Abstract:The scale of China's filter market is gradually expanding, benefiting from the growth of electronics, semiconductors, medical, optical communications and other fields. Especially in the fields of 5G communications, artificial intelligence, optical sensors, and life sciences, the demand for optical filters is increasing. Chinese filter manufacturers have made significant progress in technological innovation, continuously improving the precision, performance, and manufacturing efficiency of their filters to meet the changing market demands. Nanotechnology, multi-layer film coatings, and advanced material selection are key technological trends in this area. The market size and output value of China's filter industry are rising rapidly, and the market size of China's filter industry will be about 41.475 billion yuan in 2022, and the output value will be about 39.053 billion yuan.
1. Definitions and Classification
Filters are optical devices that are used to select the desired band of radiation. One thing that filters have in common is that there are no filters that make celestial images brighter, because all filters absorb certain wavelengths, making objects darker.
Second, the business model
1. Production mode
Due to the differences in the design requirements of different models of smart phones, the downstream customers of filter companies have different requirements for the film, performance, and size specifications of infrared cut filters, so filter companies mainly adopt the "sales to production" model and determine the production plan according to customer orders.
2. Sales model
The company adopts the direct sales model, the company and the customer will generally sign an annual supply framework agreement, the product quality, pricing method, transportation method, settlement method, contract term, liability for breach of contract and dispute resolution and other matters to agree, on the basis of the above framework agreement, the customer signs an order at each purchase to agree on the specific product specifications, purchase quantity and purchase unit price, the company arranges production and sales according to customer orders.
3. Industry policy
China has introduced a series of policies to support the development of the optoelectronic industry and its downstream related fields, and the government's support policy support will provide a good environment and development opportunities for the development of the biometric filter industry. In 2023, the General Office of the People's Government of Jilin Province issued the "Implementation Plan for Building a New Track for the Biomedicine and High-end Medical Device Industry in Jilin Province", which mentioned that it will focus on the development of key devices such as high-performance filters to achieve localized substitution.
Fourth, industry barriers
1. Technical barriers
One of the top challenges facing the filter industry in China is the technical barriers. High-end filter products often require advanced manufacturing techniques and sophisticated processing equipment, which often require significant investments. Companies with these technologies and equipment are able to produce high-quality, high-performance filters that give them a competitive edge in the market. In order for new companies to enter this field, in addition to capital investment, they also need to conduct long-term research and development to catch up with the technological level, which increases the entry barrier for new players.
2. Industry standard barriers
As an optical component widely used in various fields, the filter has strict requirements for quality and performance. Industry standards and certifications have become a prerequisite for companies to enter the market. Companies that are certified to international standards such as ISO are more likely to gain customer trust and increase market share. At the same time, the continuous upgrading of industry standards also makes enterprises need to continuously upgrade technology and product improvement, which is a large burden for small enterprises.
3. Brand building barriers
In the filter industry, brand building is critical to the long-term competitiveness of a business. Well-known brands are often able to build credibility and recognition in the market, attracting more customers. However, it is also a time- and resource-intensive process. At the same time, the market is highly competitive, and some large enterprises are able to offer more competitive prices by reducing costs through economies of scale. For new entrants to gain a foothold in this competitive market, they need to develop a differentiation strategy to offer a unique product or service in addition to brand building.
Fifth, the industrial chain
The upstream industry of the filter is mainly optical glass, synthetic resin, coating equipment, dyes, etc., the price fluctuations of upstream raw materials, changes in supply and demand, technological development, etc. will have a greater impact on the development of the industry, and the supply and demand relationship of upstream raw materials affects its price level, thereby affecting the gross profit level of enterprise filter products. The downstream industries are mainly smart phones, security monitoring, computers, biometrics, automobiles and other fields.
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