainly for 10G transceiver modules, to support these projects one month later.
Due to low order visibility, GaAs-based epiwafer provider Landmark Optoelectronics saw its revenues decline 25.4% on month and 22.04% on year to NT$145.01 million (US$5.22 million). Its second-quarter revenues of NT$540 million were down 10.59% from the previous quarter, but the first-half revenues of NT$1.144 billion were up 12.14% from a year earlier.
VCSEL component maker TrueLight saw its June revenues gain 5.92% sequentially but fall 31.9% to NT$329.7 million. Second-quarter revenues were down 24.12% on year, and January-June revenues of NT$685.1 million dipped 11.43% on year.
Reference: DigiTimesAsia
