While reading is a visual experience of language, handwriting is the kinesthetic element. Learning how to form the shapes of the letters helps students to more readily recognize them for reading. Seeing, hearing, saying, and writing the phonograms simultaneously reinforces and deepens their learning. We strongly recommend teaching children to write the letters at the same time that they learn to read them.
It is important to note, however, that children do not need to master handwriting while learning to read. It is normal for handwriting mastery to lag far behind progress in reading, especially in very young children.
While developing the muscle memory of how to form each letter, and a deep knowledge of the connection between that kinesthetic activity and that letter's sound(s), is very beneficial for children learning the phonograms, it is not important that they master the written letters while first learning to read. Handwriting mastery often takes much longer to develop, and this is appropriate
It is also not important that young children be able to write the letters using fine-motor movements. The transition to pencil and paper can come later, when fine-motor skills are more developed. Children first learning the letters can be writing them in sand, with markers, in paint, or on the sky, using their whole arm. For more about starting with large motor, see Why teach handwriting beginning with large motor?
To learn more, check out The Relationship Between Reading and Handwriting on the LOE Blog.