Outlook 2021: Electronic components industry optimistic of steady recovery

Uncertainties brought about by the pandemic have not dimmed the market prospects of China's manufacturing sector for electronic components, say industry sources. Manufacturers are positive the electronics industry will pick up from where it left off and pursue previously announced technology trends. They remain confident their continuous product development focusing on reliability and stability will provide them leverage when businesses return and restore traction.

Many have jump-started expansion plans after putting them on hold in the first half of 2020, and will carry on in 2021. They continue to invest in machine acquisition.

A wider 5G deployment almost assures a boom in many segments starting in 2021. The global 5G market is projected to reach $11 trillion in 2026 from $31 billion in 2020, according to ReportsnReports. In China, up to 680,000 base stations were built in 2020, with the number forecast to reach 7.6 million by 2025.

In RF connectors and cable assemblies, the race to develop ultraminiature and higher-frequency products is ongoing. This is not only to match device miniaturization but also to meet greater data transmission requirements. Fine-pitch, multi-core and SMD interconnects are currently R&D objectives.

Fiber-optic patch cords have also been trending toward solutions that can handle 5G download and upload speeds. Chinese companies plan to continue taking advantage of demand for units with MPO connectors, which are forecast to become mainstream in 40G and 100G networks. They also have multimode OM5 cables on their agenda, which support up to 100Gbps transmission speed and can carry as many as four wavelengths, fully meeting requirements in 5G and future networks.

For a value-added feature, more smartphones working with 5G will be using AMOLED displays. Tier-one suppliers of this screen technology are now moving toward a hybrid of low-temperature polysilicon (LTPS) and indium gallium zinc oxide (IGZO) backplanes, following the lead of Apple and Samsung. Chinese companies are also into flexible AMOLED displays, which are growing in popularity.

Electric vehicles and 5G devices will fuel demand for chip resistors in 0201 and 01005 sizes, and high-precision types with ±0.01 percent tolerance and 5ppm/C temperature coefficient. The same is true for multilayer ceramic capacitors, which are ultrasmall and have high withstand voltage, high temperature resistance, and wide capacitance range. Miniaturization efforts continue, led by large companies that aim to offer 01005 and eventually 008004 units. Boosting capacitance is also a goal. Suppliers hope to develop X5R and Y5V BME ceramic capacitors with more than 100µF, which could replace aluminum and chip tantalum capacitors.

Electric vehicles

The electric (EV) and hybrid vehicle (HEV) market continues to grow at a fast pace, and is projected to outsell its traditional gas-powered counterpart by 2040.

To benefit from this development, manufacturers of Li-ion batteries are aiming for higher energy density, and better rate and cycle performance. The target is more than 400Wh/kg in 2025 and 500Wh/kg by 2030. Chinese suppliers are confident they will be able to meet these goals, having already reached 260Wh/kg. They are also working on increasing electrical conductivity and pressed electrode density to bolster rate and cycle performance by substituting graphite anode material with graphene composites. Solid-state lithium batteries have also attracted their attention. There have been breakthroughs such as those achieved by the Ningbo Institute of Materials Technology & Engineering, CAS and the Shanghai Institute of Ceramics, CAS. Some midsize and big companies have started industrializing this battery type.

In China's EV market, the largest in the world, LiFePO₄ batteries have regained their popularity after being upstaged by ternary types, which are more expensive but have a greater energy density. However, this advantage pales in comparison to LFP batteries' better thermal performance, higher safety and longer cycle life. In addition, China's government has moved to reduce tax exemptions and subsidies in the EV sector, making ternary batteries a costly solution. Outside the EV sector, 5G base stations will be a hot market in the years ahead. Other applications are industrial and solar power systems, and UPS.

High-capacity EV batteries will also demand charging stations with elevated power to enable fast charging. Experts in the charging station industry are predicting the next trend will be for products to have 1,000V output voltage, 350A charging current and 350kW rated power.

These units can provide up to 80 percent of battery capacity in 15 minutes. In China, some companies have exceeded the mainstream 60kWh rating, and others plan to do the same. Wireless charging remains an important goal, which can eventually lead to the realization of autonomous vehicles.

For having the best qualities of capacitors and batteries, supercapacitors have advanced as backup devices or replacements to batteries. Applications now extend beyond consumer electronics and communications products to HEVs and EVs, power storage systems, and the medical and military fields.

In the automotive relay sector, demand for greener, cleaner cars, buses and other vehicles is steering development toward high-voltage types. These components have a rated voltage of 370VDC or even 576VDC, high load and shock resistance, and enhanced rupture capability, in addition to being lightweight.

Robotics

China is growing its gearmotor sector to accelerate the localization of its robotics industry and reduce reliance on speed reducers, a key component, from Japan, the US, Germany and South Korea. The target is to supply 70 percent of requirements domestically by 2025 from the initial goal of 50 percent by the end of 2020.

With China being the world's top robotics market, this huge prospect is fueling investment in R&D and production. Based on projections, gearmotors for industrial robotics will have surpassed $588 million by the end of 2020 and post 30 percent CAGR within the next five years, according to Sohu News. Gearmotors account for nearly 40 percent of total robotics costs.

Brushless motors, which are also widely used in robotics and drones, are expected to gradually replace stepper and brushed kinds in the coming years. R&D will continue tofocus on high-reliability ultrasmall and integrated units.

Smart manufacturing

From constant upgrades in production and testing equipment, efforts to boost competitiveness will eventually move toward smart manufacturing or the application of Industry 4.0 – otherwise known as the Industrial Internet of Things. The potential advantages of high efficiency and, ultimately, a low-cost production solution based on mega-data, AI and robotics await.

In China's EMS sector, significant machinery acquisition has been going on for years. Emphasis is on SMT as providers build up industrial capability to compete in the domestic and overseas markets. Product lifecycle management, enterprise resource planning and other management systems have been widely adopted as well.

Into its own

China is accelerating the development of its integrated circuits industry, a pursuit fueled further by its trade war with the US. While it has built a comprehensive industry chain, this includes mostly foreign companies, underscoring dependence on key technologies for design and manufacturing equipment.

In the coming years, more emphasis will be put on IC design, an objective that can already be seen in the growing number of companies dedicated to it. The total is at 1,780, including 82 new entrants, as of end-2019, according to the China Semiconductor Industry Association IC Design Branch.

Special zones have been set up as well. One of these is the Zhongguancun IC Design Park in the district of Haidian in Beijing, which has the support of universities, research institutes and the industry association. Established in 2018, it covers an area of 220,000sqm and now gathers more than 50 design houses.

Applications for invention patents were at 43,292 as of 2019, according to the National Intellectual Property Administration, PRC, and are expected to rise further.

China's efforts on developing its IC industry have yielded double-digit increases in production volume. Imports, on the other hand, hit negative growth for the first time due to the trade war with the US. It is expected that 5G, Artificial Intelligence of Things and cloud computing will be major growth drivers in China's homegrown industry for years to come.