China's largest discrete device market competition in the low-end packaging

As one of the two branches of the semiconductor industry, semiconductor discrete devices have a wide range of applications and irreplaceability. Among them, discrete devices such as high power, high current, high back pressure, high frequency, high speed, high sensitivity, and low noise are difficult to integrate. Or the cost of integration is high, so there is currently a broad space for development. Even small signal transistors that are easy to integrate have a stable market space because of their obvious price and variety advantages. In terms of market demand, due to the variety of discrete devices, wide application range, high versatility, relatively mature technology, stable market development, slow product replacement, rich procurement channels and resources, etc., which led to continuous growth in sales. China has now become the world's largest discrete device market, and a small number of discrete device manufacturers are close to the world's advanced level regardless of scale or technology.

Computers and peripherals remain the largest market

In 2006, the discrete device market in China continued to rise steadily on the basis of 2005. The discrete device market in China is also growing, consolidating its position as the world's largest discrete device market. The annual market sales exceeded 240 billion, an increase of 8.7% year-on-year, and sales reached 74.82 billion yuan, an increase of 16.2% year-on-year.

From the current market application structure of domestic discrete device products, its application areas cover consumer electronics, computers and peripherals, network communications, electronic special equipment and instrumentation, automotive electronics, led display screens, and electronic lighting. In the market application structure, consumer electronics, computers and peripherals, and network communications are still the three major application markets. In 2006, sales of discrete devices in these three areas reached 32.95 billion, 74.43 billion, and 45.08 billion respectively. , accounting for 13.7%, 31.0% and 18.8% of the total market sales for the year, of which computer and peripheral products are still the largest demand area in the entire discrete device market. Compared with 2005, the fastest growing demand area in the market is automotive electronics, with a growth rate of 17.8%. In addition, indicator lights, display screens and electronic lighting are two major areas of rapid growth, with growth in demand of 16.9% and 10.3%, respectively.

In the current product structure of the domestic discrete device market, among the four main products of diodes, triodes, power transistors, and optoelectronic devices, the sales of power transistors grew fastest, with an increase of 35.9%, and their market sales were 29.14 billion yuan. The share of the overall market is 38.9%. In addition, the growth of photodiodes is also faster, reaching 17.5%, with market sales of 13.72 billion yuan and its market share of 18.3%. The market growth of diodes and triodes is relatively stable.

Production and export capacity increase year by year

In 2006, the scale of China's discrete device industry further expanded. The total output of discrete device packaging companies (including foreign and domestic capital) in China exceeded 200 billion, an increase of 25% year-on-year, and sales revenue exceeded 18 billion yuan, a year-on-year increase of 28.6%. It can be seen that although the overall market growth slowed down in 2006, the discrete device packaging and testing industry still grew rapidly.

The domestic TR market demand mainly comes from consumer electronics, computers and peripherals, and communications. The display, automotive electronics, electronic lighting, and radio communications are the areas of rapid growth. Domestic enterprises still use ordinary diodes and triodes as their main products. The production process involves many processes after packaging and testing. However, chip manufacturing does not have a certain scale, technology and equipment lag behind, and some high-value-added chips are controlled by large foreign companies. Domestic packaging and testing companies are in a difficult position. The cost of raw and auxiliary materials has gone up, and the cost of internal controls has become tighter. It is also unable to match the speed of price cuts. “Being something to be done” is the survival of many domestic companies. Subject, but there is only one way out: Only innovation makes "characteristics."

In 2006, China's discrete devices still exhibited the characteristics of “large in and large out”, but the production and export capabilities of semiconductor discrete devices are increasing year by year.

From the perspective of the regional structure of the domestic discrete device market, the Pearl River Delta region is still the largest regional market. In 2006, the discrete device market sales in the region reached 34.26 billion yuan, accounting for 45.8% of the total domestic market size. The Yangtze River Delta region still maintains a rapid growth rate, and its market share has reached 40.0%. In addition to the above two major regions, the Bohai Region of Beijing-Tianjin-Hebei region is also an important area for domestic discrete devices. In 2006, sales of discrete devices in the region were 7.68 billion yuan, accounting for 10.3% of the total domestic market size.

Automotive electronics demand will increase by 28.5%

Driven by the rapid growth of the automobile manufacturing industry, the automotive electronics industry in China has grown at the same time. At present, there are more than 1,000 domestic automotive electronics and electrical companies or automotive electronic appliances involved. At the same time, the proportion of the total cost of electronic products in China’s car production costs has increased year by year. Driven by this, it is expected that the demand for discrete devices in the automotive electronics sector will increase by as much as 28.5% annually during the next five years.

In the lighting field, the demand for discrete devices has grown by an average of 28.2% a year, making it the second fastest growing market. With the launch of domestic 3G licenses and 3G networks, the market demand for 3G central office and terminals will grow rapidly. With the growth in the demand for discrete device products, the demand for discrete devices in the domestic network communications sector will increase by 16.3% annually during the next five years.

The drop in the price of discrete device products poses a great challenge to the growth of corporate sales revenue and profits. In particular, for some domestic enterprises with small scale and low technology, blindly using competition and low-cost competition to compete with foreign-funded enterprises has become a major “bottleneck” restricting the healthy development of domestic enterprises. At the same time, because the entry threshold for the low-end discrete device market is not high, more domestic companies will join the low-end market and competition will become increasingly fierce. In the application field of high-end discrete power devices, it is able to meet the needs of high-end customers. There are not many manufacturers that produce high-reliability discrete devices. Most of these core technologies are owned by foreign manufacturers, and it is due to the lack of core technology constraints. It is difficult for the domestic discrete device industry to develop to a higher level. The huge market of China's semiconductor industry has attracted the influx of multinational semiconductor giants. From chip design, chip manufacturing to package testing, a “combination effect” has formed. Behind the prosperity is fierce competition.

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