Since 2021, there has been news in the upstream ceramic substrate supply chain of chip resistors that Japanese manufacturers have faded out. Lost to the competitive pressure of Chinese mainland and Taiwan manufacturers, a Japanese manufacturer drastically reduced the supply of alumina ceramic substrates, only serving long-term customers in Japan, and shifting production capacity to aluminum nitride substrates and other applications. The industry expects that Chinese manufacturers will take advantage of the transfer order effect, and ceramic substrates will also enter a highly oligopolistic golden age.
Ceramic substrates account for 20% of the cost of chip resistors and are key raw materials. In the past 30 years, due to fierce competition in the chip resistor industry, resistor factories are in fierce knock-out competitions, which has caused the upstream ceramic substrate supply chain to face great shocks. At present, the main supply chains outside China include Chaozhou Sanhuan, Jiuhao, Hokuriku, Maruwa and other manufacturers.
It has been reported in the industry that a Japanese manufacturer has accelerated the fading out of alumina substrates since last year due to the competitive pressure from China mainland and Taiwan manufacturers. The supply volume has dropped sharply from 10 million pieces per month to 3 to 4 million pieces, with only production capacity. It only serves specific Japanese long-term contract customers. Last year, the factory also offered price cuts to clear inventory, and its production capacity shifted to more difficult products such as aluminum nitride. In this regard, the resistance factory is not surprised by the intentional withdrawal of the Japanese manufacturer, indicating that the withdrawal of the Japanese ceramic substrate factory is only a matter of time.
The ceramic substrate industry is special. In a harsh competitive environment, if there is no guarantee from downstream chip resistor factories, most of the ceramic substrate factories are unwilling to invest in expansion. Therefore, the trend of the ceramic substrate industry is evergrande, and the trend of oligopoly surpasses wafers. In the resistance industry, the total global market share of chip resistance factories in Taiwan, China is about 70-80%. The total number of ceramic substrates in the world's largest Chaozhou Sanhuan and the second largest Jiuhao accounted for about 65-75% of the global market share. Now that Japanese manufacturers have faded out, the oligopoly will be strengthened.
UNIPRETEC is also actively deploying related work. A new alumina substrate production line that our company is invested in mid-2021 and will soon form a stable production capacity in the next three months.
