Aluminum foil maker Liton Technology and Leatec Fine Ceramic, a supplier of chip resistor substrates, are both seeing increases in orders amid uncertainty over the supply line from Japan, according to market watchers. The two are among the few Taiwan-based manufacturers of upstream materials used to make passive components.

Japan is still the largest exporter of key production materials for passive components, such as aluminum foil and aluminum oxide substrates. However, production in the country is currently hampered by power blackouts and transportation issues stemming from the recent earthquake in the northern region and its aftermath, the watchers said.

Liton's capacity at its plant in Abazhou of China's Sichuan Province has reached full utilization, the watchers indicated.

Liton reportedly has been active in expanding capacity since late 2010. Previous reports cited the company as saying it would add a total of 18 production lines at the Sichuan plant with the new capacity to come online in the first quarter of 2011.

Alumina substrate specialist Leatec has seen the visibility of its orders extended through the end of the second quarter, the watchers indicated. In addition to concerns about supply chain disruptions in Japan, rising labor costs in China and strengthening of raw material prices are likely to encourage substrate suppliers to hike their quotes in the second quarter, the watchers said.

Leatec shares closed up 7% at NT$29.95 (US$1.01) on the Taiwan Stock Exchange (TSE) on March 23, while Liton rose 4% to NT$25.90.