"Relay" industry "pyramid" situation needs to be changed

In general, the development status and trend of the relay industry are optimistic and the industrial outlook is better. In 2008, the national industrial relay market capacity was approximately 1.09 billion yuan. In 2009, the industrial relay market capacity reached 1.16 billion yuan. In 2010, China’s relay sales were approximately US$1.6 billion. In 2011, the country’s relay exports reached more than 38 million U.S. dollars, which was still an increase of 2.02% compared with the previous period under the premise of global economic downturn. During the "Twelfth Five-Year Plan" period, the demand and application of the relay will continue to "force", and the market demand for traditional electromechanical relays, solid-state relays and special relays will increase rapidly in varying degrees. But relatively speaking, the high-tech mid-to-high-end market is growing faster than the low-end market, and the potential is even more inestimable.

Contrary to the growth in demand, the current supply structure presents a “pyramid” situation. On the one hand is the production of low-end relays at the "bottom of the pyramid" and there are numerous companies. At present, the low-end products and low-value-added products still account for the vast majority of output. It is precisely because of the low threshold of traditional low-end production and the large number of manufacturers. In the absence of core expertise, many manufacturers have fallen into the quagmire of “fighting prices,” causing manufacturers’ own profits to be low and unsustainable, as well as causing chaos in the entire industry. On the other hand, high-end relays have large technical requirements, and high-end technologies are mainly concentrated in a few companies. The high-end relays incorporate knowledge in many fields of science and technology, featuring high-tech content and high added value. The products are widely used in high-tech fields such as electric power, electronics, communications, aerospace and aviation. Its production often uses flexible manufacturing technology, trial production, production integration, requires companies with strong research and development capabilities and production management. At present, there are only a few “pyramid-tip” companies engaged in the production of high-end relays in China.

Changing this unreasonable "pyramid" structure is an urgent task for the industry. Luo Xiaojun, an industry analyst, believes that the traditional low-end relay competition should be benign and orderly. More companies should increase their awareness of technological development, and provide more innovative products with independent intellectual property rights, even comparable to international companies, in order to easily win more. Profit, win back market respect, usher in the bright future of the entire industry.