Crystal Components

2005 is a banner year for the crystal components industry in Hong Kong. Market conditions are very strong at the moment because the economy is good and the demand for electronic products is also increasing. “This year most companies in the crystal business are doing extremely well,” says William Beaver, president of Interquip Electronics Co. Ltd. This is especially true for quartz crystals. “As soon as capacity is expanded we are totally sold,” he says.



Celina Wat, sales manager of Jiakang Ceratronics Ltd thinks that demand for crystal components will come mainly from wireless communication devices such as wireless mouse and wireless keyboard. “GPS will be a hot item in the coming year,” she says. Wat says that there is a surge in demand for small size SMD components like SMD ceramic resonators and ceramic filters that are used in LCD TV tuners, TV sets and settop box, among many others.



Most makers can supply a wide range of ceramic devices with small footprints. “We are able to supply small and extra small size SMD ceramic resonators and ceramic filters which most of the manufacturers in Mainland China cannot produce,” says Wat. A case in point is Jiakang’s ZTTCV series of SMD ceramic resonators, which measure 3.7 x 3.1 mm, and extra small size SMD ceramic resonator in the same series, which measure 4.5 x 2.0 mm. Small size 10.70 MHz ceramic filters measuring 3.45 x 3.2 mm are also available.



Interquip produces a whole series of ceramic filters but has made a breakthrough in developing quartz crystals. “The encapsulating structure is made of crystalline quartz having the same crystal graphic orientation as a resonator element,” says Beaver. The company is not dependant upon any outside manufacture for the encapsulating structure. “Contrary to the ceramic part we can make 100% of the quartz part,” he adds. Typical applications for quartz crystals include microprocessor grade-type applications, for instance digital cameras. Interquip’s surface mount quartz resonators are available under SMAQ-5032, SMAQ-6035, SMAQ-7050 and SMAQ- 1045. Typical frequency tolerance for all devices at 25ºC (±3ºC) is ±30 ppm. The load capacitance is Fund:10 pF toinfinity. Frequency temperature characteristics for all devices are ±30 ppm.



In spite of the highly competitive nature of the market there is always plenty of supply for crystal components. But despite the abundant supply prices are not going south. “This year prices will stabilize as compared to last year and the previous years,” says Beaver. One reason, he says, is that prices have hit an all-time low already so there’s not too far to go. Jiakang’s Wat concurs. Prices will remain the same, she says. She is quick to point out though that as per market forecast, the reminbi will appreciate around 5 to 10% in 2006. “Manufacturers in [mainland] China will suffer an exchange loss of between US dollars and reminbi if they do not raise their export selling prices,” she says.







Wat thinks, however, that most of the manufacturers will not raise prices but will maintain them at the same level of 2005.



Although China - based makers resort to drastic price cuts, in reality it is the customers who are pushing down prices, says Beaver. “Customers are pushing hard for lower prices. And basically customers have in the past employed compliant suppliers in China who needed the business and who were willing to supply at lower costs and have used those particular suppliers to beat down quality houses.”



Beaver laments that it is unfortunate that there are companies still in China that are offering to produce more cheaply. “Having said that, customers are always on the lookout for product quality, product reliability and on time delivery, not the cheapest prices.”



But if prices are at a standstill, the cost of raw materials has gone up during the past two years. “Next year, raw material costs should show no obvious increase and costs would be the same as 2005,” Wat maintains.



When it comes to product quality, customers still believe that devices from Japan are the best, says Tommy Wong, sales manager of Technical Crystal Ltd. Jiakang’s Wat agrees but clarifies that although the quality of China made devices is not as good as those from Japan, the quality is not that bad. “Some customers who produce toys do not need A-grade components,” says Ivan Wai, senior marketing executive of Technical Crystal (China) Ltd.







Hong Kong makers export their crystal components to many countries in Asia, Europe and the US. “Besides Europe, the Middle East, the US and Asia are strong markets for us,” says Gary Yeung, manager of Abundance Enterprise Co. “Our quality is better than those made by mainland companies,” he says. Besides the US, Interquip also sells most of its production in the mainland. “There are many OEMs in China,” Beaver says and claims TCL and ZTE as some of its top customers in the mainland.