5G new infrastructure and defense give birth to a new pattern of connectors

The national strategy has given Chinese electronics manufacturers, including connector companies, great expectations for the future. "Accelerating the formation of a new development pattern with 'domestic circulation' as the main body and 'domestic and international dual circulation' promoting each other", the connector industry faces a new stage, new opportunities and new challenges in the stage of high-quality economic development. Under the multiple pressures of the complex and ever-changing international situation and the uncertainty of global economic recovery in the post-epidemic era, the acceleration of my country's new infrastructure and the large-scale construction of 5G have created new opportunities for the development of the industry. Domestic companies have assessed the situation according to their own characteristics, planned for the future, cooperated and competed, and made continuous breakthroughs. This is the day of our industry reshuffle and the time for enterprises to rise.

According to the "2020-2026 China Connector Industry Competition Status and Investment Strategy Analysis Report" released by Zhiyan Consulting, the market size of connectors in mainland China in 2019 was US$22.7 billion, an increase of 8.4% compared with the same period in 2018, accounting for 31.4% of the world's market share, making it the world's largest connector sales market. From 2010 to 2019, the size of China's connector market increased from US$10.833 billion to US$22.7 billion, with a compound growth rate of 8.56%, significantly higher than the world's current growth rate of 4.8%. Looking at the 2020 semi-annual financial reports of listed companies, you can smell the new atmosphere of the top 13 Chinese connector manufacturers.

Ÿ Thanks to the surge in Q2 performance, the financial figures have risen nicely, bringing a more perfect end to the first half of the year;

Ÿ New businesses, new products, and new layouts bring surprising growth and a promising future to the company;

Ÿ Emerging consumer electronics businesses have been strongly promoted, and smart wearable products have become the star representative;

Ÿ More manufacturers are stepping up their efforts in 5G smart products and new energy vehicles;

Ÿ Rapid growth in the defense sector;

Ÿ R&D and innovation are the foundation and source of future development;

Ÿ Actively plan new infrastructure industries and build new scientific research and production bases;

Ÿ High speed, high frequency, high voltage, miniaturization and precision, the overall technical level of China's connectors is developing towards a higher direction.

This year is full of storms, both due to the epidemic and the international situation. Are you among those who are riding the wind and waves? Can you see you rushing in the connector exhibition area of ​​the 96th China Electronics Fair to be held in Shanghai? This professional platform for connector companies, we move forward hand in hand. Win-win cooperation, fearless of competition, we are worried that our brand is hidden behind others, we have the same pressure and knot, but we also have the same dream. From November 16 to 18, 2020, the 96th China Electronics Fair-International Components and Information Technology Application Exhibition will be grandly held in Shanghai. A feast of connectors is about to kick off. Let's look at the future of the wide application of connectors with CEF.

Growing inwards, the defense sector is accelerating its release

The demand for upgrading of weapons and equipment in my country is accelerating. In the final year of the 13th Five-Year Plan, the degree of informatization is accelerating, the trend of domestic substitution is rising, and the demand for technology in the defense field is exploding internally, which in turn drives the connector industry to upgrade, evolve towards high-end, and become bigger and stronger.

Among the top 13 Chinese connector manufacturers, there may not be many companies in the defense field, but they are the highlight of the connector industry and the focus of future strategic direction.

AVIC Optronics, which ranked second, achieved operating income of 4.81 billion yuan, an increase of 4.64% over the same period last year, and realized a total profit of 774 million yuan, an increase of 15.18% year-on-year. Among them, Q2 achieved strong growth, contributing 3.01 billion yuan in revenue, an increase of 23.31% year-on-year. Such growth performance mainly comes from 75.41% of electrical connectors, 16.68% of optical devices and optoelectronic equipment, and 4.73% of other products. In the first half of 2020, facing the complex changes and uncertainties in the external environment, AVIC Optronics faced the challenges head-on, and in accordance with the requirements of "two-line operations" of epidemic prevention and control and resumption of work and production, stabilized the resumption of work, ensured operations, and worked together to quickly resume production and operations. The company's products are widely used in defense and high-end manufacturing fields such as aviation, aerospace, military electronics, ships, communications and data centers, rail transit, new energy vehicles, electricity, petroleum equipment, medical equipment, and intelligent equipment, providing first-class interconnection solutions for aviation, defense, and high-end manufacturing. With the continued increase in planned demand in the future defense field and the accelerated layout in 5G and new energy vehicles, AVIC Optronics' annual goals will be completed beyond expectations.

Aerospace Electric, ranked sixth, had an operating income of 1.878 billion yuan in the first half of the year, an increase of 15.99% over the same period last year, and a total profit of 251 million yuan, an increase of 8.23% over the same period last year. Among them, the second quarter revenue was 1.118 billion yuan, a year-on-year increase of 17.99%, which is also remarkable. Aerospace Electric's main business is the research, production and sales of high-end relays, connectors, micro motors, optoelectronic devices, and cable assemblies. More than 70% of its products are sold to high-end customers in the fields of aerospace, aviation, electronics, ships, weapons, etc. The aerospace business accounts for a high proportion and has advantages. Military products basically cover all military equipment fields, and civilian products are mainly supporting the communications, petroleum, rail transit, electricity, security, and home appliance markets. It is particularly worth emphasizing that in June this year, the South China Base of Aerospace Electric held a groundbreaking ceremony, planning to invest 2 billion yuan to build a scientific research and production base for electronic components in the fields of 5G communications, Internet of Things, new energy vehicles, consumer terminals and industrial control.

Yonggui Electric, ranked 11th, also closely follows the national strategic direction, steadily advancing the development of the three major business modules of rail transit and industry, vehicle-mounted and energy information, and military and aerospace, and seizing the strategic development opportunities of "military-civilian integration" in the military and aerospace fields. In the domestic rail transit connector segment, Yonggui Electric's business has developed in depth and has formed a layout of seven major rail transit products including connectors, door systems, shock absorbers, gangways, axle counter signal systems, pantographs, and battery boxes.

The prospects are promising, 5G and new energy vehicles are highly anticipated

Among the seven major areas of "new infrastructure", the investment in 5G construction and new energy vehicles is gradually increasing, which will stimulate the connector industry to achieve rapid growth. Looking at the top 13 connector manufacturers in China, all manufacturers have different degrees of layout in the two fields of 5G and new energy vehicles, without exception.

In the field of 5G communication connectors, the 56Gpbs high-speed connector developed by AVIC Optronics has passed the full project test and user application verification and use, reaching the international advanced level and stable performance. At the same time, its more than ten self-developed high-speed connector fully automatic production lines have achieved a large-scale production capacity of more than 10 million high-speed connectors of various models. In terms of high-voltage connectors for new energy vehicles, AVIC Optronics will continue to provide the automotive industry with comprehensive high-voltage interconnection and charging system solutions for new energy vehicles, and help the rapid upgrade of the electrification of the national automotive industry. In the first half of the year, AVIC Optronics completed the designated projects of several key new models in the field of new energy vehicles and carried out the construction of automated and intelligent production lines.

Changying Precision, ranked third, is actively deploying 5G smart products and new energy vehicles. Judging from the data of Q1 and Q2, the epidemic has not affected the company's performance, which is also due to the company's active production of epidemic prevention materials. The current daily production capacity of masks exceeds 3 million. It is reported that Changying Precision plans to raise about 1.9 billion in 2020 to deploy 5G and new energy vehicle businesses. In the field of new energy vehicles, close to Tesla's Shanghai factory, Changying Precision established Shanghai Lingang Changying New Energy Technology Co., Ltd., which is the most important part of its industrial layout in the new energy vehicle cluster in the East China area. In terms of 5G, Changying Precision has also established a special 5G module division. "Dual zones, double 10 billion" is the company's CEO Mr. Chen's goal for next year.

Yihua shares ranked seventh, with domestic revenue of 582 million yuan in the first half of the year, up 35.7% year-on-year, mainly due to the full deployment of domestic 5G construction, and a substantial increase in its high-speed connector business. Yihua shares has been deeply involved in the connector field, with communication connectors as the core, consumer electronics connectors as an important component, and automotive connectors as an extension. At present, on the basis of stabilizing the low-speed communication connector market, it is actively deploying high-speed communication connectors, with speeds developing to above 100Gps.

Xinwei Communication achieved revenue of 2.557 billion yuan, an increase of 30.84% ​​over the same period last year. In the RF communication industry, high frequency means higher and higher requirements for RF materials. Xinwei Communication continues to increase its R&D investment in basic materials and basic technologies. Its future key layout of new businesses includes 5G antennas, wireless charging business, LCP business, filter business, etc.

With each passing day, consumer electronics is accelerating its extension to non-mobile phone applications

Over the years, consumer electronics have had a long and arduous journey.

Luxshare Precision, which ranked first in both revenue and profit, amazed the audience. Its financial figures have tripled in two years, mainly due to its leading consumer electronics field. Its operating income in the first half of the year was 36.452 billion yuan, an increase of 70.01% over the same period last year; net profit attributable to shareholders of listed companies was 2.538 billion yuan, an increase of 69.01% over the same period last year. Its consumer electronics business revenue increased to 31.084 billion yuan in the first half of the year, and its share increased from 77.71% in the same period last year to 85.27%.

Which boss would not be happy with such financial figures? You can't help but accept it. Luxshare Precision has the advantage of manufacturing breakthrough technology, which can quickly adapt to the development trend of technology industries such as "high speed, miniature, and integration" of electronic products. It has the core technology and intellectual property rights of independent products, and can flexibly meet the differentiated needs of different customers around the world and the pursuit of rapid innovation. Its main products in this field include Type-C, Airpods, TWS, linear motors, mobile phone antennas, wireless charging, etc. It can be seen that the strong demand for smart wearable products has become the main driving force behind the surge in performance.

New business, new products, new layout, Changying Precision is good at turning around and layout, and many of its new businesses have achieved growth, including smart wearable products, robots and industrial Internet of Things. Under the downward trend of the mobile phone industry, Changying Precision still achieved a small growth, attributed to its customer structure adjustment and product structure adjustment strategy. The company continues to increase the development of non-mobile phone business. According to the financial report, its non-mobile phone business revenue accounts for more than half.

As the world's largest connector producer and seller, China's booming 5G and new infrastructure have undoubtedly brought a new round of development opportunities to domestic connector manufacturers. In this market context, domestic connector manufacturers have been involved in emerging applications, while increasing their research and development of high-frequency and high-speed connectors. The overall technical level of my country's connectors is developing in a higher direction, among which companies with strong R&D capabilities have increasingly prominent competitive advantages, but there is still a large gap between corporate innovation capabilities and high-end products and international leading companies. "The epidemic has led to the rapid development of 5G base station construction, medical electronics, computer markets and data centers, and has also brought development opportunities for basic electronics to enter the high-end market. Connector companies should increase their R&D efforts, pay attention to technology upgrades, and actively participate in market competition and coordinated development from R&D innovation, product quality to brand value." Gu Qun, Secretary-General of the China Electronic Components Industry Association, said.

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As an exhibition with a long history in China's electronic information industry, China Electronics Fair keeps up with the development trend of the industry, actively promotes the application innovation of core technologies such as defense, 5G, Internet of Things, new energy vehicles, big data, artificial intelligence, and information security, and helps the development of the industry and boosts the development of enterprises. From November 16 to 18, 2020, the 96th China Electronics Fair - International Components and Information Technology Application Exhibition will set up a special connector theme exhibition area, attracting a number of outstanding domestic connector manufacturers including AVIC Avionics, Guizhou Aerospace Electric, Shenzhen Tongmao Electronics, Hengxing Electronics, Zhenjiang Blue Arrow Electronics, Cixi Cihui Electronics, Shenzhen Yishu Electronics, etc. Well-known connector manufacturers are gathering at the exhibition site, and everyone is welcome to visit and communicate on site.

The 96th China Electronics Fair - International Components and Information Technology Application Exhibition

Date: November 16-18, 2020

Location: Shanghai New International Expo Center

Theme: Innovation, Breakthrough and Coordinated Development

Exhibition Hall Settings:

Hall N1: Components Hall

Passive components, semiconductor discrete devices, connectors, special components

Hall N2: 5G and AIoT Technology Application Hall

5G core components (antennas, PCBs, filters, optical modules, power amplifiers, etc.), equipment and instruments, advanced manufacturing, electronic materials; Internet of Things and sensors (NB-IoT/Ai/CAT1/ ZigBee/ZETA and other technologies are innovatively applied in the fields of industrial Internet, intelligent connected vehicles, smart homes, smart communities, smart cities, etc.)