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What are the development advantages of the domestic circuit protection component industry?
In recent years, with the rapid development of electronic information technology, the speed of updating and upgrading electronic products has been getting faster and faster. With the increasing popularity of the concept of "green, environmental protection, and energy conservation" and the efforts of governments around the world in energy conservation and emission reduction, hybrid vehicles, smart grid technology, new energy generation, and other technologies are being vigorously promoted in developed countries as well as high growth developing countries such as China, India, and Brazil. This will greatly promote the market demand for circuit protection components.
Feb 26,2025
In recent years, with the rapid development of electronic information technology, updating and upgrading electronic products has been getting faster and faster. With the increasing popularity of the concept of "green, environmental protection, and energy conservation" and the efforts of governments around the world in energy conservation and emission reduction, hybrid vehicles, smart grid technology, new energy generation, and other technologies are being vigorously promoted in developed countries as well as high growth developing countries such as China, India, and Brazil. This will significantly promote the market demand for circuit protection components.
So, what are the development advantages of the domestic circuit protection component industry?
(1) The downstream market has strong demand. In recent years, with the rapid development of electronic information technology, the updating speed of electronic products has been getting faster and faster. The production and sales of consumer electronic products, mainly flat-screen TVs, laptops, digital cameras, smartphones, etc., have continued to grow, driving the growth of the circuit protection industry. In the coming years, the industries mentioned above will maintain strong growth momentum, bringing huge market space to the circuit protection component industry. With the increasing popularity of the concept of "green, environmental protection, and energy conservation" and the efforts of governments around the world in energy conservation and emission reduction, hybrid vehicles, smart grid technology, new energy generation, and other technologies are being vigorously promoted in developed countries as well as high growth developing countries such as China, India, and Brazil. This will significantly promote the market demand for circuit protection components.
(2) The industry has high technological content. Circuit protection components are high-tech products worldwide, with high requirements for manufacturing equipment, raw materials, and process technology. To meet the needs of downstream products such as multifunctionality, miniaturization, and portability, manufacturers need to continuously increase their technological investment, develop new materials and technologies, and produce new products. Technologically leading manufacturers can achieve high-profit margins by developing new products, ensuring continuous investment in research and equipment, and maintaining a competitive position. At the same time, the improvement of technological content has also raised the entry threshold for the industry, to a certain extent reducing vicious competition within the industry, which can ensure the healthy development of the industry.
(3) Concentrate production in China. In recent years, the production bases of laptops, digital cameras, and electronic products such as refrigerators, washing machines, and air conditioners have all shifted to China on a large scale, making China the world's production base for electronic products. The advantages of production factor costs, such as primary labor force, technical research and development talents, land, and capital in China, still exist. More and more circuit protection component suppliers are expanding their production scale in China, such as Littelfuse, Bussmann, and TE Connectivity which have established joint ventures or wholly-owned companies in China. The transfer of international circuit protection component manufacturers to China expands the industry's market size. It brings advanced technology into China, rapidly improving the overall level of China's circuit protection component industry and driving rapid growth. After more than a decade of fierce market competition, domestic manufacturers of circuit protection components have formed enterprises with strong market competitiveness, such as Haolilai Technology and Shanghai Wei'an. These enterprises will continue to grow and expand with the development of the industry.
(4) National industrial policy support. Circuit protection components belong to the new type of electronic components and are an industry encouraged by the state for development. According to the "Guiding Catalogue for Industrial Structure Adjustment (2011 Edition)" revised by the National Development and Reform Commission in 2013, during the 12th Five Year Plan period, it is necessary to vigorously develop basic core industries such as integrated circuits, software, and new electronic components, and encourage the development of large-scale integrated circuit equipment manufacturing and the manufacturing of new electronic components (chip components, frequency components, hybrid integrated circuits, power electronic components, optoelectronic components, sensitive components and sensors, new electromechanical components, high-density printed circuit boards, flexible circuit boards, etc.). The company's products belong to the first category of electronic information technology, Article 6, new electronic components, and Article 2 chip and integrated passive component technology in the "National Key Support for High tech Fields" issued by the Ministry of Science and Technology, the Ministry of Finance, and the State Administration of Taxation in April 2008. They are products supported by national policies for development. Therefore, the industry to which the company belongs is encouraged and supported by national industry policies, and the industry policy environment continues to improve, which is conducive to the future development of this industry.
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