Not necessarily. And it does not have to be one or the other - phonics or whole words.
Children who know nursery rhymes by heart and then learn to read them, like my daughter did to begin with, don't simply learn the words as wholes and ignore the letters. They pick up phonics too, but without being explicitly taught, just as children mostly do when learning to speak.
But with English having have some really beastly spellings, like 'one, thought, through, who, you', learning to read some words as wholes is the most efficient way of doing so anyway. - It's a mixture of sounding out and working out, to get at the sound and meaning of the word on a page.
Exceptionally good readers, who are mostly the ones who become interested in learning to read around 3-3.5 and are able to learn quickly, use phonics and learn to recognise words as wholes. They get the idea that we use letters to represent sounds, but they also know that it's the words that really matter. They read for meaning.
Phonics, in the sense of sounding out and blending, is just a stage on the road to reading fluency. Fluent reading is the final stage - the ability to recognise all common words by sight (as u do), without needing to sound out.
Not all children do, or have to, get to that stage the same way. As a parent, u can hook into your dc's interests and abilities, one-to-one, far better than any teacher can. If your child can recognise hundreds of words by sight before they start school, s/he won't come to any harm. They'll use phonics for learning to write, although that is pretty tricky in English too (they - play, need - lead, ripe - write), if u see what i mean.
If u haven't got them already, buy some letters (for the bath, magnetic, wooden or plastic) and start making words together, beginning with s a t p, then adding i n m d and g o c k,
Followed by ck e u r h b f l s. U can check out the government guidance for teachers Letters and Sounds online too.
Masha Bell