news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

The passive component industry has seen a rare surge in prices.

Recently, there have been reports that a new round of price increases has occurred in the global passive component industry, with the magnitude of the price increases far exceeding previous rounds, with the highest increase expected to reach 20%.

The main drivers of this increase are the upcoming peak season for smartphones, the recovery of the PC market and the more than 30% surge in silver prices this year.

Influenced by this news, the A-share passive components sector has been strengthening in recent days, and stocks such as Fenghua High-Tech, Fara Electronics, Sunlord Electronics, and Sanhuan Group have seen certain increases.

Hundreds of billions of high-growth track

Public data shows that passive components are key components in the electronics industry, playing a fundamental role in signal transmission and processing. These components do not actively modify the signal, but only serve as a bridge for signal circulation. Due to their small size and basic functions, they are figuratively likened to "electronic rice".

Passive components include two categories: RCL components and RF components. Among them, RCL components include capacitors, inductors and resistors. They are essential basic electronic components for electronic circuits and account for about 90% of the total output value of passive components.

With the continuous evolution of technology, the demand for passive components in cloud computing, new energy, automotive electronics and next-generation communication technologies continues to grow. The global market is expected to reach US$42.82 billion by 2027, while the Chinese market is expected to increase to RMB 258.359 billion by 2030.

Take multilayer ceramic capacitors (MLCCs) as an example. This is the most widely used type of capacitor, known for its miniaturization, high capacity and low cost. It is reported that about 1,000 MLCCs are used in smartphones, about 5,000 in fuel vehicles, and about 10,000 in electric vehicles.

It is worth noting that the passive component market has long been dominated by overseas manufacturers, who have a greater say in special raw materials and can influence industry prices by adjusting capacity utilization. For example, Murata occupies a leading position in the field of multilayer ceramic capacitors, Nippon Chemi-Con excels in the field of aluminum electrolytic capacitors, and Panasonic leads the industry with its film capacitor technology.

According to industry experts, given the leading position of Japanese manufacturers such as TDK and Murata in the inductor and magnetic bead markets, they took the lead in raising prices for related products, which may lead to other manufacturers following suit. Among them, domestic passive component manufacturers such as Sunlord Electronics, Microgate Electronics, and Fenghua Hi-Tech are also expected to benefit from this round of price increases.

A-share "Four Heroes" Leading the Way

As the basic components in electronic circuits, the localization process of passive components is the key to the development of China's electronics industry.

Since the beginning of the 21st century, China's passive component industry has gradually transformed from low-end to mid- and high-end, and the localization rate has continued to increase.

At present, among the A-share passive component listed companies, Sanhuan Group has the highest market value. The company was founded in 1970 and listed on the Shenzhen Stock Exchange in 2014. It is a comprehensive high-tech enterprise focusing on the research and development, production and sales of advanced materials. It currently has companies in Chaozhou, Shenzhen, Chengdu, Hong Kong, Germany, Thailand and other places.

It is reported that Sanhuan Group's MLCC products have made significant progress in the two technical development directions of high capacity and small size, achieving a technological breakthrough in the thickness of the dielectric layer, and its products cover mainstream specifications from 0201 to 2220. In addition, Sanhuan Group has successfully transformed traditional ceramic materials into electronic components and become a key component supplier for the construction of 5G equipment.

Sanhuan Group's performance in 2023 increased slightly compared with 2022, but the amount was lower than that in 2021. In the first quarter of 2024, the company's operating income and non-GAAP net profit attributable to shareholders increased by 31.49% and 57.4% respectively compared with the same period last year.

Another major passive component manufacturer is Sunlord Electronics. The company's main products are magnetic devices, microwave devices, sensors and sensitive devices, and precision ceramic products. The current market share of chip inductors in production and sales ranks first in China.

Sunlord Electronics announced that it expects net profit attributable to shareholders of the listed company to be RMB 366 million to RMB 376 million in the first half of 2024, a year-on-year increase of 43.00% to 47.00%. Among them, the second quarter's single-quarter operating income hit a record high, and the single-quarter revenue exceeded RMB 1.4 billion for the first time since its establishment.

Also attracting much market attention are Fara Electronics and Fenghua High-Tech, both of which saw a 5-day increase of nearly 15%.

Fenghua Hi-Tech and Sanhuan Group are on par in terms of product layout, but each has its own focus. The company's main products include MLCC, chip resistors, inductors, ceramic filters, varistors, thermistors, aluminum electrolytic capacitors, disc capacitors, supercapacitors, etc.

Fenghua Hi-Tech has full-size production capabilities in the MLCC field and is the domestic MLCC manufacturer with the most complete model coverage. Fenghua Hi-Tech's chip resistors have won the title of "National Manufacturing Single Champion Product", and chip capacitors have also been selected as "Guangdong Province 2022 Provincial Manufacturing Single Champion Product".

Founded in 1955, Fara Electronics has been focusing on the research and development and manufacturing of film capacitors, and has built and formed its own core competitiveness in technology, quality, management and other aspects. It was listed on the main board of the Shanghai Stock Exchange in 2002. It has now become a core supplier of leading companies in the global industrial control, photovoltaic, wind power, new energy vehicles, rail transportation, smart grid, home appliances, lighting and other industries, with the largest global market share.

In 2023, the company achieved total operating revenue of 3.88 billion yuan, a year-on-year increase of 1.14%; and achieved net profit attributable to parent company shareholders of 1.024 billion yuan, a year-on-year increase of 1.72%.