The demand for automation of magnetic components in 2018 has increased, and the demand for high-end products has also increased

Recently, Murata Electronics issued a notice to cease production, expecting to discontinue products above 0603 size before 2020. This move will release more production capacity opportunities for Chinese magnetic component companies, and it is also a rehearsal for the arrival of the high-end development trend of magnetic components. How can Chinese magnetic component companies undertake and release production capacity? How to move towards the high-end market with high interest rates? The improvement of research and development capabilities and automation production level will be the most stable link for enterprises to quickly respond to market changes.

In recent years, due to the high gross profit margin of 60% to 70% for automotive products, which is much higher than that of mid-range products with a gross profit margin of 30% to 40%, Japanese giants such as Murata and TDK have been attracted to shift their production capacity to automotive electronics. The continuous increase in the penetration rate of automotive electronics has also played a significant role in driving passive components. Many magnetic component companies are also expanding into the new energy vehicle market and opening up new automated production lines.

At present, domestic automation equipment can be divided into low-end and mid to high-end markets based on design accuracy and equipment performance. The low-end market has low concentration and has become a typical red ocean competitive market. Mainly using semi-automatic or automatic winding equipment with low intelligence and single function, the electronic coil products wound by it have low accuracy, high operating noise, high failure rate, rough wiring, and low stability.

However, multinational and local large electronic component manufacturers mainly focus on mid to high end products in terms of equipment demand, placing more emphasis on refinement, efficiency, modularity, and customization capabilities compared to price.

Chinese enterprises are no longer satisfied with the mid to low end market, and 'high-end' has become a new development goal. However, Chinese companies need to achieve new leaps in product performance and quality in order to break through the foreign investment barrier. At the same time, the production cost gap between Chinese and foreign enterprises is constantly narrowing. Therefore, the application of automated production and high-performance magnetic materials has become the key to the future development of Chinese electronic transformer and inductor enterprises.