Analysis of current situation, downstream market demand and trend of precision structural parts manufacturing industry in China

1, precision structural parts industry development overview

Precision structural parts refer to metal or plastic parts with high dimensional accuracy, high surface quality and high performance requirements and can play a role in protection, support or heat dissipation. Precision structural parts and functional parts such as electronic parts and mechanical parts can be assembled in a certain way to obtain the end product. As an intermediate product, precision structural parts and other functional parts should be fully matched during product assembly, and there are high requirements for precision and quality. According to the difference of forming materials, precision structural parts mainly include precision metal structural parts and precision plastic structural parts.

(1) Overview of precision metal structural parts

According to the "2021 China precision structural parts manufacturing market Analysis Report - Industry competition pattern and Prospect assessment forecast" released by the research Report network. Precision metal structural parts manufacturing integrated use of computer technology, new material technology, precision manufacturing and measurement technology and other modern science and technology, you can choose pressure casting, investment casting, extrusion casting, model forging, stamping cutting, powder metallurgy and other different forming processes to process metal materials into a predetermined shape or size of the product. The commonly used forming processes in the production of precision metal structural parts include die casting, forging, profiles, stamping and powder metallurgy, etc., and the structural parts products under different forming processes have different characteristics.

(2) Precision plastic structural parts

Precision plastic structural parts manufacturing integrated use of computer technology, polymer material technology, precision manufacturing and measurement technology and other modern science and technology, the plastic material heating into a semi-solid, through injection molding, blister, blow molding and other different molding processes into a specific size of the product. The molding process of precision plastic structural parts in the production process includes injection molding, blister and blow molding, among which, the structural parts products using injection molding process have the advantages of complex structure, high strength and high precision.

With the continuous progress of material science, engineering plastics in strength, impact resistance and heat resistance and other performance indicators continue to improve, as well as the development of modified plastics with conductive, wear-resistant, radiation resistance and other characteristics, the use of precision plastic structural parts is increasingly widespread, to plastic instead of wood, plastic instead of steel trend is becoming increasingly obvious.

2, precision structural parts manufacturing industry characteristics

In recent years, China's precision structural parts manufacturing industry has shown the characteristics of accelerated import substitution, intelligent manufacturing to drive industrial transformation and upgrading, and downstream customers' demand for product integration and research and development synchronization has been increasing.

3, precision structural parts manufacturing industry downstream market demand situation and trend

In terms of the industrial chain, the upstream of China's precision structural parts manufacturing industry mainly includes the production and manufacturing of metal materials, plastic materials, molds and production equipment, and the downstream industries include photovoltaic, security, automotive, consumer electronics, communications, aerospace, industrial automation and other application fields.

(1) Photovoltaic industry demand and development trend

Photovoltaic is short for solar photovoltaic power generation system, it is a new type of power generation system that uses the photovoltaic effect of solar cell semiconductor materials to directly convert sunlight radiation into electrical energy, and is an important way to use renewable energy. The photovoltaic inverter is the brain of the photovoltaic power generation system, the most important function is to convert the direct current generated by the solar panels into the alternating current used by home appliances, and track the maximum output power of the photovoltaic array, and feed its energy into the grid with the least conversion loss and the best power quality. The demand for precision structural parts in the photovoltaic industry mainly includes inverter structural parts, wire components and photovoltaic brackets.

1) The global PV inverter market is growing steadily

According to the data released by the Research Report network, as of January 2020, about 200 countries have jointly participated in the signing of the Paris Climate Agreement, and the participating countries need to formulate and implement greenhouse gas emission reduction plans according to the agreement, which is expected to further promote the development of the global photovoltaic industry. Therefore, driven by the great development of the global photovoltaic industry, the photovoltaic inverter market has maintained a rapid development trend. According to WoodMackenzie data, global PV inverter shipments rose rapidly, from 59.7GW in 2015 to 126.74GW in 2019, with a compound annual growth rate of 20.71%.

2) China's photovoltaic inverter industry competitiveness

Since the 1990s, a number of multinational photovoltaic inverter manufacturers such as solar power supply and SMA have risen rapidly, occupying a major share of the global market. According to WoodMackenzie data, the total shipments of the world's top 10 suppliers of photovoltaic inverters account for 73% of the global market; Among them, Chinese enterprises occupy 5, accounting for 47% of the market share.

3) The development trend of photovoltaic industry

In the future, driven by the rapid growth of the photovoltaic industry, China's photovoltaic inverter manufacturing industry has developed rapidly, and the demand for precision structural parts industry will continue to increase.

① The improvement of photoelectric conversion efficiency is conducive to the growth of the market, and the development potential of photovoltaic power generation is huge

According to ITRPV (International photovoltaic technology line) data, PERC technology application in the market in 2019 has accounted for nearly 49%, becoming the most widely used technology for batteries, and the average photoelectric conversion efficiency of PERC batteries is about 22.60%, approaching its theoretical limit efficiency of 24.60%.

In recent years, the technological progress and industrial upgrading of the photovoltaic industry have accelerated, the commercialization level of photovoltaic power generation has been maturing, and the cost of photovoltaic power generation has been lower than that of conventional energy in many countries and regions, and it is accelerating the realization of large-scale "affordable Internet access" from point to point. With the reduction of photovoltaic module costs and the improvement of photoelectric conversion efficiency, photovoltaic power generation prices are expected to further reduce, according to Bloomberg new energy data, the United States with tracking system photovoltaic power plants, the cost of electricity has been lower than natural gas power generation. According to ITRPV forecasts, with the arrival of the era of "affordable Internet access", driven by market factors, the global annual installed capacity will climb to 660GW by 2030, and the global cumulative installed capacity will reach 9170GW in 2050, in the context of the global energy system to accelerate the transition to low-carbon, photovoltaic industry has great potential for future development.

(2) The globalization process of the photovoltaic market continues to advance, and inverter manufacturers accelerate the globalization layout

As of the end of 2017, more than 67 countries in the world have introduced market-oriented bidding model in the construction of renewable energy, including Europe, the United States and the Middle East and other regions of the photovoltaic power plant bid price has been lower than the local thermal power price, the rapid growth of photovoltaic installed demand in overseas markets.

In addition to the domestic layout of China's photovoltaic enterprises, the product manufacturing supporting system in Vietnam, Malaysia, Thailand and other Asia-Pacific regions is also relatively perfect, and through overseas investment to set up factories, overseas enterprise mergers and acquisitions, adopt a localized production strategy to accelerate the evolution of the international photovoltaic production pattern. Therefore, in the future, with the maturity of China's inverter products in terms of technology and conversion efficiency and obvious advantages in terms of cost performance, the domestic excellent inverter manufacturers will accelerate the global layout.

According to the data, China's overseas exports of photovoltaic modules maintain a high level, overseas demand is strong, the prosperity is high, the globalization process of the photovoltaic market continues to advance, and the total export amount in 2019 reached 2.341 billion US dollars.

(3) The development trend of intelligent photovoltaic products and building compatibility

With the gradual strengthening of global building environmental protection awareness, developed countries such as Europe and the United States have put forward the development goal of nearly zero energy consumption of buildings, and China has also proposed in the "13th Five-Year Plan for building energy efficiency and green building development" that the proportion of urban green building area will exceed 50% by 2020. At the same time, with the strong support of national policies, BIPV, as an important technology application to achieve the goal of zero energy consumption buildings, will enter a period of rapid development, and the future market space is huge. This trend change of photovoltaic and building compatibility will continue to improve the degree of integration of photovoltaic products, and put forward higher requirements for the application of precision structural parts in photovoltaic products.

(2) Security industry

1) Global security video surveillance market

Globally, the security equipment market has generally maintained a stable development trend. According to IHSMarkit data, the global professional video surveillance market reached $19.9 billion in 2019, an increase of 9.34%, and a compound growth rate of 6.58% from 2014 to 2019.

2) China security video surveillance market

In recent years, in August 2005, the Ministry of Public Security proposed the construction of "3111 pilot project", which promoted the construction of "safe city". And in the "smart city", "intelligent transportation" and "2008 Beijing Olympic Games", "2010 Shanghai World Expo", "2010 Guangzhou Asian Games", "2011 Shenzhen Universiade" and other major projects and projects to promote, China's security industry set off the first wave of rapid development. Data show that the market size of China's security industry increased from 540 billion yuan in 2016 to 756.2 billion yuan in 2019, with an annual compound growth rate of 11.9%, and the market size is expected to reach 904.9 billion yuan in 2021.

At the same time, with the gradual maturity of the global security market, the Asia-Pacific security product manufacturers represented by China are rich in technical talents and have low labor costs. In this context, the European and American security giants have shifted their manufacturing centers to the Asia-Pacific region, and China has become one of the preferred regions for major enterprises. According to the "a&s Top 50 Global Security" released by a&s in 2020, Hikvision ranked first in the video surveillance industry in the world for nine consecutive years, and Chinese enterprises have occupied four seats in the top ten.

3) Security video surveillance industry development trend

① Rigid demand to promote the development of the global market, the future growth potential is huge

Since 2016, under the framework of deep learning, core algorithms such as portrait recognition and video structuring have been major breakthroughs, at the same time, Internet technologies such as cloud computing and big data have been gradually introduced into the security industry, and are currently in the rapid development stage of intelligent monitoring and security. According to IHSMarkit, the global professional video surveillance equipment market will experience strong growth driven by strong demand in public safety and business intelligence.

At the same time, in terms of specific application areas, according to BIS data, the infrastructure sector occupies the largest share of the global video surveillance market, followed by the commercial sector, with a share of 37.3% and 6.1%, respectively. According to the forecast, in 2018-2023, the two application areas are expected to develop at an annual growth rate of 15.6% and 16.6%, respectively, and the growth of these rigid demands will promote the rapid development of the video surveillance industry.

The domestic security market demand is strong, intelligent development has brought new opportunities, and the civilian market has become a new growth point

At present, China's security monitoring market is mainly concentrated in government departments and finance, public security, transportation, electricity and other special departments and industries, but with the improvement of people's living conditions and the strengthening of security awareness, residents will pay more attention to security issues.

In addition, the combination of the Internet and the security industry continues to help traditional security enterprises open the civil security market at the technical level, so that the home security system can form a security monitoring network with intelligent locks, intelligent cameras, infrared intrusion detectors, sound and light alarms and other equipment. According to the data of the Pacific security network, domestic civil security accounts for about 11% of the overall security market at this stage, compared with 50% of the civilian security penetration rate in the United States, China's civilian security penetration rate is still low, and the future security industry market has a lot of room for growth in the civilian field.

③ The domestic security industry has entered a period of integration, and leading enterprises have benefited

With the advancement of the intelligent process, the influence of software platforms and video algorithms in hardware products will gradually increase, and the integration of software and hardware will become more and more obvious. Software competition is more favorable to companies with large scale and strong comprehensive layout ability, such as Hikvision and Dahua Shares. On the one hand, the above situation is conducive to leading enterprises to carry out market integration and upstream and downstream integration of the industrial chain, and on the other hand, leading enterprises can give full play to their scale advantages and obtain more industry discourse and pricing power.

According to the Ultra-high-definition Video Industry Development Action Plan (2019-2022) released by the Ministry of Industry and Information Technology, China will accelerate the development and mass production of ultra-high-definition surveillance cameras and promote the upgrading of security monitoring systems. With the continuous improvement of the concentration of the security industry, the upgrading rate of security products, the upstream and downstream of the industrial chain will also be highly integrated, and the companies of the whole industrial chain layout will occupy a huge advantage in the competition, and local leading enterprises will benefit from it.

3. The automotive industry

In recent years, with the rapid development of the national economy, driven by the state's strong support for the development of the automobile industry, the improvement of industrial technology level and the prominent effect of the automobile industry cluster, China's automobile production and sales have shown an overall growth trend, and gradually become the world's automobile manufacturing center. In addition, as one of the important development directions of the automobile in the future, China's new energy automobile industry has ushered in explosive growth. According to the data, in 2020, the output of China's new energy vehicle industry will reach 1.366 million, and the sales volume will reach 1.367 million. As of January to September 2021, the national production and sales of new energy vehicles have completed 2.166 million and 2.157 million, respectively, an increase of 1.8 times and 1.9 times year-on-year.

3) Automotive industry development trend

The steady development of the global automobile industry, the strong demand for new energy vehicles and the increase in the penetration rate of aluminum alloy die-cast structural parts and injection molded structural parts have injected impetus for the sustainable development of the precision structural parts industry.

The global new energy vehicle market demand continues to grow, and the industry has a large room for growth

With the deepening of countries' attention to environmental protection, technological progress and energy security, the application of internal combustion engines, which consume a large amount of fossil energy, in the field of highway transportation is gradually being replaced by various power systems using other energy sources, and the new energy automobile industry with electric technology background has ushered in a good opportunity for development, and the global new energy automobile market has witnessed explosive growth. The penetration rate of new energy vehicles in various countries and regions continues to increase.