Understanding the Global Market for Aluminum Electrolytic Capacitors
10.02.2013 // Dennis M. Zogbi // Passives
Market Positioning In The Larger Capacitor Market in FY 2013
Aluminum electrolytic capacitors account for only 6.5% of all worldwide capacitor shipments in terms of volume, but a full 22% of the global capacitor market in terms of dollar value.
Aluminum electrolytic capacitors are considered a niche component compared to the trillion plus ceramic capacitors (Multilayered ceramic chip capacitors, or MLCC) produced each year, but provide an important solution for all design engineers faced with the requirement of achieving high capacitance beyond the capabilities of ceramic capacitors. However they are the most economical choice when a design engineer needs a combination of high capacitance and high voltage in a component, and is not encumbered by the constraints of volumetric efficiency.
There are two primary technical factors that impact the economics of all capacitors- 1) capacitance is required for almost all electronic circuits and 2) capacitance is equivalent to the physical size or available surface area of the finished component, which makes raw materials used in the production of capacitors key to cost, price and technical advancement. In aluminum capacitors, the key elements are (1) etched anode and cathode foils (2) capacitor can, tab and packaging; and (3) electrolyte. The other key elements are (4) rubber stoppers and end-seals, and (5) capacitor separator papers and (6) lead wires.
Aluminum capacitors have a competitive cost structure when compared to other capacitor dielectrics due to the (1) low price per pound for thin aluminum foil (which is made from bauxite) (2) and the high level of automation involved in the production of aluminum capacitors. Aluminum capacitors differ from other capacitors with respect to cost structure as a result of the number of raw material types consumed per capacitor- i.e. foil and paper, liquid or solid electrolyte, tab, can, leads, stoppers, end seals. None of the other dielectrics, other than perhaps OPP film capacitors have so many different raw materials and required disciplines to produce the finished capacitor. In terms of raw material feedstocks, aluminum is more cost effective when compared to tantalum and plastic film, but not as cost effective as ceramics, which have lower cost feedstocks in barium carbonate and titanium dioxide. Still, at higher voltages, and in higher capacitance values, aluminum electrolytic capacitors are the most economical choice for any design engineer working in the high technology economy today.
There are seven primary configurations (or form factors) which aluminum electrolytic capacitor come in, these are-
Current Market Conditions and Future Outlook:
The market for aluminum electrolytic capacitors remained difficult throughout FY 2013 due to a sluggish market environment in TV set and home theatre equipment, as well as in the desktop and computer markets. Both TV sets and computers are critical end-markets for aluminum electrolytic capacitors because flat panel TV sets, desktop and notebooks computers are all aluminum electrolytic capacitor intensive. With respect to TV sets, the global market has been sluggish due to the economic austerity that is gripping the European economy and because the transition from CRT monitor to flat panel technology has largely run its course. Still however, we remain optimistic that an improving European economy will revive the global TV set business. In computers, the market is a bit more complex as the shift in consumer preference for tablet devices has literally halted production of the larger notebook and desktop computing devices. Unfortunately for aluminum electrolytic capacitor manufacturers, tablet computers do not employ aluminum electrolytic capacitors because of volumetric efficiency requirements. Still, over the long term we remain optimistic that a portion of tablet owners will eventually expand their needs to include notebook and/or desktop computer functionality, which will in turn help the aluminum electrolytic capacitor supply chain.
Also, in FY 2013, additional declines were realized in the industrial end use market segments, especially for large can screw terminal and snap-in aluminum capacitors consumed in inverters in renewable energy systems in Europe. New Feed In Tariff structures in Germany and Italy are now curtailing overall growth in renewable energy systems in its largest regional market. Still however, for the long term we still see the viability of global renewable energy markets driving demand for large can aluminum capacitors for inverter applications in wind and solar energy. Renewable energy targets for many countries for the year 2025 supports continued growth in demand for DC link circuits and their related capacitors to meet the minimum requirements for electricity generation by renewable means.
FY 2014 Market Outlook and Beyond:
In FY 2014 - automotive electronics remains a bright spot for sales of aluminum capacitors, although this is a small piece of the overall demand chart for aluminum capacitors by end-use market segment. Commercial aircraft markets are also continuing to outperform, as are medical device markets and telecommunications infrastructure equipment markets.
Here is a summary of FY 2013 market conditions and the longer-term outlook for aluminum electrolytic capacitors for FY 2014 and beyond-
Statements of fact and or opinions expressed in MarketEYE by its contributors are the responsibility of the authors alone and do not imply an opinion of the officers or the representatives of TTI, Inc.