Fenghua Hi-Tech, a domestic passive component factory, recently announced that it will invest 450 million yuan to expand its 5.6 billion MLCC capacity per month for a period of two years. Fenghua Hi-Tech’s expansion plan this year has dropped to 15 billion per month, which is only 75% of the original target. At present, it seems that the capacity scale at the end of next year will open a larger gap with Guoju and Huaxin.
At present, the global MLCC has a monthly production capacity of about 360 billion pieces. The two-year expansion scale estimated by Fenghua Hi-Tech is equivalent to an increase in the market share of production capacity of less than 1.5%.
Fenghua Hi-Tech’s monthly capacity of MLCC at the end of last year was about 10 billion per month. The Taiwan media reported that it is optimistic about MLCC demand. Fenghua Hi-Tech announced at the end of last year that it will double its production capacity by 2018, reaching 20 billion per month, but in July this year, the legal person asked. At the time of its capacity target, the company has revised it to 15 billion per month, which is equivalent to only achieving 75% of the original target.
The Taiwan factory pointed out that the expansion of domestic plants does not eliminate the problem of equipment delivery. Fenghua Hi-Tech is a large factory in Zhaoqing area. The local government is guiding the exit of ceramic enterprises, which has an impact on the supply of upstream MLCC and chip resistor materials. Fenghua is expected to see the land used for the construction of the plant, and it is still to be seen how much capacity can be expanded before the end of next year.
Fenghua Hi-Tech announced on the evening of the 31st of last month that in order to optimize the product mix, the monthly capacity of MLCC will be expanded from January 2018 to December 2019 to 5.6 billion per month, equivalent to an average annual increase of 2.8 billion monthly capacity. In contrast to the production capacity targets of Guoju and Huaxin Keming at the end of the year, it is expected to further widen the gap.
Fenghua Hi-Tech mainly produces 0201 and common capacitors. The market generally mentions the size, and rarely refers to the capacitance. Fenghua Hi-Tech’s products are mainly low-power, while ordinary capacitors are mainly consumer or home appliances. The Taiwan factory is not enough to pose a threat.
According to the financial report of Fenghua Hi-Tech official website, the revenue in 2017 was 3.355 billion yuan, and the revenue of MLCC and chip resistors reached 823 million yuan and 632 million yuan respectively. The global MLCC output value in 2017 was about 11.1 billion US dollars, and the revenue of Fenghua Hi-Tech last year was estimated. The ratio is about 1.08%.
MLCC supply and demand is still very tight
Gu Xinjing, general manager of Huaxin Branch, said recently that the delivery of passive components is still long, and the supply of connected passive components for vehicles continues to be tight. Since the middle of 2018, the demand for 5G and its surrounding derivative applications has grown rapidly. So far, there is no new passive component supplier with the ability to provide a large-scale quality and reliable complete series of products on the market. It is estimated that the supply of passive components will be tight for a long time. In the future, some high-end products MLCC out of stock will become the norm. In 2020, it will be in short supply; in response to customer demand, Huaxin Branch will actively expand production. Huaxin Branch expects to expand production by about 20% this year, and will continue to expand production next year, and the company will also optimize product mix, which is expected to increase overall output value. , driving the performance to rise.
Looking forward to the application of passive components, Huaxin Branch pointed out that the supply of connected passive components for vehicles will continue to be tight, and the demand for 5G and peripheral applications will grow significantly. The global passive component supply continues to be limited by equipment delivery, raw materials and limited industrial talents. Layer ceramic capacitor (MLCC) products are especially noticeable.
Huaxin Branch pointed out that there is no new passive component supplier in the market capable of providing large-scale quality and reliable complete series products.
Huaxin Branch estimates that the supply of passive components will be tight for a long time, and the future will become the norm. Market demand may be subject to some fluctuations in the short-term regional economy.
Looking forward to the short-term and medium-term business layout, Huaxin Branch said that it will expand production capacity and re-deploy the capacity of each plant to meet market demand and reduce potential regional impact. In addition, we will continue to deepen MLCC products to make up for the structural bottlenecks in the market.
In the product portfolio, Huaxin continues to enhance automotive MLCC, automotive chip resistors, 5G antennas and RF RF component solutions to expand supply inductors and RF solutions.
In the customer segment, Huaxin Branch actively focused on the penetration rate of key Japanese customers.
Chen Taiming, chairman of Guoju, also said in a few days ago that the passive component market is more optimistic than the shareholders‘ meeting. Guoju also stressed in the press release that the supply and demand of MLCC is still very tight, except for Japanese manufacturers who have withdrawn from the supply chain. Application areas (5G, automotive electronics and IOT, etc.) have increased the demand for parts, coupled with obstacles such as technology and environmental assessment. It is not easy for general manufacturers to expand production. Even if the price rises, it will not solve the problem of imbalance between supply and demand. The recent retail (spot) market The price adjustment is only for the fluctuation of supply and demand of several parts. The retail market is a niche market of passive components, and the price is completely unable to represent the supply and demand of MLCC.
The market condition of multilayer ceramic capacitors (MLCC) has received much attention. European foreign-funded legal person report has expected that by the end of 2019, the supply and demand situation of MLCC is still not balanced, and the supply of MLCC continues to be tight.
The report expects that MLCC prices may have another wave of price increases in the second half of this year. By 2019, MLCC prices are still on the rise.
The local legal person recently pointed out that the delivery period of the MLCC equipment is still 14 months to 18 months. Under the circumstances that the Japanese factory continues to expand the high-end process, it is expected that the equipment of other regions will still be quite difficult to obtain equipment. It is expected that the capacity will be significantly opened. Low, optimistic about the MLCC industry, there is still room for price increases in the second half of this year to next year.
Guoju previously said at the law conference that chip resistance and MLCC continue to be in short supply, and the demand for supply will be more obvious in the future. Passive component fundamentals are still very healthy, but supply and demand are still not balanced.
In the capacity expansion section, the legal person pointed out that Guoju will expand its MLCC capacity in the next two years, with an estimated annual production capacity expansion of about 15%, and an increase of 90 billion MLCC production next year. Chip resistors can reach 120 billion levels in September this year.
From the perspective of market share, foreign-funded legal entities expect that the market share of MLCC will reach 20% by 2020, and it is estimated that the market share of chip resistors will reach 40% by the end of next year. Guoju is the world‘s largest supplier of chip resistors and the third largest MLCC supplier in the world.