China Passive Components Industry

An Expert's View about Major Exports in China

Posted on: 29 Mar 2010

China’s passive components industry, which accounts for more than30 percent of global supply, is securing its position as the largest production hub for this line worldwide. Makers are boosting output and exports to match demand from the consumer electronics, communications and computer sectors. The automotive and industrial equipment segments are providing additional momentum as applications extend to these fields.

 

Across all product categories, manufacturers have a positive outlook for their overseas business despite the recent decline in export sales due to the global economic slowdown. More than 30 percent of suppliers project foreign trade will expand by over 20 percent in coming months. As such, many are broadening both their selections and geographic reach to secure orders and bolster margins.

 

The resistors line is expected to post the strongest growth. Turnout this year is estimated at 850 billion units, equivalent to a 20 percent increase from 2008. Exports will likewise rise 20 percent to hit 510 billion units this year.

 

The following are some of the keytrends in China’s passive components industry:

• Export quotes will remain in a down turn as makers leverage their price advantage over international brands.

• To keep quotes low, companies are reducing production costs by improving operating efficiency and enhancing management systems. Many are automating processes to stream line manufacturing.

• The trend for miniaturization is speeding up the development of passive components with smaller form factor and lightweight designs. In the capacitors and resistors segments,for instance, more companies are emphasizing chip versions suitable for portable devices. In the former, multilayer ceramic capacitors will be increasingly adopted. These are applicable to small digital products requiring high capacitance such as mobile phones.

• Besides reducing the size, suppliers are looking to improve overall stabilityand performance. Makers of power transformers are adopting a planar structure to boost the efficiency rate to as much as 98 percent. They also emphasize enhanced no-load loss and heat dissipation capability.

• Companies are keen to expand their markets in the EU. The Asia-Pacificregion is another key export destination.

• In addition to the tight price competition, the rising outlay for materials poses a challenge. To ensure a more stable supply and cost of manufacturing inputs, a growing number of companies are opting for locally sourced materials. In the capacitors segment, for instance, over 90 percent of inputs now come from domestic providers, with only those for chip and other high-end models using imported alternatives.

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The above is extracted from the Executive Summary of China Sourcing Report: Passive Components

 

To learn more about this report, visit: http://www.chinasourcingreports.com/csr/passive-components

 

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Posted: 29 March 2010

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