Power supply manufacturers are also facing pressure from component shortages, testing their operational capabilities as gross profit margins try to recover

Power supply manufacturers are also facing pressure from component shortages, testing their operational capabilities as gross profit margins try to recover.

Since the beginning of this year, power supply manufacturers have been facing shortages of electronic components such as MOSFETs and passive components. To ensure smooth shipment, companies have launched aggressive material procurement campaigns, but this has come at the expense of gross profit margins. The market expects the component shortage to persist into the next couple of years. Going forward, key operational factors to watch will include whether manufacturers can maintain stable shipments by managing their material supply, successfully pass on costs to customers, or expand into new applications.

Since the beginning of this year, power supply manufacturers have been facing persistent shortages of electronic components such as MOSFETs and passive components. Many companies have struggled with “lack of materials, unable to ship” situations. Some industry insiders have noted that this wave of raw material shortages and price hikes caught manufacturers off guard. As a result, many companies experienced significant declines in gross profit margins and profitability during the first half of the year due to disrupted shipments.

Entering the peak season in the second half of the year, manufacturers have actively ramped up efforts to secure materials. Although shipment conditions have gradually stabilized, the cost of components remains high, testing the negotiating power of companies. Firms such as Delta Electronics and AcBel have indicated that they have been negotiating prices with downstream customers, which is expected to improve gross margins and profitability in the second half compared to the first half.

Some manufacturers are also focusing on expanding into high-end application markets to boost gross margin performance. For example, Hakata Electronics, which targets niche applications like medical and transportation sectors with higher product quality requirements, enjoys better gross margins and can better absorb the pressure of rising raw material costs. Meanwhile, FSP Group is strengthening its layout in industrial and gaming applications, striving for a recovery in gross margin.

Additionally, growth momentum for desktop computers is expected to slow down in the second half of this year. However, analysts estimate that the laptop replacement cycle remains promising. With major European and American brands gradually launching new laptop models, Taiwanese manufacturers’ operations are also expected to benefit. Nevertheless, the tight supply of components is predicted to continue into next year and the year after. As demand for electronic products steadily grows year by year, driving up the demand for electronic components, manufacturers’ ability to secure materials and negotiate prices will remain key operational factors to watch.