Taiwan-based Yageo has moved to build new capacity for 01005 size chip resistors to satisfy brisk demand for smartphones and tablets, joining rivals Cyntec and Kamaya Electric that had already pushed to expand capacity for the product segment, according to industry sources.

However, the sources also expressed concerns about whether prices for 01005 size chip resistors will be negatively affected by the increased supply. Unfavorable pricing will also harm product gross margins, the sources said, adding that making 01005 size resistors yields an as high as 50% gross margin.

Taiwan-based Cyntec, a subsidiary of power supply device maker Delta Electronics, reportedly has cut into the supply chain for Apple's iPad and iPhone products. Cyntec has been expanding capacity for 01005 size devices to meet increased demand from the client, the sources indicated.

In addition, Japan-based Kamaya is boosting its capacity for both 01005- and 0201-size devices due to growing customer orders, the sources said.

Kamaya is a subsidiary of Taiwan-based MLCC specialist Walsin Technology.