How do domestic companies respond to ceramic packaging substrates monopolized by a large share of foreign companies?

1. The domestic ceramic package market has long been monopolized by Japanese companies.

The main producers of ceramic packaging bases for the global market used to be Kyocera from Japan, the American company NTK (formerly known as Ceramtec), and Sanhuan Group from China. In 2013, these three companies held 68%, 28.6%, and 3.4% respectively of the ceramic packaging base market. Kyocera, as the first company in the world to use ceramics for electronic device packaging, has been the absolute leader of the ceramic packaging base market. Its global market share once reached 80% and it has long enjoyed a high gross profit margin due to its monopoly.

To this day, the global ceramic packaging base business is still monopolized by Japanese companies. According to the prospectus of Sanhuan Group in 2014, based on research by the Information Center of China Electronic Components Industry Association, in 2012 the market size of ceramic packaging bases for surface-mount electronic components was around USD 900 million, which was basically occupied by four companies: Kyocera, Sumitomo, NTK and Sanhuan Group from China.

2. Sanhuan breaks foreign monopoly and continues to increase market share.

Sanhuan began producing ceramic packaging bases in 2010, starting from the simplest quartz crystal oscillator as an entry point. It is currently the only domestic company that has achieved mass production. In 2014, it invested RMB 300 million raised from its IPO in ceramic packaging bases for surface-mount devices (SMD), mainly for quartz crystal electronic components. According to its 2017 annual report, the actual investment was RMB 248 million.

In recent years, Sanhuan's continuous investment in research and development has truly broken the long-term foreign monopoly and made it the first company in China to mass-produce ceramic packaging bases. As a Chinese company that has mastered the technology of ceramic packaging bases, Sanhuan's global market share in the field of crystal oscillator ceramic packaging bases has reached 30%.

To meet the needs of the market and customers as soon as possible, Sanhuan Group has accelerated the extension of its general products to high-end fields such as miniaturized products. It has invested self-raised funds to build new production bases, aiming to accelerate the expansion of ceramic substrates, ceramic packaging base capacity and improve regional layout. At the same time, the company has decided to adjust the investment in the smart communication terminal's new type of ceramic packaging base expansion technology transformation project and the new type of alumina ceramic substrate expansion project for electronic and power devices.

Currently, the company's main business consists of three parts: communication components, electronic components and materials, and semiconductor components, with revenue proportions of 34%, 31%, and 18% respectively in 2019, totaling 83%. Communication components include ceramic fiber optic inserts and ceramic appearance parts, electronic components and materials include MLCC and ceramic substrates, and semiconductor components mainly include ceramic packaging bases.

3. Guocera's aluminum nitride ceramic substrate has completed pilot production and will achieve mass production in 2021.

Domestic companies have been exploring ceramic packaging materials. As the only manufacturer in the market that can supply a full range of specifications and sizes of MLCC powder materials, Guocera Materials has a market share of more than 20% globally. In recent years, the company's research on aluminum nitride ceramic substrates has also been ongoing. In late February 2021, the general manager of Guocera Materials stated at the 2020 annual performance online briefing that the company's aluminum nitride ceramic substrate has completed pilot production and will achieve mass production in 2021.

Examples of domestic ceramic packaging material companies:

(1) Zhejiang Xinnuo New Material Technology Co., Ltd.

Zhejiang Xinnuo New Material Technology Co., Ltd. was established in 1993 and officially developed into a high-tech private enterprise specializing in the design, development, production, and sales of ceramic materials and products in 1998. The company has advanced foreign and leading domestic ceramic material and product production lines and has formed a wide range of products, mainly including ceramic substrates, structural ceramics, functional ceramics, and other categories. It focuses on the research and development and production of ceramic materials and devices in application fields such as semiconductors, mobile communications, and new energy.

The company's ceramic substrates include: ceramic substrates for chip resistors, ceramic substrates for thick film hybrid integrated circuits, and ceramic substrates for LEDs.

(2) Fuli Tiancheng Technology (Wuhan) Co., Ltd.

Fuli Tiancheng Technology (Wuhan) Co., Ltd. is a high-tech enterprise specializing in the research and development, production, and sales of planar and three-dimensional inorganic non-metallic-based electronic circuits. It has the Sliton brand of ceramic circuit boards.

The company's main product is ceramic circuit boards, such as alumina ceramic substrates, aluminum nitride ceramic substrates, zirconia ceramic substrates, glass, quartz, etc.

(3) Xi'an Yuanxing Vacuum Electronic Technology Co., Ltd.

Xi'an Yuanxing Vacuum Electronic Technology Co., Ltd. was established in 2006 and is a professional enterprise engaged in the research and production of metallized ceramics and ceramic-metal packaging. In recent years, the company has made important breakthroughs in ceramic-metal brazing, and the product performance continues to improve. It is particularly good at ceramic-metal welding at high temperatures, with welding temperatures of up to 1100 ℃. The products have excellent high-frequency and high-voltage insulation properties, high sealing strength, and good vacuum airtightness.

The company's products include: ceramic-metal brazing series products, vacuum tube shell sealing products, ceramic-metalization products, and 95 zirconia electronic ceramics products.

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