Circuit protection components industry trend analysis

In recent years, with the rapid development of electronic information technology, the replacement of electronic products has become faster and faster. With the increasing popularity of the "green, environmental, and energy-saving" ideology, and the efforts of governments of various countries in energy conservation and emission reduction, hybrid vehicles, smart grid technologies, new energy generation, etc. are in developed countries, as well as China, India, and Brazil. Growth in developing countries has been greatly promoted, which will also greatly promote the market demand for circuit protection components.

1, favorable factors

(1) Strong demand in the downstream market

In recent years, with the rapid development of electronic information technology, the replacement of electronic products has become faster and faster, and the production and sales volume of consumer electronics products such as flat-panel TVs, notebook computers, digital cameras, and smart phones has continued to increase. Circuit protection industry grows. In the next few years, these industries will continue to maintain a strong growth momentum, which will bring a huge market space for the circuit protection component industry. With the increasing popularity of the "green, environmental, and energy-saving" ideology, and the efforts of governments of various countries in energy conservation and emission reduction, hybrid vehicles, smart grid technologies, new energy generation, etc. are in developed countries, as well as China, India, and Brazil. Growth in developing countries has been greatly promoted, which will also greatly promote the market demand for circuit protection components.

(2) High technology content in the industry

Circuit protection components are high-tech products on a global scale and have high requirements for manufacturing equipment, raw materials, and process technologies. In order to meet the needs of downstream products such as multi-function, miniaturization, and portability, manufacturers need to continuously increase technical input, develop new materials, new technologies, and produce new products. Leading technology companies can obtain higher profitability levels through the development of new products, ensure continuous investment in R&D and equipment, and maintain their dominant position. At the same time, the increase in technological content has also increased the barriers to entry for the industry, to a certain extent, reducing the vicious competition in the industry, and ensuring the healthy development of the industry.

(3) Concentration of production sites in China

In recent years, notebook computers, digital cameras, and production bases for electronic products such as refrigerators, washing machines, and air conditioners have all been transferred to China on a large scale. China has become the world's production base for electronic products. The advantages of cost factors such as China’s primary labor force, technology R&D talents, land, and capital still exist. More and more circuit protection component suppliers have expanded their production scale in China. For example, Littelfuse, Bussmann, and TE Connectivity all set up joint ventures in China. Sole proprietorship company. The transfer of international circuit protection component manufacturers to China will not only expand the market size of the industry, but will also bring advanced technologies to China, rapidly increase the overall level of China's circuit protection component industry, and drive the rapid growth of the industry. After more than ten years of fierce market competition, domestic circuit protection component manufacturers have already formed companies with strong market competitiveness, such as Holley Technology and Shanghai Weian, which will continue to grow with the development of the industry.

(4) National Industrial Policy Support

Circuit protection components are new electronic components and are industries that the country encourages to develop. The National Development and Reform Commission's "Guidance Catalogue for Industrial Structure Adjustment (2011 edition)" (Revised in 2013) clearly states that in the 12th Five Year Plan period, basic core industries such as integrated circuits, software and new types of components and components must be vigorously developed to encourage the development of large-scale integrated circuits. Equipment manufacturing, manufacturing of new electronic components (chip components, frequency components, hybrid integrated circuits, power electronics, optoelectronic devices, sensitive components and sensors, new electromechanical components, high-density printed circuit boards, flexible circuit boards, etc.) The company's products belong to the first category of electronic information technology in the "National Key Support High-tech Areas" promulgated by the Ministry of Science and Technology, the Ministry of Finance, and the State Administration of Taxation in April 2008, Article 6, new electronic components, and Article 2 The chip and integrated passive component technologies are the products supported by the development of national policies, so the industry in which the company belongs is an industry encouraged and supported by the national industry policies, and the industrial policy environment continues to improve, which is beneficial to the future development of the industry.

2, unfavorable factors

(1) There is a gap between domestic technology level and international level

At present, in the circuit protection component industry, the market share of high-end technologies and high-end products is still occupied by the international giants of the industry, such as Littelfuse, Bussmann, Mersen (GCL), and TE Connectivity. The overall strength of domestic enterprises still has a certain gap compared with foreign companies. The product structure is not perfect, and the production R&D of power protectors is still relatively low-end. Therefore, it is urgent to introduce high-end international talents, increase research investment, and continuously upgrade equipment. , expand production capacity, and then enhance the company's overall strength.

(2) The brand of domestic enterprises is not high

Circuit protection components are safety components, so customers tend to prefer high-quality, well-known suppliers and they will not be easily replaced. Although a few domestic enterprises have a certain reputation in the field of electronic circuit protection, due to the relatively short establishment time, there is still a certain gap compared with international competitors, which is at a disadvantage in competition with international manufacturers. Before the issuer entered the field, the market was monopolized by foreign companies, and domestic-funded enterprises that had not yet formed a scale participated in the competition. The issuer’s competitors are mainly foreign companies such as Littelfuse and Bussmann.

(3) The appreciation of the renminbi will have a significant impact on product exports

In the past three years or so, the RMB exchange rate against the US dollar has shown an overall upward trend. As the basic factors that promote the appreciation of the renminbi, such as the trade surplus, have not changed significantly, it is expected that the trend of appreciation of the renminbi will not change in the future. When the renminbi appreciates, the price advantage of domestic export products in the international market will be weakened, affecting the price competitiveness of export products.