Market Trends of Chip Resistors Industry
Consumer Electronics Segment is Expected to Drive the Market's Growth
- Resistors are one of the most commonly used passive components in electronic circuits because they resist the flow of sudden voltage spikes, which are enough to cause damage to electronic equipment almost instantly. Multiple resistor types find widespread application in consumer electronics such as computers, PCs, and notebooks. Surface-mount chip resistors are tiny and used significantly for printed circuit boards (PCBs) incorporated in smartphones and laptops, and most silicon-printed circuits use them for operations that ensure signals are always right. Also, varistors, often described as movistors (a contraction of the words metal oxide varistor), are among the resistors available in various forms. They are significantly utilized in the surge or transient-protected mains extension to protect computers by varying the resistance with the applied voltage.
- Chip resistors are widely used in smartphones as a passive electronic component that limits the flow of direct current in a circuit. For example, smartphones can use up to 400 chip resistors, which are also used in other electronic devices such as laptops, tablets, and televisions. As smartphones become thinner and lighter, the demand for smaller and lighter chip resistors also increases. Tantalum capacitors are small, making them suitable for use in small-footprint applications like smartphones. According to Ericsson, the global number of smartphone mobile network subscriptions reached over 6.6 billion in 2022 and is expected to hit 7.8 billion by 2028. The countries with the most smartphone mobile network subscriptions are China, India, and the United States. Such a huge rise in smartphones would drive the market.
- Further, chip resistors, which are small and compact, are commonly used in computers and peripherals for various purposes, such as providing high precision and stability, protection, control, and operation of circuits. Chip resistors can be made from metal foil, metal oxide film, carbon composition, thick and thin film, or wire-wound resistors, among others. They are mainly designed to provide resistance and reduce the flow of electric current in circuits. Chip resistors are essential components in electronic circuits and are widely used in computers and other electronic peripherals.
- According to the National Bureau of Statistics of China, China produced over 32.66 million completed computers in April 2022. Further, according to the Ministry of Electronics and Information Technology, the value of computer hardware output in India was around INR 215 billion in the fiscal year 2020. In the fiscal year 2021, this was expected to rise to INR 220 billion. The value of computer accessories produced in the country has been steadily increasing. Such huge spending on computer production will create an opportunity for the tantalum capacitor manufacturers to expand their product portfolio.
- Players in the market are launching resistors specifically for consumer electronics. For instance, recently, Bourns Inc. announced the CFN metal foil current sense resistor series expansion. The addition of the two latest model sizes expands the series to four different footprints. The new 0402 and 0603 models complement the existing 0805 and 1206 sizes. The use of a metal foil resistive element in these chip resistors results in significantly low inductance, low noise, high reliability, and very low resistance values down to 5 milliohms, making them suitable for current sensing in consumer electronics.
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Asia-Pacific Region is Expected to Witness Significant Growth
- The Asia-Pacific region is one of the most significant manufacturers of electronics and automotive products. In January 2021, China's Ministry of Industry and Information Technology released an action plan to develop the country's electronic components industry from 2021 to 2023. The action plan aims to achieve technological breakthroughs in areas including circuits, connectors, sensors, and optical communication components to enhance the position of Chinese companies in the industrial supply chain and ease supply reliance on high-end foreign products. This plan is anticipated to unlock new opportunities for industry players in the region.
- Many electric cars, including hybrid and plug-in vehicles, use chip resistors as part of their electrical systems. These tiny electrical devices limit the flow of current and are important for managing the vehicle's power consumption.
- According to the China Association of Automobile Manufacturers, China produced almost 2.9 million battery-electric vehicles in 2021, up 166% from the previous year. Around 601,000 plug-in hybrid vehicles were produced in China in the same year, up 131% from the year before. Such huge production of electric cars would create an opportunity for the studied market to grow.
- Moreover, chip resistors are widely used in the defense industry in various electronic applications such as radar systems, missile guidance systems, electronic warfare systems, and communications equipment. These resistors are designed to meet the challenging requirements of defense applications, such as high precision, reliability, and ruggedness. The defense industry in the region relies heavily on on-chip resistors, and many companies specialize in producing these components for the defense industry. Some examples of chip resistor manufacturers that serve the defense industry include IMS Resistors, Ohmcraft, and Spectrum Control. The upsurge in demand from the defense sector in the region is anticipated to boost the growth of the studied market.
- In February 2022, the Finance Minister of India allocated INR 525,166.15 crore to the Ministry of Defense for the fiscal year 2022-23. This represents an increase of INR 46,970 crore, or 10%, over the previous year's allocation of INR 478,196 crore and the most significant rise in the defense budget in recent years. Such huge spending on defense would create a lucrative opportunity for the players in the market to develop new products to capture market share.
- The trading of resistors in countries like India is witnessing an upsurge, especially with surging demand for current sense resistors. However, thin film and chip resistors currently have relatively lower demand in the Indian market. This trend indicates the lack of specialized electronic product manufacturing in the country that uses such resistors. However, most manufacturers still perceive that the future of resistor manufacturing lies in thick film and chip resistors. Moreover, the major manufacturer of the resistor has ceased taking orders as the raw material cost is spiking up. For instance, recently, Taiwan-based Ralec ceased taking new resistor orders. At the same time, Leatec Fine Ceramics, a maker of aluminum and ceramic substrates required for manufacturing chip resistors, is considering raising its prices in the wake of a recent 15% price hike enforced by its Chinese peer, Chaozhou Three-Circle Group.
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