Mainland China retains its stronghold on low-end, mid-range electronic components production with almost 40 percent of global share. Key strides are being made in environment-friendly manufacturing and semiconductor, battery, solar cell and other component technologies.
Mainland China's electronic components industry is estimated to reach a total output of 630 billion units in 2007, from 520 billion units last year. By 2008, industry forecasts indicate at least 20 percent growth to about 760 billion units.
Currently, mainland China produces 39 percent of the world's electronic components. The country ranks first in production of major segments such as capacitors, resistors, electroacoustic and magnetic components, piezoelectric quartz crystals, micro motors, electronic transformers and PCBs. In particular, 50 percent and 60 percent of the world's total output for electroacoustic components and micro motors, respectively, come from the mainland.
More than 3,900 electronic component manufacturers are in the sector, with aggregate sales revenue reaching $80 billion. More than 1,000 of these makers have sales revenues surpassing $13.2 million each, according to the China Electronic Components Association (CECA). Manufacturers are widely spread on 29 provinces on the mainland, most of which are in Pearl River Delta, the Yangtze River Delta and Fujian Province.
The majority of local makers produce low-end components in large volume, and are competing against foreign companies by offering low prices. Exports of some high-end products are mostly done by foreign-invested companies. MLCCs, HDI PCBs and other high-end components needed in production are largely sourced overseas, such as the United States and Japan.
China's Ministry of Information Industry says that aside from encouraging environment-friendly processes, the country's priority is manufacturing more advanced technology components including semiconductors, chip components, high-frequency components, high-capacity batteries and solar/fuel cells in 2008 and onwards. Some large-scale makers—Sunlord, Sino-Microelectronics and DMEGC— have begun to emerge in the high-end components market.
Most of the raw materials used in electronic components, including copper, plastic and silicon, all suffered upward price adjustments in 2006. This put pressure on manufacturers in terms of production cost and lowered their profits. However, since early 2007, prices of materials have been stabilizing. Manufacturers predict that greater stability in material prices should take place through 2008.
The industry has been driven by various electronic applications, with the 3C sectors still taking the lead. The launch of Microsoft Vista and the release of dual core processors from Intel, as well as the popularity of 3G network construction and HDTV application for the 2008 Beijing Olympic Games, are apt to push demand for various 3C components through next year.
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