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The clustering of the magnetic device industry is conducive to the reconstruction of the global industrial chain

by:Catech      2023-04-18

In this business environment, the magnetic device and soft magnetic material industries have been well integrated into the entire industrial chain after more than ten years of development. At present, China's achievements in epidemic control have made it possible for the center of the world's industrial chain to shift to the Chinese market, including basic industrial chains such as magnetic components and soft magnetic materials.

The Chinese market has gradually recovered after the impact of the epidemic. Compared with foreign countries that have been shut down for a longer period of time, China has become a region with stable production capacity in the world, and it is also a safe haven for the world's manufacturing industry at this stage.

This is a great thing for the global fight against the epidemic. At least, in terms of the production of medical supplies to fight the epidemic, China is undoubtedly a country that has contributed the most to the world. Every day, countries around the world take turns sending transport planes and even passenger planes to China. Hundreds of tons of medical supplies are transported from Shanghai Pudong Airport to countries all over the world.

At present, the scale of China's manufacturing industry has now accounted for 30% of China's GDP and nearly 30% of the global manufacturing industry. Although China is known as the world's factory, the quality of manufacturing development is subject to global industries. The original division of labor in the chain has always been in the middle and low-end links. Taking magnetic devices as an example, the global high-end magnetic devices are still dominated by foreign companies such as TDK, Murata, Vishay, and Sumida. The core devices of Apple mobile phones also focus on the above-mentioned products of these companies.

Since March, the resumption of work and production in China's manufacturing industry has been uneven. Many companies have been unable to resume production or even faced bankruptcy due to the disappearance of orders from Europe and the United States.

However, we have seen that there are also some companies whose orders have not declined, but have increased significantly, such as the electronics manufacturing industry in Suzhou, Chongqing and other places.

The fundamental reason is that industrial chain clusters have been formed in these places, and more than 80% of the supporting components related to electronic manufacturing are produced locally.

For China, the magnetic device and material market, the entire industrial chain is actually relatively mature, and the current market demand for these products exceeds supply as a whole. This also ensures that downstream manufacturers' demand for these basic devices and materials can be met in a timely manner. This clustered production model also reduces the risk of purchasing components from around the world, and highlights its competitiveness during the epidemic. Even if there is a supply breakdown in foreign suppliers, electronics manufacturers can find satisfactory substitutes in a clustered environment.

In other words, only those industries with relatively complete industrial chain clusters in China will experience order growth during the epidemic, and some multinational companies will also transfer orders that they originally planned to produce in Europe, Asia and other countries to China. factories in China.

Therefore, industrial chain clustering is an important feature of the global industrial chain reconstruction in this epidemic. The industrial chain clusters that have been formed or are about to be formed in China are the basis for attracting global high-end manufacturing industrial chains to settle in China.

At present, the production of magnetic devices and soft magnetic materials in China has formed Jiangsu-Zhejiang industrial bases based on Ningbo, Suzhou, Hengdian, Haining and other cities, the Pearl River Delta industrial base based on Dongguan and Shenzhen, and Chengdu, Mianyang and Chongqing. Western industrial base. According to the March financial reports of the aforementioned manufacturers, many passive component manufacturers have been able to complete the supply of product orders for more than two months, thanks to the resumption of production in China.

In addition, the efforts made by countries around the world to fight the epidemic and resume production will objectively cause various resources to flow into the Chinese market.

Since the outbreak of the epidemic abroad, governments of many countries have been releasing various resources and continuously injecting liquidity into the market in order to save their economies.

Huang Qifan, chairman of the Industrial Transformation Advisory Committee of Tsinghua Internet Industry Research Institute, believes that when a large amount of funds enter the global market, except for some financial funds that can be used to purchase anti-epidemic materials and solve the living problems of the people in the country, most of the funds are still financial. The capital must be combined with the industry and pursue a rate of return of 5%-10%.

He pointed out that from a global point of view, there are not many markets that can accept this part of funds and meet the needs of returns. The current epidemic situation in the Chinese market is well controlled, and it is also a place with low investment risks. Therefore, global liquidity will flock to the Chinese market for some time to come. high probability event.

In business and business, since the outbreak of the new crown pneumonia epidemic, China has suffered from public controversy in China, and some Western media and politicians have smeared and slandered China. But for many capitalists and entrepreneurs who have inspected China's business environment and national conditions, it is their most important thing to ensure that their products are low-cost, efficient production, and high profits.

With the development of the epidemic in the future, more foreign businessmen will see the development prospects of China's industrial chain market and are willing to invest funds in companies that are ready to join China's industrial chain clusters.

This trend will bring China a once-in-a-century historic opportunity for the development of the capital market and the establishment of industrial chain clusters.

China Amorphous Technology Co., Ltd is willing to push up our sleeves and wade into unknown territory with equal parts fearlessness and optimism.
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