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Capacitor Market Booms in China - News

Capacitor Market Booms in China

164 Published by at March 20,2018

The axis of the worldwide electronics industry has tilted to China—and with it, the focus of the global capacitor industry. Spurred by low labor rates, China long ago became the world’s leading region for production of electronic systems. Major electronic manufacturing services (EMS) companies, most notably Foxconn Electronics Inc., have localized most or all of their production in the country.

With supply chains having migrated to China, the country now is the leading region for sales of electronic components. While distinct from the passives market—which includes capacitors—the closely related semiconductor business illustrates China’s position in the global electronic components trade. China in 2014 accounted for nearly 58 percent of worldwide semiconductor consumption revenue, according to the Semiconductor Industry Association (SIA).

The market for electronic capacitors in China was estimated to have reached $5.6 billion in 2014, according to TechSci Research. The massive demand for capacitors in information technology, communications and consumer electronics applications in China is driven by continuing growth in production of products including smartphones, laptops and desktop PCs, servers, TVs and DVD players, according to JSB Research.

All these devices make extensive use of capacitors. Smartphones are a particular hotspot for demand, with 730 capacitors in each iPhone 6 manufactured, according to a teardown analysis from IHS Inc.

China not only is a major producer and exporter of cellphones, it’s also a major market for the products. China’s domestic demand for smartphones was estimated to amount to 422 million units in 2014, according to Digitimes Research. A total of 278 million units were accounted for by Chinese smartphone makers.

China-based vendors are increasingly focusing on overseas markets in order to maintain their sales, particularly emerging economies. All of this is propelling rising demand for capacitors.

TechSci also attributed capacitor demand in China to government efforts. The Chinese government has been supporting domestic electronics manufacturing through a set of stimulus programs with names including “Home Appliances to the Countryside,” “Replace the Old with New,” and “Automobiles to the Countryside.” These measures have boosted the country’s electronics industry, thereby benefiting China’s capacitor market.

During the period from 2014 through 2019, ceramic and electrolytic devices are expected to remain the dominant product categories in the capacitor market, according to TechSci. Multilayer ceramic capacitors and solid double layer capacitors are expected to be the fastest growing segments. Polymer and hybrid capacitors are set to enjoy increasing adoption in various applications because of their higher frequency characteristics and lower impedance.

Competition in China’s capacitor market is fierce. Manufacturers in the country can meet domestic demand. China also is emerging as a capacitor exporter.

China’s rising profile as a capacitor manufacturer represents a growing challenge to established players in the United States and elsewhere, as the country leverages its cost advantages.

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