Demand for inductors, passive components, and electronic components continues to grow

Taiwan’s exports of passive components such as resistors, capacitors, and inductors have experienced double-digit growth for two consecutive years. According to the Ministry of Economic Affairs’ Department of Statistics on the 15th, passive component exports reached USD 2.58 billion in 2017, marking a new high since 2003, with an annual growth rate of 13.1%, maintaining double-digit growth for the second consecutive year. Among these, capacitors accounted for 57.9%, resistors 23.6%, and inductors 18.5%. From January to May 2018, exports increased by 27.2% year-on-year, continuing the growth momentum.

The Department of Statistics stated that passive components are widely used in networking, computers, mobile phones, servers, automotive electronics, and other products, making them indispensable electronic components for information and communication products. Since 2012, Taiwan’s passive component exports faced four consecutive years of negative growth due to a slowdown in global economic growth, weak demand for end-use products, and a global supply-demand imbalance.

In recent years, the demand for passive components has surged, driven by upgrades in smartphone specifications, the electrification of vehicles, enhanced communication functions, and the rise of the Internet of Things (IoT). Additionally, as major Japanese manufacturers of multilayer ceramic capacitors (MLCCs) shift their production capacity towards higher-end automotive products, Taiwanese manufacturers have benefited from the resulting order transfers. Coupled with new production capacities not yet coming online, supply has tightened, prices have risen, and exports have grown significantly.

The Department of Statistics noted that in 2017, Taiwan’s passive component exports were primarily to Mainland China and Hong Kong, which accounted for 79.2% of the market, followed by the United States at 4.3%, and Germany at 3.3%. Among various countries, Japan held the largest market share of passive component imports into Mainland China and Hong Kong at 41.1%, followed by Taiwan at 11.9%, and the Philippines at 8.2%.

Compared with 2011, the Philippines saw the largest increase in market share by 2.9 percentage points, followed by Malaysia with a 1.9 percentage point increase. This growth was mainly due to international major manufacturers establishing factories in the Philippines and Malaysia, boosting exports to China. Taiwan’s market share also increased by 0.3 percentage points. In contrast, Japan and South Korea’s shares declined by 5.4 and 2.6 percentage points respectively, mainly because their manufacturers set up plants in China, reducing exports to the Chinese market.

Japan’s passive component exports remain higher than those of Taiwan and South Korea. The Department of Statistics explained that Japan’s advantage lies in its own materials and equipment, advanced technology, and expansion in high-end product markets. Japan was the largest exporter of passive components in 2017, with exports reaching USD 7.02 billion, an 11.0% increase year-on-year. South Korea’s passive component industry grew significantly, supported by the popularity of Korean electronic products, with 2017 exports totaling USD 1.87 billion—a 25.9% increase—but still below Taiwan’s export value.