According to the Transparency Market Research, the global connected car market is expected to reach US$131.9 billion by 2019 continuing to maintain its steady growth. Businesses are scrambling for a share of the automotive electronics market in recent years. Lelon Electronics, Taiwan's No. 1 manufacturer of aluminum electrolytic capacitors, entered the market at an opportune time and have secured their place in the OEM supply chain of American and European automakers. As the automotive electronics market continues to grow, Lelon is confident in sustaining its business model and market share in the second half of the year.
Jimmy Wu, General Manager of Lelon Electronics, noted that automotive LCD panels used to be installed only in luxury cars. However, due to increased importance being placed on vehicle safety, even entry-level cars are now coming equipped with a variety of sensors to collect information, then processed and displayed on LCD monitors. Lelon is one of the select few non-Japanese manufacturers of aluminum electrolytic capacitors that are capable of being used in automotive applications. Their products now recognized by leading international automotive electronics companies. The automotive electronics market accounted for 9% of Lelon's 2016 revenue and is expected to increase to 10% in 2017. Lelon plans to introduce aluminum electrolytic capacitors for automobile transmission systems in the future to expand Lelon's automotive applications product line.
Focusing on the development of high-end capacitors to build up the company's position
Founded in 1976, Lelon has engaged in the R&D, manufacturing and sales of aluminum electrolytic capacitors for over four decades. In order to provide comprehensive services for their customers, Lelon expanded into upstream material production of formed aluminum foil and automated production equipment. Through vertical integration of upstream and downstream manufacturing, Lelon is strengthening its competitive edge in technology, quality, cost, and service. Lelon now has complete offerings of aluminum electrolytic capacitors, including aluminum electrolytic capacitors (radial, SMD, snap-in, and screw terminal), organic conductive polymer capacitors, and conductive polymer hybrid aluminum electrolytic capacitors, which are widely used in automotive electronics, telecommunication equipment, cloud computing, and power electronics. Its quality products and services are highly regarded by their customers.
Last year, Lelon's major revenue generators included power electronics, telecommunication equipment, automotive electronics, and consumer electronics. With the company transitioning from mid-range to high-end markets, it plans to reduce its share of products used in consumer electronics due to the fiercely competitive pricing environment. Instead focusing its efforts on aluminum electrolytic capacitors for high-end electronics, which are used in automobiles, telecommunication, healthcare, green energy, smart grid, and cloud computing.
Wu further commented that the rising demand for consumer electronics, especially flat-panel TVs, smartphones, and tablets, drew a large number of companies to expand into the production of aluminum electrolytic capacitors. However, as prices of consumer electronics continue to fall, passive component markets have become "red oceans" where many vendors have resorted to price-cutting and have sacrificed quality for cost. If Lelon were to use its resources on low-end products with little margin, it would eventually impact its overall profitability and competitiveness. Lelon has always insisted on delivering premium quality products since its establishment.
Actively engaging in new technology development and vertical integration
Lelon has been able to come out ahead in the competitive market of aluminum electrolytic capacitors due to their long-term devotion to the R&D of advanced technologies. In addition to their own professional R&D team, they have also hired technical consultants from Japan to help refine their technology and quality systems. Furthermore, Lelon has been collaborating with Industrial Technology Research Institute to jointly research critical technologies and participate in the research of material suppliers and customers in order to develop products that cater to market needs.
Lelon has generated impressive results in terms of its patents. It has obtained multiple patents in Taiwan, China and Japan, including ones for a V-chip vibration-proof back plate, a vibration-proof capacitor, a capacitor electrolytic solution with heat resistance and high spark voltage, electrolytic capacitors with optimum cooling, and horizontal capacitors. With growing public awareness of the need to protect the environment and an increasingly strict enforcement of environmental protection laws, the supply of aluminum foil for aluminum electrolytic capacitors has become rather limited. Wu pointed out that in an attempt to minimize the impact of market instability and maintain a steady supply for its customers, Lelon had already begun to search for new material suppliers prior to the Japan 3/11 earthquake and conducted testing on a variety of materials in order to understand the characteristics of the materials and the type of capacitors they were suitable for.
Demand for polymer capacitors is rising with exciting developments in quick charging
A growing number of mobile devices such as smartphones and tablets now feature quick charging, which requires the use of matching quick chargers. Quick chargers must meet more stringent requirements than conventional chargers and need polymer capacitors to match product design specifications. Polymer capacitors are also used in cloud computing equipment, telecommunication equipment, and power supplies. Lelon has accumulated years of experience in manufacturing polymer capacitors and will be able to produce close to 100 million polymer capacitors per month. This number includes the monthly capacity of 60 million polymer capacitors produced on the equipment acquired from Matsuki Polymer last year, and Lelon's original monthly capacity of 35 million polymer capacitors. After the completion of this expansion, which is expected to happen this year, Lelon will become a leading manufacturer of SMD polymer capacitors made outside of Japan. Benefiting from an increasing market demand, polymer capacitors will become a major revenue growth driver for Lelon this year.
Wu remarked that Lelon has adopted a flexible production approach. It is able to quickly adjust the production line according to order changes and thereby meet their customers' delivery schedules. The purchase of Matsuki Polymer's production equipment of polymer capacitors was completed efficiently and economically. This deal will assist in moving up the company's original scheduled date to expand its production capacity and upgrade its production equipment. It will also further enhance the company's competitiveness.
Lelon has made remarkable progress in the market of aluminum electrolytic capacitors and has become a chosen partner of multiple global companies by maintaining its goal of providing premium quality aluminum electrolytic capacitors. As it looks forward to a promising future, Lelon will devote additional resources to the development of high-end aluminum electrolytic capacitors, focusing its efforts on the high-end electronics markets.
Jimmy Wu, General Manager of Lelon Electronics
Lelon focuses on the development of high-end aluminum electrolytic capacitors, and on actively expanding its high-end electronics customer base.