The huge gap in the market of electronic components in mainland China

In recent years, due to the continued rapid growth of the Chinese electronics industry, the electronic components industry has been driven by strong growth. The output of electronic components in many categories in China has been ranked first in the world, and the electronic components industry has occupied an important position in the international market.

The electronics industry has three core components: a processor, a memory, and a passive component. In the first class of processors, about 90% of the notebook's processors are Intel's, desktop processors are controlled by Intel and AMD, and smartphone processors are occupied by Qualcomm, Apple, Samsung and Intel, and China's Taiwan's MediaTek Technology. Also occupy part of the low-end smart phone market. The market concentration of memory and passive components is also high.

Memory: The situation will continue to exceed demand

The DRAM industry is fiercely competitive, and manufacturers with poor foundations have withdrawn from this field. The production capacity of DRAM-based companies has not increased in the past four years. However, the market demand has increased, resulting in a serious shortage of products.

Memory is currently divided into two categories: one is DRAM, and the other is flash memory, mainly NAND.DRAM mainly cooperates with the CPU as cache, and NAND mainly stores code and data. Early mobile phones used NOR flash memory to store code, and later the mobile phone software system was too large. The price advantage of NAND was obvious. NOR basically disappeared after 2011, and there are still a small amount of use in some of the lowest-end mobile phones. DRAM can also be simply divided into Mobile DRAM for mobile phones, DDR3 DRAM for desktops and notebooks.

DRAM is an essential component of all digital electronic products. The market size in 2012 was approximately US$26 billion, of which Samsung had a market share of 42%, South Korea Sk-Hynix had a market share of 25%, and South Korean manufacturers shared a total of 67%. Market share, the United States Micron (Micron) holds 24% of the market share, China's Taiwanese manufacturers occupy 9% of the market share. Japan originally had Elpida but was bought by Micron. Due to the fierce competition in the DRAM industry, manufacturers with poor foundations have withdrawn from the field, and the production capacity of DRAM companies has not increased in the past four years, but the market demand has increased, leading to a serious shortage of products. Since the second half of last year, the price of memory has risen all the way, and in the off-season of the electronics industry in June, we haven’t even had the money to buy it.

In June, 2Gb DDR3 rushed to its highest price in a year, reaching US$1.81. Although Taiwanese manufacturers' DRAM output only accounts for about 8% of the world's total, this market is like hype. There are four major DRAM manufacturers in Taiwan: Ruijing and Huabang, which are located in Zhongke, and the factory is located in Linkou. Both Nanke and Chinaa Branch have reported fragmentation problems, and the supply of DRAM in the coming months may be reduced by 2% to 4%.

The market size of Mobile DRAM is small, about US$12 billion, but it grows quickly because of the increasing usage of smart phones. Each mobile phone needs about 10 US dollars of DRAM. Samsung’s market share in this area With a rate of 56%, South Korea's Sk-Hynix market share is 22%, United States Micron is 21%, and the top three manufacturers have a market share of approximately 99%. The three major manufacturers are monopolized and basically they are reluctant to expand production. In order to maintain the situation in short supply, increase prices. Many people say that Apple's strength and supply chain management capabilities will not cause supply problems for their key components. However, in some areas, even Apple, which holds hundreds of billions of dollars in cash, cannot do anything. For example, core chips such as the A6X are only available from Samsung and are extremely risky. However, this problem cannot be solved. If Apple invests in hardware manufacturing, it will require at least five years of exploration and 10 years of technical reserves. This is simply unacceptable to Apple, which has always made quick money.

The NAND flash memory market is approximately 22 billion U.S. dollars. In the market, you can often see the 16Gb version of the iPad and the 32Gb version of the iPad. This Gb is the capacity of NAND. Recently, many handset manufacturers have not been able to get eMMC-type NAND, resulting in shipments being affected. The reason is simple: Samsung has reduced its external supply in order to guarantee the supply of its own mobile phones. The price of NAND flash memory has been rising since the end of June 2012, with an increase of about 30%, which is similar to the price increase of DRAM. Over the years, it has been relying on technology and increasing the scale to increase production capacity. However, the space for technology is already very small. Manufacturers are unwilling to expand production and are more willing to enjoy the situation of supply shortage. Samsung's market share is 37%, Toshiba is 29%, Micron is 14%, Hynix is ​​12%, Intel is 8%, and the top three occupy 80% of the market.

Passive Components: Japanese Manufacturers Predominate

In the MLCC market, the market share of Japanese manufacturers is approximately 55%. They will also have good growth in 2013, and the growth of Japanese manufacturers means that other manufacturers will shrink.

Passive components are mainly divided into resistors, capacitors, inductors, and magnetic cores. In 2013, the output value of the passive component industry was approximately 21.7 billion U.S. dollars, of which capacitors accounted for 66%, which was approximately 14.4 billion U.S. dollars; the output value of the resistance was approximately 2 billion U.S. dollars; the output value of the inductance was approximately 3 billion U.S. dollars; and the magnetic component output value was approximately 1.2 billion U.S. dollars.

The passive components industry is mainly distributed in Japan, the United States, China and Southeast Asia. Japan has an absolute advantage, accounting for 52% of the market. With the sharp depreciation of the yen, Japan’s share will further increase. Manufacturers in mainland China account for only about 7% of the market, and most of them are low-end products. Because Chip-type passive components are highly automated and the factory covers an area that is small, most Japanese companies produce most of their products in Japan. Only a few low-end products are produced in China and Southeast Asia, and most American products are also Local production, there is no possibility of outward transfer.

Capacitors can be divided into ceramic capacitors, aluminum electrolytic capacitors, solid-state capacitors, tantalum capacitors, and film capacitors. Among them, multi-layer ceramic capacitors MLCC has the largest shipment volume and the highest output value, accounting for 62% of the capacitor market. On average, each cell phone needs to use about 300 to 400 MLCCs. Each laptop computer needs 400 to 600 MLCCs, and each tablet computer needs 300 to 400 MLCCs. With the continuous increase of MLCC capacity, some aluminum electrolytic capacitors have been seized by MLCC. The MLCC is the capacitor with the most growth, and the aluminum electrolytic capacitor market will gradually shrink in the future. Its markets are mainly industrial equipment, white goods, TVs and PC motherboards. Among them, the white goods market is basically flat, the TV market is also showing a slight decline, the current desktop market is gradually shrinking, the traditional notebook computer market is also rapidly shrinking. The rest of the capacitor markets are relatively stable.

In the MLCC market, the market share of Japanese manufacturers is about 55%. In 2013, Samsung's SEMCO will exceed TDK as the world's second largest MLCC manufacturer. MURATA has the largest production capacity and the best technology, and holds the dominance of MLCC. If calculated in yen, TDK and TAIYOYUDEN will also have good growth in 2013, while the growth of Japanese manufacturers will mean the shrinkage of other manufacturers. The quality of Japanese manufacturers is excellent. The only drawback is that the price is high, but the depreciation of the yen reduces its selling price. The market share of YAGEO giants, WTC Huaxin Technology, HOLYSTONE, and Taiwanese enterprises in China totals about 9%. Chinese mainland companies are mainly Fenghua Hi-Tech and Yuyang Holdings, which together have a market share of less than 2%, or about 1.5%.

Many production bases in mainland China are often just an assembly shop, procurement is controlled by foreign companies and joint ventures, and more than 95% of upstream key components are controlled by foreign companies and joint ventures. In the top 100 high-tech export enterprises announced by China Customs in 2012, 18 logistics and investment-oriented enterprises were set aside. There were only 5 companies in mainland China and 46 companies in Taiwan.