Barriers to entry in the magnetic components industry

(1) Technology and R&D barriers

In recent years, the pace of technological innovation in the downstream application field of magnetic components has been accelerating, and products have been updated rapidly. The market and customers have continuously put forward new demands. This requires the production company to have the technology research and development capabilities to quickly meet the needs of the corresponding market and customers, and the above-mentioned capabilities often require the production company to invest a lot of money in technology research and development and obtain it through long-term accumulation of design research and development and production process experience.

Based on this, manufacturers need to continue to invest in research and development in terms of funds and talents, and constantly improve their own technical research and development capabilities, so that after customers put forward their needs, they can quickly and efficiently design products that meet customer needs and adapt to rapid changes in the market. This makes the magnetic components industry have high technical and R&D barriers. Barriers in the magnetic components industry

Barriers to entry in the magnetic components industry

Barriers to entry in the magnetic components industry

(2) Production process barriers

Magnetic component products have diverse quality and technical performance requirements, and have high requirements for process design and process control. Reliable and high-performance products can only be produced by matching the design and R&D capabilities of the production company with the production process. Many core technologies also need to be realized through technological processes. The innovation and optimization of production process and the improvement of process technology level come from the accumulation and summary of long-term and large-scale production practice of production enterprises. In addition, the production cost of magnetic components is closely related to the production process. A good production process can effectively improve production efficiency, reduce production costs, and improve business performance. New entrants in the industry face production process barriers due to lack of production practice accumulation.

(3) Customer barriers

Magnetic components have the characteristics of many varieties, many specifications and models, and short delivery time. Manufacturers often need to design and develop closely based on customer needs, and have the ability to respond quickly. Larger-scale downstream customers often have a complete supplier assessment system, comprehensively evaluate the product performance and quality reliability of magnetic component suppliers through various links such as technical inspections, sample tests, and small batch trials. There are strict requirements for production capacity, manufacturing capacity, rapid response capacity, and technical support capacity. Therefore, once a production company becomes a qualified supplier of downstream customers, due to considerations such as time cost, communication cost and product quality risk, customers generally will not easily change suppliers, thus forming a stable cooperative relationship, and the cooperation between the two parties is sticky and stable. strong, thus forming customer barriers to new entrants in the industry. Barriers in the magnetic components industry

(4) Barriers to large-scale production

The scale effect of the magnetic components industry is obvious. First of all, the cost of magnetic components is directly related to the production scale. Only by large-scale production can the fixed costs and various period expenses be effectively allocated, thereby generating benefits; The stronger the capability, the more effective it is to reduce the production cost; thirdly, the large-scale enterprises have sufficient production capacity and optimized equipment and process combination, which can meet the trial production of multiple customers and multiple products, as well as the development and production needs of new products. It is conducive to the expansion of product technology reserves and product lines; finally, downstream customers generally have a large demand for magnetic components. In order to ensure supply efficiency and product quality stability, customers will choose several suppliers for continuous supply. Only enterprises with large-scale production capabilities and rapid response capabilities can enter the mainstream market and become long-term suppliers of well-known customers. In the short term, it is difficult for new entrants to quickly acquire large-scale production capacity and form economies of scale to survive. Barriers in the magnetic components industry

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