Market Trends of Potting Compound Industry
This section covers the major market trends shaping the Potting Compound Market according to our research experts:
Growing Demand for Potting Compound from the Electronics Industry
- In electronics, potting is a procedure of filling a total electronic assembly with a strong or thick compound for high voltage gatherings, by excluding gaseous phenomena such as corona discharge, for resistance to shock and vibration, and the exclusion of water, moisture, or corrosive agents.
- In the potting process, an electronic assembly is placed inside a mold, which is then filled with an insulating liquid compound that hardens, permanently protecting the assembly.
- Potting materials are a permanent protective solution, which will remain an integral part of the unit to protect the electronic assembly, while providing numerous benefits, such as electrical Insulation, enhanced mechanical strength, and heat dissipation.
- The electronics industry is likely to grow significantly in the coming years, owing to the increasing demand for electronic devices, such as semiconductors, capacitors, transformer, and solenoids.
- India is expected to have a digital economy of USD 1 trillion by 2025 and India's Electronics System Design and Manufacturing (ESDM) sector is expected to generate over USD100 billion in economic value by 2025. Several policies such as Make in India, National Policy of Electronics, Net Zero Imports in Electronics, and Zero Defect Zero Effect, offer a commitment to growth in domestic manufacturing, lowering import dependence, energizing exports, and manufacturing. In 2019, the imports from electronics industry declined whereas the electronics production and exports increased for the first time compared to the previous year.
- Furthermore, the number of smartphone users in China is growing rapidly. The number of smartphone users in the country is expected to reach 868.2 million by 2023.
- Hence, owing to the above-mentioned factors, the application of potting compound in electronics is likely to dominate during the forecast period despite of the temporary impact caused by the outbreak of COVID-19.
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The Asia-Pacific Region is Expected to Dominate the Market
- The Asia-Pacific region is expected to dominate the market for potting compound during the forecast period. The rising demand for potting compound from the electronics industry in developing countries, like China and India, is expected to drive the demand for potting compound in this region.
- The largest producers of potting compounds are located in the Asia-Pacific region. Some of the leading companies in the production of potting compounds are Henkel AG & Co. KGaA, ELANTAS Beck GmbH, MG Chemicals, Momentive Performance Materials Inc., and 3M, among others.
- India is a well-recognized consumer electronics manufacturing hub in the world because of its low-cost production, cheap labor, easy availability, low cost of raw materials, and a weak currency.
- Indian electronics market is expected to reach USD 400 billion by 2025. Additionally, India is expected to become the fifth-largest consumer electronics and appliances industry in the world by 2025.
- The electric vehicle market struggled last year before the pandemic. The change in the thinking of consumers has started to drive the market for energy vehicles after the pandemic. According to the China Passenger Car Association, EV sales in China fell to 11,000 units in February 2020, a drop of about 77% over the last year, thus, marking the eighth straight monthly decline in EV sales in China. However, the sales, as well as production of new energy vehicles registered new highs from April 2020. According to the China Association of Automobile Manufacturers, the production of new energy passenger and commercial vehicles reached 111,900 vehicles till November 2020. Additionally, the sales of new energy vehicles till November 2020, reached 110,900 vehicles registering a 3.9% year-on-year growth.
- The National Development and Reform Commission (NDRC) of China announced that the restrictions will be loosened on the automobile market, and appropriate subsidies will be provided to boost rural sales of some vehicles, as well as the purchase of new energy vehicles, which will in turn boost the demand for potting compound from the automotive industry.
- Owing to the above-mentioned factors, the market for potting compounds in the Asia-Pacific region is projected to grow significantly during the study period. However, due to the recent outbreak of COVID-19, the market is expected to witness a sluggish growth , which is expected to recover in the coming years thereby driving the makret studied
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