TAIYO Yuden Co., a Japanese maker of ceramic capacitors used in smartphones, sees increasing demand for its components next year as China pushes ahead with the fifth generation (5G) of cellular technology.

“We’re already getting orders for 5G base stations,” chief executive officer Shoichi Tosaka said in an interview. “Early next year we should start seeing 5G-related orders for smartphones.”

China’s Huawei Technologies Co. and ZTE Corp. have led the orders for capacitors used in base stations, Tosaka said. The demand is coming mostly from Chinese carriers, after the Trump administration pushed U.S. allies to exclude Chinese suppliers from their networks. Huawei may sell 100 million 5G-enabled smartphones in China alone next year, Tosaka said.

This should have been a bad year for Taiyo Yuden, as smartphone shipments have sputtered and the U.S. Government blacklisted one of its biggest customers in Huawei. Instead, the company has stuck to its May forecast for record revenue and profit.

Demand for its capacitors has proven resilient to geopolitical shocks largely because they’re components used in large numbers across all kinds of electronic devices — from smartphones to electric cars. Taiyo Yuden’s shares have more than doubled this year.

A 5G-enabled phone uses about 1,000 capacitors, or about 30 percent more than a 4G predecessor. The new wireless standard is power-hungry and requires a larger battery, which leaves less space for other components. That bolsters demand for premium capacitors that can store more energy in a smaller footprint.

Huawei is likely to lead the introduction of 5G phones, followed by Samsung Electronics Co., Tosaka said. If Apple Inc. introduces its first 5G-enabled models in September, as is widely expected, the orders for components are likely to come in June, Tosaka said.

The first batch of 5G-enabled iPhones, whenever they come, will “open up the floodgates” on device upgrades, Wedbush Securities Inc. predicted this month. About 350 million iPhones among the Cupertino, California company’s 900 million installed user base are now in the window of an upgrade opportunity, analyst Dan Ives wrote in a note to clients.

(SD-Agencies)