China: Electro-acoustic components poised for fast growth

China is the biggest electroacoustic component manufacturer in the world. It exports electro-acoustic components to different countries, including the US, UK, France, Germany and Japan. In 2005, China produced six billion electro-acoustic components (data from the Information Industry of China), driven primarily by the healthy mobile communications market.



"The annual growth rate of China’s electro-acoustic component market is 20 percent," said Runli Wang, secretary general of China Electro-acoustic Component Trade Association (CECTA). "Exports in 2005 reached 4.5 billion units, with an estimated profit of $3.8 billion. And from January to September 2006, exports already reached 3.77 billion units, with revenue of $3.263 billion."WORLD, LOCAL MARKETS

The electro-acoustic components' main markets are home cinema systems, MP3 players, PCs, notebooks, handsets, and auto loud hailers.







The global handset production will increase to 95 billion units in 2008 from 65 million units in 2004, forecasted IDC. In every handset, there is one mini-microphone, one mini-loud hailer and one minisound device. Hence, the mobile phone market alone will ramp up electro-acoustic component demand to exceed two billion units.



The DVD recorder market, which has a CAGR of 153.8 percent in 2006, will also boost demand for electro-acoustic components, particularly audio speakers.



TAT Electronics is a company that produces acoustic components for more than 10 years now. It manufacturers products such as electromagnetic and piezo transducers/buzzers, mylar speakers, loud speakers, and alarm parts.



"Our products are mostly exported to overseas. Recently, however, our local customers are growing. They are mainly manufacturers of communications and digital products," said Jiang Yin, general manager of TAT Electronics. "The domestic market has become more mature since 2005. We will enhance our investments in the local market."



CHALLENGE

The electro-acoustic components manufactured in China are mostly middle and low-end products. A major issue limiting local manufacturers to compete in the high-end market is that the key raw materials—fittings, main manufacture equipment, and inspection instruments—are imported. For example, there's a shortage of buzzer materials in China.



Wang suggests that the electroacoustic component industry must grasp innovation, follow efficient management, and cultivate an image as a high-tech manufacturer. "We believe that with local manufacturers’ effort and the government’s help, China's electroacoustics component technology will be at par with the rest of the world."