With the increasingly complex and ever-changing market environment, as well as the diversification and refinement of consumer demands, the magnetic component industry has gradually entered a new stage that is both challenging and full of infinite opportunities.

 

In view of this, this article aims to comprehensively analyze the current situation of the magnetic component industry, carefully examine the opportunities and challenges it faces, and provide profound insights and inspirations for enterprises in the industry by analyzing the response strategies adopted by some companies.

 

Current situation analysis: market expansion and profit margin contraction

 

In the tide of the global economy, the magnetic component industry, as one of the fundamental components of the electronics industry, continues to expand in market size.

 

Cai Jinbo, President of Guangdong Magnetic Components Industry Association and General Manager of Dongguan Shunluo Power Devices Co., Ltd., shared at the 11th Joint Academic Conference on Power Converter Magnetic Components in 2024 that it is expected that by 2028,The global magnetic component market is expected to reach a size of 35 billion US dollars。

 

Specifically, the traditional markets represented by home appliances, smartphones, and LED lighting, although still occupying the dominant position in the magnetic component market with a proportion of about 65%, have significantly slowed down their growth rate and are approaching saturation. The overall compound growth rate of the market remains between 2% and 4%.

 

And emerging markets represented by new energy vehicles, data centers, and energy storage are showing a rapid growth trend. Especially new energy vehicles and data centers have shown strong growth potential, with a compound annual growth rate expected to reach 12% to 22%.

 

However, with the influx of a large number of enterprises into emerging markets, industry competition has intensified, and the phenomenon of internal competition in the magnetic component industry is severe.

 

On the one hand< The prices of upstream raw materials continue to rise. When the reporter searched for relevant data on the non-ferrous metal website, it was found that on August 1, 2023, copper prices reached the highest point of the year, reaching 70968.33 yuan/ton; In May 2024, the spot price of copper continued to soar, with the highest price reaching 87350 yuan/ton.

 

Copper material drawing source package drawing website

 

On the other hand< The downstream export market has encountered obstacles, with prices continuing to decline, which undoubtedly further compresses the profit margins of magnetic component companies.

 

Wu Zihan, General Manager of Delong Magnetoelectric Hangzhou Business Unit, frankly stated:& ldquo; Although the order volume of magnetic components has increased in the first half of this year, the overall price of the products has been decreasing. The compression of overall machine costs poses an unprecedented and severe challenge to magnetic component enterprises.”

 

According to statistics from Shunluo Electronics, although the average sales revenue of the magnetic components industry has achieved significant growth, with an increase of 119.16% in 2023 compared to 2018, its gross profit has experienced a significant decline, with a decrease of even more than 24% in 2023 compared to 2018.

 

Regarding this, Cai Jinbo bluntly stated< The serious phenomenon of product homogenization is the main reason for this problem. During an in-depth investigation of 60 products in the market, Shunluo Electronics found that the homogeneity level of inductors reached as high as 94%, and the homogeneity level of transformers also reached 80%. The average number of substitutes for each product was not less than 4.5.

 

This phenomenon indicates that although the number of enterprises is constantly increasing, technological innovation is progressing slowly, and there is an urgent need to increase research and development efforts to promote the upgrading and development of the entire industry.

 

Four major opportunities: the development path of industry prospects

 

After a detailed analysis of the current situation in the magnetic components industry, Mr. Cai Jinbo shared his observation that the magnetic components industry is facing a series of unprecedented development opportunities. These opportunities are specifically reflected in the following four aspects:

 

1.Emerging markets are growing rapidly, and new energy vehicles are leading the trend

 

New energy vehicles are one of the important application areas in the magnetic component industry. According to data from the China Association of Automobile Manufacturers, the production and sales of new energy vehicles in China will reach 9.587 million and 9.495 million respectively in 2023. On November 14th, the China Association of Automobile Manufacturers announced that ChinaThe new energy vehicle industry has reached a new milestone& mdash; Annual production exceeds 10 million vehicles for the first time。

 

In addition, the booming development of new energy markets such as data centers and energy storage has injected new growth momentum into the magnetic components industry. The rapid growth of these emerging markets undoubtedly provides unprecedented development opportunities for the industry.

 

Image source: China Association of Automobile Manufacturers

 

2.Innovation in traditional fields, new dawn in segmented markets

 

The innovation in traditional fields such as electricity, transportation, and home appliances has brought new development opportunities to the magnetic component industry. According to statistics, the production of household refrigerators in China reached 50.51 million units in the first half of the year, a year-on-year increase of 9.7%; The production of room air conditioners reached 157.056 million units, a year-on-year increase of 13.8%; The production of household washing machines reached 53.116 million units, a year-on-year increase of 6.8%.

 

The rapid development of segmented markets such as intelligent lighting is a clear example of the trend of innovation in this industry. It is predicted that by 2025, the size of the intelligent lighting market will exceed 100 billion yuan, and its compound growth rate is expected to reach as high as 27.2%.

 

The flourishing rise of these emerging niche markets not only opens up a broader market space for the magnetic components industry, but also provides new growth points and development opportunities for related enterprises.

 

3.Technological iteration accelerates, innovation leads industry transformation

 

The development of third-generation semiconductors and the demand for technological iteration also constitute one of the current opportunities. With the increasing demand for terminal applications, products are gradually moving towards high performance, high quality, customization, and diversification.

 

Xu Xiaoquan, R&D Director of Juyi Power, emphasized that in order to meet the application needs of third-generation semiconductor materials, especially silicon carbide, magnetic integration technology is particularly important. This technology can not only effectively counteract magnetic circuits, reduce volume, and lower costs, but also significantly reduce the heat loss of magnetic components.

 

Image source package image network

 

4.International market expansion, helping enterprises achieve leapfrog development

 

With the continuous growth of overseas market demand and the continuous improvement of domestic industry competitiveness, the expansion of international markets has become an important opportunity for the current magnetic component industry. More and more enterprises are actively exploring international markets through exports, overseas investments, and building factories.

 

Especially the export growth in fields such as new energy vehicles has provided a broader development space for industry enterprises. Data shows that the export volume of new energy vehicles has reached 1.203 million units in 2023, with a growth rate of 77.6%. It is expected that the overseas sales scale of new energy vehicles will exceed 1.8 million units by 2024.

 

Challenges coexist: obstacles that magnetic components need to overcome

 

Although the magnetic components industry is facing unprecedented new opportunities, injecting vitality into the entire field, we must also be aware that behind these opportunities are a series of urgent challenges and tests that need to be addressed.

 

Compared to their counterparts in advanced countries such as Japan, domestic magnetic component companies still have a significant gap in terms of technological innovation capabilities and core competitiveness.

 

Professor Chen Wei, Executive Director of the China Power Supply Society and a professor at Fuzhou University, pointed out that:& ldquo; The development of the magnetic component industry chain requires us to work together, apply innovative thinking to propose new solutions and put them into practice. This requires not only firm determination and sufficient confidence, but also active action, courage to explore and try.”

 

He hopes that the leading companies in the magnetic component industry can bravely shoulder the responsibility of innovation and become the leaders; Pioneer;, Leading the entire industry chain forward.

 

Charging Station LLC Circuit Main Transformer Three in One Integrated Solution Source: Mingpu Optoelectronics

 

In addition< The scarcity of composite talents and the lack of core skills have become bottlenecks that restrict the further development of the industry.

 

As Yang Yugang, Chairman of the Magnetic Technology Committee of the China Power Supply Society and Professor at Taiyuan University of Technology, said& ldquo; Enterprises should increase their R&D investment, actively introduce outstanding talents, deepen industry university research cooperation with universities and research institutes, and jointly promote technological innovation and industrial upgrading to break through this bottleneck.”

 

At the same time< The lack of technical standards and specifications is becoming increasingly prominent. There are many types of magnetic components, each with its unique technical characteristics and application scenarios. In addition, the constantly changing market demand and the increasing demand for personalization have led to a diversification of the specifications and performance parameters of magnetic components, making it difficult to form a unified standard.

 

This not only leads to companies easily losing direction in the development process, but also results in uneven product quality and poor technical compatibility, which in turn affects the market competitiveness of products and hinders the coordinated development of the industrial chain.

 

The low efficiency of supply chain coordination is also a major challenge faced by the industry. The lack of sound information sharing mechanisms, poor collaborative workflow between enterprises, and low logistics and distribution efficiency have seriously constrained the timely delivery of products and the rapid response capabilities of enterprises, further exacerbating the competitive pressure in the industry.

 

What is even more severe is that domestic magnetic component enterprises have relatively weak competitiveness in the international market. Foreign brands, with their strong technological strength and brand influence, firmly occupy the high-end market, while domestic brands appear to be powerless.

 

The lack of systematization in enterprise management, inadequate communication and problem-solving abilities, coupled with the dual pressures of technological barriers and trade protectionism, puts domestic enterprises at a disadvantage in international competition. Therefore, how to enhance international competitiveness has become an important issue that domestic magnetic component enterprises urgently need to solve.

 

Breakthrough strategy: Industry chain enterprises work together to make progress

 

In the process of facing the aforementioned challenges, enterprises in the industry are gradually realizing the importance of unity and cooperation, and jointly seeking solutions to break through the situation, in order to stand out in the fierce market competition.

 

In terms of technological innovation, various forces such as device companies, magnetic material companies, and wire companies are actively surging, showing great vitality.

 

Taking Genesis Fur as an example, this magnetic component enterprise closely follows the development trend of magnetic integration technology and has successfully launched the PQ60 magnetic integration product. This product is designed specifically for the classic bridge LLC circuit topology of high-performance electric vehicle on-board chargers, achieving excellent performance in the typical input range of 85-265VAC, output voltage of 200-400VDC, power of up to 11KW, and overall efficiency of over 96%.

 

At the same time, magnetic material companies are constantly innovating to meet the stringent requirements of magnetic integration technology for materials< Huang Dingyou, the Chief Engineer of Kaitong Electronic Technology, revealed that in the research and development process of magnetic materials, they pay special attention to the innovation of material formulation and doping technology, and adopt special processing methods such as low-temperature sintering to ensure that the materials can meet various performance requirements, providing strong support for the development of magnetic integration technology.

 

Magnetic material source: Kaitong Electronics

 

Wire companies are also not to be outdone and have achieved remarkable technological breakthroughs. According to Wang Zhengang, Sales Director of Belio, their membrane wrapped square wire products have shone in the field of new energy. This type of square wire can fit more tightly to the skeleton or motor structure during the winding process, effectively reducing space waste.

 

At the same time, its unique bubble layer design effectively alleviates the skin effect under high-frequency current and improves the efficiency of current transmission. Thanks to its excellent slot filling rate and efficient current transmission efficiency, Belio's products have won wide acclaim in the market.

 

In terms of standard setting, more and more enterprises are actively participating to jointly promote the establishment and improvement of industry standards. Recently, the group standard project for "Three layer Insulated Wire for Electronic Transformers" has been successfully launched. Dongguan Mingpu Optoelectronics Co., Ltd. has taken on the responsibility and led the establishment of a special working group, responsible for data collection, research and analysis, standard framework design, and content drafting. This will greatly promote the competitiveness of the entire industry and inject new impetus into the steady development of the magnetic components industry.

 

The production process of magnetic components involves multiple complex links such as raw material procurement, production and processing, quality inspection, packaging and transportation, and supply chain management faces many challenges. To address these challenges, some companies are strengthening their cooperation with suppliers and actively expanding their supplier network, aiming to diversify procurement risks while enhancing the flexibility and resilience of the supply chain, and achieving continuous optimization of supply chain management.

 

On the journey of internationalization, many industrial chain enterprises are actively expanding overseas in order to occupy a place in the fierce international competition and enhance the international influence of their products. It is reported that< Magnetic component companies such as Mingpu, Tamura, Cooper, Shengmeida, Igor, and Yamashita have taken the lead in expanding their presence in Southeast Asia.

 

However, the road to internationalization is not smooth sailing. Enterprises need to carefully consider multiple factors such as the international market environment, policy orientation, and cultural differences based on their actual situation, and carefully formulate market expansion strategies to avoid potential risks caused by blind expansion and ensure that every step is stable and powerful.

 

conclusion

 

In the complex and ever-changing market environment and increasingly fierce industry competition, the phenomenon of internal competition in the magnetic component industry is difficult to avoid in the short term. However< Xu Ji Electric's chief expert Liu Haijian has given an optimistic prediction: this situation is expected to usher in a major turning point within two years

 

At this critical moment, whether enterprises choose to continue the internal competition or break the deadlock and achieve a leap forward is not only a severe test for the overall magnetic component industry, but also a profound questioning of whether every enterprise in the industry chain is fully prepared

 

In this transformation, enterprises not only need to constantly summarize and<