Taiwan-based Leatec Fine Ceramic, a dedicated maker of aluminum and ceramic substrates needed for manufacturing chip resistors, has expressed optimism about its operations in the third quarter of 2021.

Stable growth in demand for passive components and improvement in automotive chip shortages will buoy Leatec's sales performance in the third quarter, said the company. Nevertheless, it remains to be seen whether unfavorable macro events will bring variables to the company's positive outlook, the substrate supplier continued.

Leatec saw about 70% of its 2020 revenue generated from orders for chip resistors. Yageo, Walsin Technology, Ralec and Ta-I Technology are reportedly among its clients.

Chip resistors will remain Leatec's target market, said the company, adding that it also offers ZTA (zirconia toughened alumina) substrates for automotive. Leatec maintains its factory utilization rates at between 80% and 85%, with plans to expand its factory site in Kunshan, China.

Leatec reported revenue grew 12% sequentially and 17% on year to NT$271 million (US$9.7 million) in the second quarter of 2021, with June revenue reaching a 32-month high of NT$98.7 million.

Leatec returned to profitability in the first quarter of 2021 following nine consecutive quarters of losses. Market watchers expect the company to further improve its profitability in the second quarter.