The performance of electronic components manufacturers is facing the explosion period, the industry boom has been verified again, and the opportunity of domestic substitution is coming.

Electronic component manufacturers have ushered in a period of explosive performance. Sanhuan Group announced on the evening of March 24th that it is expected to make a net profit of 425 million yuan to 517 million yuan in the first quarter of 2021, an increase of 130% over the same period last year. The company also disclosed its performance, KuaiBao, with revenue of 3.994 billion yuan in 2020, an increase of 46.51 percent over the same period last year, and a net profit of 1.441 billion yuan, an increase of 65.41 percent over the same period last year.

Sanhuan Group said that the pre-increase in performance benefited from the accelerated popularization of 5G technology and the deepening process of domestic substitution, the impact of the expansion of automotive electronics and intelligent manufacturing industry, and the continuous rise in the prosperity of passive components. sales of the company's main products electronic components, materials and semiconductor components have greatly increased.

Just three days ago, the annual report of Fenghua Hi-Tech for 2020 was officially released, the production capacity was enhanced and the downstream demand was booming, and its main business production and sales were booming. According to the announcement, Fenghua Hi-Tech's revenue increased by 31.54% to 4.332 billion yuan in 2020, while its net profit increased by 5.86% to 359 million yuan. The sales of film volume, resistance and inductor increased by 29.22%, 36.31% and 46.54% respectively over the same period last year, and the overall gross profit margin increased to 29.7%, an increase of 5.7 percentage points over the same period last year.

The improvement of 5G permeability drives the prosperity of the industry and automotive electronics opens up a new battlefield.

With the sustained recovery of the global economy, there is a strong demand for electronic components, while the upstream production capacity is difficult to match in the short term, resulting in a general shortage of upstream components and an increase in prices. Wafers, passive components, panels, copper clad laminates, crystal oscillators and other common prices have risen to varying degrees.

Compared with 4G mobile phones, the number of passive components needed for 5G mobile phones has greatly increased. Among them, the number of MLCC used on a single 5G mobile phone is nearly 1000, which is more than 40% higher than that of 4G mobile phones. In addition, the average amount of MLCC used in 5G base stations is about 15000, which is three times higher than that of 3750 in 4G base stations. Great Wall Securities predicts that demand for MLCC in smartphones and new edge devices will be 1.8 times higher in 2025 than in 2019, and demand for MLCC in base stations will be 1.3 times higher than in 2019.

In addition, due to the substantial increase in the use of electric vehicles, intelligent driving and other components, as the production capacity of the wafer factory tilts to the whole vehicle, the growth of car sales will also lead to a substantial increase in the use of upstream passive components, leading to a further improvement of the economy such as MLCC and copper foil. Taking the number of MLCC used in the power system as an example, the average amount of MLCC used in the power system of traditional fuel vehicles is 300-500, the number of hybrid cars is 1000-1600, the number of plug-in vehicles is 1500-2000, and the number of pure electric vehicles is 2000-2500.

At present, the global market for passive components is nearly 30 billion US dollars. Looking forward to 2021, with the demand for 5G, electric vehicles, VR, AI and other applications gradually increasing, the market space for passive components is expected to accelerate growth.

The leading leader welcomes the rising pattern of quantity and price, and the process of domestic substitution is deepened.

At present, the absolute leader of the global electronic components is Japanese manufacturers, and the share of domestic manufacturers is insufficient. Under the urgent security situation of the supply chain, there is a huge space for domestic alternatives. The rising tide of shortage and price in the industry provides a good opportunity for domestic substitution.

Take MLCC, the largest market segment of electronic components, as an example, 5G and the new energy revolution promote the growth center of MLCC demand, but under the global MLCC oligopoly pattern, the expansion of Japanese Taiwan production is slow, and the supply and demand is tight in the medium and long term. In the short term, the production capacity of large factories is close to full production, and MLCC is expected to usher in a price increase cycle driven by 5G and new energy vehicles.

Since the end of last year, Guoju, Samsung and other overseas MLCC giants continue to release tight supply information, recently Guojun, Samsung and other have begun to raise the price of MLCC products.

Societe Generale Securities released a research report on March 14 that it is expected that prices will continue to rise in the second quarter, while domestic MLCC actively introduces customers when the industry is out of stock and prices rise, which has achieved very obvious results, and is expected to make continuous breakthroughs in high-end products such as high capacity value in the future.

Among the domestic manufacturers, Sanhuan Group started with ceramic matrix and resistors, and has occupied a leading position in the subdivision fields such as ceramic core inserts and packaging bases, and is currently speeding up the business expansion of MLCC and ceramic substrates, of which MLCC expansion is rapid, reaching 10 billion pieces per month by the end of 2020 and 14 billion pieces per month under construction.

Fenghua Hi-Tech is the leading manufacturer of passive components in China, with an additional monthly production of 5.6 billion pieces of chip capacity technical transformation and expansion project starting from Q4 in 2020, and a new monthly production of 45 billion pieces of high-end capacitor base project of Xianghe Industrial Park is expected to be put into production in mid-2021. The new monthly production of 28 billion resistors is being accelerated.

In addition to MLCC, the rising prices of other electronic components are coming. The rising trend of aluminum capacitors is the most neat among the passive components. Recently, the global Top3 Aluminum Capacitor Factory has raised the price trend. Jianghai and Aihua Group are the leading domestic aluminum electrolytic capacitor enterprises.

In addition, among the domestic electronic components factories, Shunluo Electronics is the largest high-tech enterprise engaged in the R & D, production and sales of all kinds of chip components, and is already the largest 0201 RF inductor supplier in the world. at the same time, it is also the only 01005 RF inductor supplier in China, and its product performance, market share and technical level have been in the first echelon in the world.

Farah Electronics is a leading thin film capacitor manufacturer in China, with a market share of about 8%, ranking among the top three in the world.