Korea: Price Fall Continues as Production Moves to China

It has become increasingly tough for manufacturers of inverter transformers to meet two challenges simultaneously: smaller transformers that fit into smaller products, while maintaining a high level of safety for users.



Fourcom Tech is one company that has risen up to the challenge. “The transformer is taking more space than other components in a product, therefore OEMs want us to reduce its size. The height of our inverter transformer used to be 10 mm. Today, slimmer models like 6 mm and below are common,” says Lee Yong-Rak, manager for Fourcom Tech.



Fourcom engineers had to find a way to maintain a minimum distance gap between the cores—primary turn of coil and a secondary turn of coil. The core is getting thinner, making it hard to wind evenly. Faced with this, Fourcom uses a machine for even winding.



Demand for inverter transformers has grown rapidly resulting in Fourcom ramping up its monthly capacity by 50 percent in the past year. The company has a 200-employee factory in the Sandong province of mainland China that produces 500,000 to 600,000 units of inverter transformers each month.



The primary demand drivers are LCD TVs and monitors. Makers of these go for the 23 mm or bigger transformers. “There is a continuous demand for these transformers, which is matched by a continuous fall in prices,” says Lee. To reduce cost, some OEM customers, such as monitor makers, are trying to reduce the number of transformers for each product, while others are asking transformer makers for “two-in-one” transformers that are cheaper than buying two separate units.



Demand for flyback transformers (FBT) from CRT display EMs is expected to be strong, as local OEMs such as Samsung and LG have released samples of “Big Slim CRT” displays in recent months. “We once thought that the demand for FBT from CRT line was almost dead. Now, there are signs of a revival, assuming that these OEMs are serious about moving its sample to commercial production,” says Lee Dong- Hyun, deputy general manager of ELIM Corp.



ELIM Tech Corp is one of the top five makers of FBTs and LBTs (laser beam transformer). It supplies FBTs for color TVs (6- to 33-inch), PC color monitors (10- to 20-inch), game color monitors (14- to 38-inch), and VTR camera (3.5- to 17-inch).



Demand for 32-inch or larger FBTs is strong from color TV OEMs. According to Lee, the price for FBTs fell by 10 to 15 percent in the past year, while prices for raw materials have risen.



To meet strong demand, SanHa Coil has increased the monthly production of Pb-free switching mode power supply

transformers at its factory near Yontai, China, by 40 percent, to 1.2 million units. After moving its factory from Korea to China in 2002, SanHa’s Korean operation now focuses essentially on R&D. The company ships back its Chinese-made transformers to customers in Korea. “Given the current order trend, we expect our capacity to maintain its momentum in the year ahead,” says Roh Chul-Ho, director of SanHa Coil.