In contrast to the maturing smartphone and tablet markets, the automotive electronics market continues to show promising growth. Leading inductor maker Chilisin is already delivering impressive sales figures in the mobile device market. As the use of inductors increases with smartphones migrating from 3G to 4G, Chilisin's mini molding chokes and 0201 high-frequency chip inductors have been met with excessive demand. However, in order to maintain a long term growth momentum, Chilisin has been actively pursuing the automotive electronics market and has been seeing significant results in recent years, which is expected to drive the next wave of growth.
Automotive electronics market to show high growth potential
Let the numbers do the talking. According to a Gartner report, global tablet shipments in 2014 only reached 216 million units. An IDC research indicated worldwide tablet shipments grew from 144.5 million units in 2012 to 229.3 million units in 2013, up 58.7%. Growth of tablet shipments significantly slowed down in 2014, and is expected to increase only 8% in 2015. Automotive electronics, on the other hand, is a booming segment with production value estimated to grow from US$19.75 billion in 2013 to US$ 23.88 billion in 2015, according to Strategy Analytics.
In face of massive growth potential in the automotive electronics market, Chilisin has laid the groundwork for a strong product portfolio focused on power inductors and molding chokes for the automotive sector. Notably, power inductors with magnetic shields are able to satisfy the low DC resistance and large current required by automotive power supply systems. Compared to traditional power inductors with base structures, Chilisin's SLF (closed magnetic circuit) power inductor series adopts a design without base so that costs are reduced by 15% while maintaining resistance properties superior to that of its traditional counterparts.
Compatible new designs to overcome high market barriers
Chilisin's SLF power inductors are designed to be completely compatible with components supplied by Japanese players, who have long been dominating the automotive electronics segment. With this compatible layout design, automakers are able to seamlessly switch to Chilisin's SLF power inductors without having to modify their original circuit design. As opposed to consumer electronics, automotive component designs are rarely changed, and selection or replacement of suppliers usually undergoes long-term verification process. Because of this, it has been traditionally difficult for newcomers to penetrate the automotive electronics market. However, Chilisin has successfully overcome the high barrier of the automotive electronics market by offering product compatibility with mainstream products and setting competitive pricing strategies, states a Chilisin executive.
In a similar fashion, Chilisin also provides innovative power molding chokes differentiated from traditional power inductors for engine start-stop systems. In contrast to regular molding chokes which are designed with wired pads, Chilisin's molding chokes are designed with lead frames to deliver superior vibration test performance, ideal weldability, and smoothness under the AEC-Q200 test standard. Several of Chilisin's power inductor series and chip ferrite beads are also in full compliance with the automotive industry's stringent requirements on electronic components and have obtained AEC-Q200 certification, which is a stress test standard for passive components used in automotive applications. Currently, Chilisin's products with AEC-Q200 qualification have been successfully approved by a number of world-class chipset design houses such as Broadcom.
As the newest addition, Chilisin plans to expand its ultra-high efficiency inductor (UHEI) series and MTFA 2-in-1 inductor array products to automotive applications in order to offer the automotive industry alternative solutions with high efficiency and exceptional features.
Revenue contribution from the automotive market on the rise
Compared to consumer electronics which require light-weight, miniature components, automotive electronics demand reliability and endurance in extreme environments such as lasting durability at 150°C. Due to the fact that Chilisin has its own powder-making plant, Chilisin has been able to provide inductors that combine reliability and competitive cost structure. With this vertical integration into powder-mixing technology, Chilisin is able to offer various product specs and features in a timely manner to satisfy customer needs. Being self-reliant on the material-front has also helped Chilisin achieve competitive product pricing against its Japanese peers.
A Chilisin executive states that Chilisin is actively focusing on several European, Asian, and American automakers and expects revenue growth from the automotive electronics market to rise to 5% this year from 3% in 2014. "The increase is still small, but it shows Chilisin's product portfolio strategy is beginning to bear fruit in the automotive market."
