Semiconductor material distributor Wah Lee Industrial is expected to see its revenues decrease within a range of 5% in the first quarter of 2014 thanks to strong sales of silicon wafers in China and rising demand for semiconductor materials for 20nm and 28nm process nodes, according to industry sources.

Demand for silicon wafers in China has picked up momentum recently as the China government has decided to extend its subsidies for the purchase of green energy, said the sources, noting that Wah Lee's sales of silicon wafers and solar energy products are likely to post a 10% sequential growth in the first quarter.

Wah Lee distributes polysilicon and silicon wafers for China-based GCL-Poly Energy Holdings, the sources noted.

Meanwhile, efforts by Taiwan Semiconductor Manufacturing Company (TSMC) to ramp up the output of its 20nm process will also increase its purchases of photoresists and other chemicals from Wah Lee, added the sources.

Wah Lee posted revenues of NT$34.4 billion (US$1.14 billion) in 2013, increasing 9.04% from a year earlier. Wah Lee's EPS for 2013 is likely to reach NT$5, the sources estimated.