Electronic components industry has become an important foundation to support the development of China's electronic information industry. Electronic components refer to the general term of electronic components and devices. Electronic components include resistors, capacitors, inductors, etc; Electronic devices mainly include discrete devices, integrated circuits, other devices, etc. According to different product classifications, among which discrete devices can be further divided into diodes, transistors, thyristors, transistors, etc. Integrated circuits can be further divided into analog circuits, microprocessors, logic integrated circuits, memories, etc.

Classification of electronic components

Data source: public data collation

Electronic components industry is the basic support of electronic information industry. The development of electronic components in China is from scratch, from small to large. In 1956, the North China Radio Equipment Joint Factory was built and put into operation, which was the first comprehensive component factory in China. By the 1990s, the industries of communication equipment, consumer electronics, computer, Internet application products, automotive electronics, set-top boxes and so on had developed rapidly. At the same time, with the transfer of international manufacturing industry to China, the electronic components industry in mainland China had developed rapidly. According to the data of E-Commerce Information Network, the total output value of China's electronic components industry accounts for about one fifth of the electronic information industry, and electronic component industrials have become an important foundation for supporting the development of China's electronic information industry.

Market Scale Forecast of China's IC Industry in 2020-2025

Data source: public data collation

Electronic components belong to the branch of semiconductor industry, and the development of the industry conforms to the development of the semiconductor industry. From the perspective of global semiconductor development history, each cycle has its own driving force for terminal applications. Take the Philadelphia Semiconductor Index as an example. The commercial use of personal computers led to the semiconductor upswing in 1994-1995, especially the demand for computer memory (DRAM), which led to the shortage of DRAM supply. After that, the expansion of DRAM production capacity led to overcapacity, which led to a downturn in semiconductors. The popularity of personal computers and the launch of mobile phones drove the rise of semiconductors in 1996-1997, followed by the collapse of the Internet bubble, which led to a downturn in 2000-2002.

Since 2003, the listing and popularization of consumer electronics has become the main driving force for the rise of semiconductors, while inventory adjustment is the main reason for the decline. After peaking in mid-2007, the index bottomed out in 2008 under the double blow of the financial crisis and the destocking of downstream customers. Since then, with the global economic recovery and the rise of the Internet of Things and intelligent equipment, semiconductors have entered a new boom cycle.

The periodic change of electronic components goes through 12 stages. They are: production capacity and supply are greater than demand, industry is cleared, supply is balanced, small disturbance breaks supply balance, small and medium-sized downstream manufacturers are more difficult to purchase, the shortage of non-core varieties is more serious, the gross profit rate of agents is increased, the gross profit rate of agents continues to increase and orders are increased, the original factory remains tight, the original factory expands production capacity, supply balance is re-established, production capacity and supply are greater than demand.

Since 2016, the phenomenon of spreading price rise has emerged in the upstream of the electronic industry chain. Under the disturbance of rising prices of bulk products and raw materials, the withdrawal of some old and backward production capacity has caused an imbalance between supply and demand, and the shortage of non-core varieties has appeared first. For example, the price rise in LCD industry has spread from small and medium-sized to large. The price increase in the LED chip industry has spread from the display end to the white lighting end. Thus, the electronic components industry is in the initial stage of a new cycle, and referring to the previous 4-6 years of cycle span, the industry's prosperity is expected to continue to rise in two years.

Distributors are an important part of the electronic components industry chain. Taking the IC industry in electronic components as an example, the IC industry chain can be roughly divided into several links, such as equipment and raw material suppliers, manufacturers, chip design factories, distributors, solution providers and downstream electronic product manufacturers. Chip designers supply products to downstream electronics manufacturers through direct or indirect sales.

Composition of semiconductor industry chain

According to whether the distribution authorization of the upstream IC design manufacturer has been obtained, IC distributors can be divided into authorized distributors and independent distributors. On this basis, if divided according to the operation mode, there is a mixed distributor with both authorized and independent distribution modes.

Authorized distributor: obtain the distribution authorization of IC products by signing an agency agreement with the IC design manufacturer, cooperate closely with the IC design manufacturer, and obtain the direct support of the IC design manufacture in information, technology, supply, etc. 100% of its product line is authorized by the original factory, which can continuously and steadily supply products to downstream customers, and is one of the main channels for IC design manufacturers to promote and sell products. Technical support capability is one of the important criteria for IC design manufacturers to select authorized distributors. Independent Distributor: No agency agreement with IC design manufacturer. Most independent distributors do not have a specific agency brand, do not have a long-term procurement and supply plan, and their main competitive advantage and value lies in a strong information network and supplier database. This type of distributor has access to inventory from the global supply chain through its own channels, whether from IC design manufacturers, other distributors, or even electronics manufacturers. One of its important roles is to balance the supply chain of the whole market. From the actual operation, finding hard-to-find components for customers, supplying in small batches, and helping customers deal with excessive inventory due to changes in production plans are the main value-added services that manufacturers want independent distributors to provide. Hybrid distributors: In the face of the increasingly diversified market demand for electronic products, in order to meet the personalized needs of customers and provide overall services, more and more IC distributors begin to have both authorized distributors and independent distributors, which are called "hybrid distributors".