Growing at an accelerated pace, Asia's power supply market is predicted to overtake both Europe's and the Americas' in the next four years, leading market researchers say. Greater China is at the forefront of this growth. In this decade, Greater China is eyed as a major contributor to Asia's imminent dominance of the global production and sales of all types of power supplies.
At least 40 percent of the world's output of switching power supplies comes from mainland China, Hong Kong and Taiwan — home to some of the top manufacturers of power supplies, including switching power supplies. With makers' sustained capacity expansion, and the continued movement of production into Greater China, the region is emerging as one of the world's top sourcing centers for switching power supplies.
Demand continues to accelerate, mostly from the telecom and industrial sectors, with growth projections going as high as 48 percent. More than 50 percent of the companies covered in this report project an increase in output of up to 50 percent in 2006. Despite the pressure of keeping prices competitive in the face of skyrocketing costs, makers generally forecast upbeat production in 2007.
This report covers basic switching power supplies, AC/DC adapters, DC/DC voltage converters and power inverters with typical applications in mobile phones, PDAs, digital still cameras, MP3 players, PMPs and LCD TV receivers. Forty-eight suppliers of switching power supplies — 25 from mainland China, 20 from Taiwan and three from Hong Kong — provided manufacturing, product development and export data for this report.
Some of the key findings Global Sources' research yielded are as follows:
• Prices are likely to increase by at least 3 percent as compliance to the RoHS directive drives up the cost of production. The market can expect more switching power supplies with a wider output range, energy-saving features and high efficiency.
• Product development is moving toward the further reduction of output noise in AC/DC adapters.
• The high cost of metals and plastics is urging makers to develop key raw materials in-house, slightly affecting the production schedule. Several critical components will continue to be sourced from major suppliers including Fairchild, Sanyo, NEC, AVX, Taiyo, TDK, Rubycon, ON Semiconductor and Murata Muwara despite cost hikes.
• The majority of Greater China makers are highly export oriented, with shipments accounting for up to 90 percent of sales.
The switching power supply industry in Greater China is discussed in the Industry Background. The main production centers for switching power supplies are also discussed in this section along with the makers' export and OEM capabilities.
Industry Overview
Mainland China accounts for roughly 40 percent of the global supply of switching power supplies, making it one of the biggest production centers in the world. A study by Frost and Sullivan predicts that the world market for switching power supplies will reach US$15.64 billion by 2009; and industry insiders project that mainland China, Taiwan and Hong Kong are likely to account for a big share of that market.
The more than 3,000 switching power supplies makers in mainland China are divided into two clusters: the first is focused on switching power supply systems for telecom and industrial applications and the second is involved primarily in power adapters, converters, inverters and enclosed/openframe power supplies. The latter cluster of makers is dominated by big-scale suppliers such as Emerson Electric Co., ZTE Corp., Beijing Dynamic Power Co. Ltd, and Wuhan Putian Telecom Equipment Groups Co. Ltd.
Taiwan companies, many of which have manufacturing hubs on the mainland, produced about 140 million units of switching power supplies in 2005, with sales reaching US$235.8 million, according to the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA). Production is forecast to increase to 164.4 million units in 2006.
Taiwan is home to about 60 switching power supplies makers. Leading suppliers include Delta Electronics Inc., Lite-On Technology Corp., Phihong Technology Co. Ltd, FSP Group, Li Shin Int. Ent. Corp. and Acbel Polytech Inc.
Production Center
Guangdong, particularly the cities in the Pearl River Delta, is the biggest production center for switching power supplies in Greater China. About 70 percent of the mainland's manufacturers are located in this province, including Emerson, ZTE, Shenzhen Huntkey Power Technology Co. Ltd., Kuantech (Shenzhen) Co. Ltd. and China Great-Wall Computer Shenzhen Co. Ltd.
About 90 percent of Taiwan's switching power supplies manufacturers have chosen to put up facilities in Guangdong due mainly to its proximity to the island's and Hong Kong's international ports.
Supplier Profile
Beijing Huizhong Co. Ltd
Beijing Huizhong Co. Ltd began producing switching power supplies in 1990, four years after it was founded as a specialized power supplies maker. Today, the twenty-year-old company mainly focuses on PCB-mounted DC/DC converters, AC/DC modules, DC/AC inverters, IGBT inverting soldering machines, transformers and heat sinks.
The company's 2005 annual sales for its switching power supplies reached US$4.5 million, about 32 percent of which came from exports. North America and Western Europe absorb 70 percent and 30 percent of Huizhong's exports, respectively. All exported products go to OEM/ODM clients. Huizhong forecasts its annual sales and exports will both increase by 20 percent in 2006.
Manufacturing Capability
Huizhong's headquarters is in Haidian district, Beijing. The facilities comprise three buildings —a five-story structure for power supply production, an office building and an R&D center. The company has another production factory in Haidian, about 10km away from its headquarters. The two factories, which have a combined production area of 3,200sqm, are operated by 105 production workers. The in-house monthly capacity is 300,000 units, and average output is 180,000 units as of Q1 2006.
Huizhong's headquarters in Haidian, has about 80 production workers. Its 1,000sqm DC/DC converter workshop is located on the third floor. Mounting, testing, supplemental welding, assembly, debugging, filling, final testing and packaging are handled in this workshop.
Beside the DC/DC converter workshop is an SMT room equipped with one Yamaha SMT machine and one ERSA re-flow soldering machine.
A 27sqm aging room is located on the same floor.
The fourth floor is devoted to AC/ DC module and communication power supply production, and has 40 workers. The floor is divided into four sections for manual insertion, wave soldering, final assembly and debugging.
A laboratory for raw materials and components inspection and finished products testing is on the first floor.
Huizhong's SMT line in its other factory is equipped with one Panasonic SMT machine and one lead-free reflow soldering machine from Shanghai Hyperion. Other production facilities in the factory include a manual insertion line with wave soldering machine, and one final assembly line.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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