Which Chinese products are selling well in Europe under the energy crisis?

In this year's hot summer, which is rare in a century, the electric blanket factory in Yiwu, China, is working 24 hours overtime and producing at full capacity in order to make the European people feel at ease during the winter.

To say why Europeans are actively stocking up electric blankets, we have to mention the energy crisis that has been making a lot of noise in Europe in the past few months.

The outbreak of the energy crisis was due to the fact that after the Russian-Ukrainian conflict, Europe followed the United States in imposing sanctions on Russia, and thus encountered counter-sanctions by Russia for interrupting natural gas. The European Union, which relies on Russia for more than 40% of its natural gas, has suddenly created a huge energy gap.

Now, Europe is struggling to secure its energy supply in winter. However, most of the measures such as spending money and price caps can cure the symptoms but not the root cause, and the energy transition will take longer to build, and the conflict between Russia and Ukraine is also intensifying. At present, the situation of energy shortage will not change in a short time.

Looking at skyrocketing gas and electricity bills, Europeans have discovered that electric blankets consume one degree of electricity for one night. Purchased one after another for "self-help", triggering a wave of shopping for small household appliances. On the other hand, the EU is also accelerating the energy transformation in an all-round way, purchasing a large number of energy equipment. Below, let's take a look at which devices are "hot" in Europe.

01

Surge in demand for small home appliance purchases
Getting through the winter warmly is a priority

The most pressing issue of the energy crisis is the supply of heating in Europe in winter. In previous years, natural gas was the key fuel for central heating, but now the price of natural gas has soared, which has become a big burden on the people, and European people have turned to heating appliances. Electric blankets, heaters, air conditioners and other small appliances have become cost-effective choices.

Electric blankets: 150% increase

According to data from the General Administration of Customs, in July alone, the 27 EU countries imported 1.29 million electric blankets from China, a month-on-month increase of nearly 150%. The sales season of heaters exported to the EU has also been extended by about a month. Many importers placed additional orders for heaters, which brought a wave of "replenishment orders".

In the chip solution of electric blanket, the types of semiconductor devices usually used mainly include MCU, temperature sensor (thermistor element), and some electric blanket products with the main concept of intelligence also use chips required for IoT upgrade, such as Bluetooth chip , voice chip, etc. Since the chips used in electric blankets do not have high performance requirements, Chinese chips are expected to achieve 100% localized supply.

An executive of a well-known domestic signal chain chip company believes that for the electronics industry, electric blankets belong to a niche market, and their main cost is still concentrated on fabrics. The electronic devices used in them are relatively simple and the power is not high, so consumption MCU-like can do the job. If it is estimated by the market shipment of 100 million pieces, the market size of 8-bit MCU is about 100 million CNY.

Electric blankets

02

Europe imports a large number of new energy equipment
Accelerate the energy transition

Winter will eventually pass, but the situation of energy shortage cannot be changed in a short time. Consumers' energy needs are barely being met, but European industries with high demand are already struggling and are being forced to cut production. The energy crisis is also forcing Europe to accelerate the pace of energy transformation. The European Union is urgently formulating a plan to "digitize the energy system", requiring the EU to invest 565 billion euros in infrastructure by 2030 to end its dependence on Russia's fossil fuels, and this new plan will also drive the export of energy equipment.

Energy Storage Batteries and Systems: Overcoming the Energy Crisis from the Source

The poor energy storage capacity is also one of the deep-seated reasons for the outbreak of the energy crisis in Europe. Driven by the dual carbon goals, Europe has accelerated its energy transition in recent years. In 2020, the proportion of renewable energy power generation in EU countries exceeded that of fossil energy for the first time.

However, while increasing the proportion of intermittent renewable energy such as wind energy and solar energy, the corresponding energy storage technology in the EU has not achieved breakthroughs, and failed to solve the problems of "seasonality" and "volatility" of clean energy power generation. The supply is green and yellow.

Lithium batteries are the first choice for modern energy storage devices, and the demand in Europe has risen sharply this time. As a major producer of lithium batteries, China's export volume has increased significantly. In the first eight months of 2022, my country's total exports of lithium-ion energy storage batteries were US$29.926 billion, a year-on-year increase of 82.97%. It is expected that the installed capacity will exceed 90GWh in 2022, a year-on-year increase of 88%, and will exceed 324GWh in 2025.

At present, the average price of energy storage batteries in my country is roughly between 1-2 CNY/Wh. Calculated at 1 CNY/Wh, a market of more than 324 billion CNY will be formed in 2025.

Lithium battery energy storage system is mainly composed of battery pack, power conversion system (PCS), battery management system (BMS), energy management system (EMS) and other electrical equipment, of which the cost of battery pack accounts for nearly 60%, and PCS accounts for nearly 60% 10-20%, and other costs account for about 20-30%.

The IGBT module is one of the core devices in the converter PCS. Chips such as AFE (analog front end), ADC (analog-to-digital converter), MCU and digital isolator are usually required in BMS.

At present, major domestic PCS manufacturers mostly use IGBTs from overseas leading manufacturers, such as Infineon, and also use IGBTs provided by domestic manufacturers in small batches, such as Star Semiconductor and Times Electric. The energy storage BMS market is mainly composed of energy storage battery companies and professional third-party BMS companies. Battery companies such as CATL, BYD, self-supply BMS etc.

Photovoltaic inverter: rapid growth, opening up a market of 100 billion CNY

In order to get rid of energy dependence on Russia, Europe has begun to accelerate the transition to renewable energy. In May, the European Union released a draft plan called REPowerEU, which proposed: "By 2025, all new buildings, as well as existing buildings with energy consumption class D or above, should have rooftop photovoltaics installed". In this context, many European countries such as the United Kingdom and Germany are setting off a new wave of photovoltaic installations.

As the world's largest photovoltaic product manufacturer and photovoltaic application country, China's export volume of photovoltaic modules has increased significantly this year. From January to August 2022, the export volume of photovoltaic modules exceeded 100GW, and the corresponding export value reached 30.27 billion US dollars. Both of them exceeded the total value of 2021. The total value of photovoltaic modules imported from my country in Europe reached 16.36 billion US dollars. More than half of the total exports.

Photovoltaic inverter plays an important "heart" role in photovoltaic modules, which converts the direct electricity converted from sunlight into the mains electricity we usually use. The main chip in the photovoltaic inverter is IGBT, which is mainly used for power conversion and circuit control of power equipment. It is the core device for power processing and realizes the bridge between DC power and AC power. Taking the manufacturer GoodWe as an example, in the first half of 2021, among the raw materials of GoodWe, IGBT-based semiconductor devices accounted for about 10% to 15% of the inverter cost, and the amount reached 214.4075 million CNY.

According to industry research, the value of IGBT in photovoltaic inverters is about 20-30 million CNY/GW. In 2025, the domestic photovoltaic inverter IGBT market size is expected to reach about 2.31 billion CNY, and the global photovoltaic inverter IGBT market size will reach 6.93 billion CNY

The photovoltaic IGBT industry is still dominated by overseas giants such as Infineon, ON Semiconductor, and Mitsubishi Electric. However, the IGBT single tube from overseas suppliers was out of stock in a large area before, and the production of photovoltaic inverter manufacturers was very tight, and they turned to China's powerful suppliers. Domestically, such as CRRC Times, Macro and Micro Technology, etc.

New energy vehicles: Chinese brands go overseas to Europe

Under the stringent carbon emission requirements, the penetration rate of new energy vehicles in major European countries is increasing significantly. Coupled with the catalysis of the energy crisis, the penetration rate of new energy vehicles in Europe has reached 20.2% in the first half of 2022.

In the first eight months, my country exported 341,000 new energy vehicles, a year-on-year increase of 97.4%, and contributed 26.7% to vehicle exports. Many new energy vehicle manufacturers have also made big moves this year. For example, NIO announced on October 8 that three new models will be launched in Germany, the Netherlands, Sweden and Denmark in a subscription model.

As an emerging industry with a high degree of automation and technology, new energy vehicles require a large number of chips to maintain their performance. Generally speaking, a traditional car needs about 500-600 chips, while a new energy car needs about 1000-2000 chips.

At present, automotive electronics will account for more than 1/3 of auto parts in 2020, and it is expected that automotive electronics will account for 50% of the total vehicle cost in 2030. Under the trend of electrification + intelligence, the main control chips, memory chips, power chips, communication and interface chips, sensors and other chips have been rapidly developed.

Three well-known brands of new energy vehicles in China: Xpeng, Li, Nio

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