Boarden’s Dr. Li Remarkable Speech at the 2024 Annual Conference of the China Electronic Components Industry Association
As market saturation intensifies in the electronics industry, finding a breakthrough has become a pressing concern for companies. On December 11, 2024, Dr. Jim Li, founder of Shanghai Boarden, delivered a speech at the Annual Conference of the China Electronic Components Industry Association. Drawing on Boarden’s growth journey, he provided an in-depth analysis of the root causes of market saturation and proposed proactive strategies to address it.
Dr. Li focused on how Boarden achieved business growth by diversifying into niche markets, promoting domestic alternatives, and exploring new technologies and markets. These insights not only highlight Boarden’s forward-thinking strategies but also provide valuable guidance for industry peers facing similar challenges. Below is a summary of Dr. Li’s speech for reference:
Speech by Boarden Industrial
Dr. Li:
Leaders, entrepreneurs, and colleagues, good day. I am Dr. Jim Li from Shanghai Boarden. I’ve noticed that much of the discussion today revolves around market saturation, as well as the unfair and unscrupulous practices of larger corporations. I’d like to share Boarden’s perspective on this issue.
Market saturation stems from overcapacity and declining demand—an unavoidable market behavior. Complaining or resenting it is unnecessary, as we, too, have benefitted from market saturation. Why do I say this? It’s often said that history repeats itself, and the same applies to economic development. Our current product and market models originated in Europe and the U.S. Market saturation there led to its spread to Japan and South Korea, then to Taiwan and Hong Kong, and now, to us. We were once beneficiaries of this phenomenon. Without market saturation in developed countries, ‘Made in China’ wouldn’t have spread worldwide, nor would China have become the world’s factory. Our rise as the second-largest economy owes much to this trend.
Now we are also facing involution, so this is a kind of market behavior, which is not caused by any individual or organization, nor is it something that can be influenced by an individual or organization. Rather than complaining about or resenting market saturation, we should face it head-on and proactively seek solutions. This is a more constructive approach. Now that market saturation has reached us, why not redirect excess capacity to less developed regions like Brazil or India? This is one viable path.
As Secretary Li Feng mentioned earlier, the major categories of circuit protection components are still dominated by European and American companies, both in terms of sales and profitability. Even for products like thermal fuses, where Chinese manufacturers lead in quantity, as Mr. Wang Yang from SFI noted, our profitability remains low and lags behind European and American firms. Even a leading brand like Saiter lacks sufficient profit margins. Without top-tier suppliers setting benchmarks, smaller peers have even less room for profitability. Without adequate profit margins, how can we ensure sufficient R&D investment and market expansion? How can we build brands and increase profitability? These are questions worth contemplating.
以宝宫为例来说，宝宫的「High-Energy Multilayer Varistor」有一款料跟力特的在性能参数上并没有什么大的差异，甚至个别的参数比力特的还要好，那为什么它就能卖三毛美金，而我就只能卖5毛人民币呢？所以这些才是我们该大力努力的地方。往国产化替代上努力，也是我们缓解内卷的一种方式。
Small enterprises often lack the vision or expertise to build brands and enhance profitability. With the ongoing economic decoupling between China and the U.S., we are actively pursuing domestic alternatives. If I were to offer a suggestion to the association, why not provide strategic analysis and guidance based on industry cycles and national policies? This could help small enterprises with industrial planning and domestic substitution.
Many small enterprises possess solid technical foundations and excellent products, but they may not even realize their own potential. This is where the association should step in—to assist them in understanding their strengths, developing their products, and building their companies so they can align with the pathway of domestic substitution. This approach not only addresses bottlenecks in the national economic development but also establishes benchmarks within the industry, leaving room for other fiercely competitive companies to thrive. It is a practical measure to ensure the association fosters a healthy ecosystem while alleviating the challenges of market saturation.
Another point is the emergence of new technologies and markets, which are constantly evolving. Unfortunately, most circuit protection enterprises lack the sensitivity and access to such information. If the association could assist companies in pursuing new technologies, it would help address issues in circuit protection for these technologies and markets, ensuring the industry’s smooth development. This would also foster growth in the circuit protection sector, guiding enterprises toward broader and newer fields. This represents yet another viable solution to alleviating market saturation.
Someone suggested earlier that the association could set a minimum guiding price to avoid abnormal market saturation. I believe this approach is unfeasible. It is a passive, defensive strategy, akin to deploying heavy defenses along a long fortification line—if one point is breached, the entire defense collapses. Even if we invest time and effort to establish a minimum guiding price, a struggling enterprise may still underbid below this threshold, leading to the collapse of the entire alliance. Instead, circuit protection enterprises can focus on creating competitive products within their niche sectors. Through mutual collaboration and product complementation, they can address internal competition—a more proactive approach to tackling market saturation.
Even within familiar niche sectors, there are opportunities to explore even more specialized fields. For example, last week, I visited a long-time friend’s company. Initially, both of our businesses operated under a service-oriented model. However, while they ventured into a highly specialized technical service niche, Boarden shifted toward a product innovation-focused specialization.
During this visit, I discovered that their company had developed a highly comprehensive laboratory in the automotive field, complete with a team of engineers and systematic training programs. They can provide businesses with EMC training, consultation services, solution optimization, testing, and even issue related certification. In comparison, I would feel embarrassed to still call Boarden a service-oriented company. That said, he also expressed admiration for Boarden because, while his company’s optimized solutions for clients often involve standardized circuit protection components with limited premium pricing potential, Boarden’s products feature distinct characteristics, specialties, and competitive advantages, including domestic substitution capabilities. If his company could incorporate Boarden’s products into their optimized solutions, it would effectively resolve some of the challenges they face during client solution adjustments.
Thus, despite operating in distinct specialized tracks, our companies can form a powerful alliance, enhancing customer service while maintaining competitiveness and achieving better profitability. For example, in the case of overcurrent fuses, some companies specialize in high-current capacities, others in high-voltage applications, and some excel in cost-effective standard fuses. The association could guide and coordinate these companies to focus on their strengths, creating a synergistic and complementary ecosystem. This approach not only benefits individual companies but also fosters a robust ecosystem for the entire electronics industry, representing a viable pathway to mitigating market saturation.
In summary, there are many ways to mitigate market saturation. One is to aim upward by promoting domestic substitution; another is to redirect surplus capacity to less developed regions. Additionally, focusing on new technologies and delving deeper and broader into specific fields can help establish a comprehensive circuit protection ecosystem.
Using Boarden as an example, deep specialization is also a pathway forward. In 2015, we faced two choices: focus on semiconductor-based circuit protection components or material-based ones. We observed that the semiconductor industry had already seen significant overcapacity, far exceeding market demand, which would inevitably lead to fierce competition. Thus, we chose material-based products that better suited Boarden’s capabilities as our development direction.
We chose to focus on high-energy multilayer varistors. This product was relatively underdeveloped domestically and required both technical and application-specific expertise, areas where Boarden excelled. Thus, in 2017, we invested in a manufacturing facility for these varistors. After a year of preparation, we began mass production in 2019, starting with a monthly output of 4 million units, which reached a peak of 40 million units per month by 2024. Even during the pandemic and the current period of market saturation, we have maintained solid growth. In fact, despite 2024’s saturation, Boarden’s shipments this year have doubled compared to last year.
Why have we achieved this? It’s due to our decision to pursue a specialized niche within our product category. We have deeply penetrated the lighting industry, working with leading companies such asSignify」Ledvance, Nationstar, Opple, Foshan Lighting, Debang, and Lifud. All these industry leaders are our clients. Moreover, we have expanded beyond the lighting sector. In the first half of this year, we achieved nearly 40 design-ins across various industries, including security (Dahua), communications (Luxshare), smart home (H&T, RAK), as well as low-voltage appliances, consumer automotive electronics, and new energy sectors. These expansions are poised to become significant contributors to Boarden’s future revenue growth. This is the result of our strategic focus on niche specialization.
Of course, there are some large assembly manufacturers that, under market saturation pressures, resort to abnormal bidding and competition tactics. These practices are against market principles, eroding the profit margins of upstream suppliers. Consequently, many suppliers are forced to compromise on quality to meet cost demands. This is detrimental not only to our industry’s growth but also to the manufacturers themselves. This issue must be addressed seriously. Many suppliers, under pressure from manufacturers or their own market expansion needs, have no choice but to participate in such bidding wars. This situation cannot be resolved by individual companies alone. It requires the association to escalate the issue and address these abnormal practices at a higher level.
As upstream enterprises, we must do our part to resist these practices. As Mr. Tu from Ruilongyuan mentioned, we need to clearly define our company’s positioning and development stage. Is it really necessary to compromise by participating in such irregular bidding processes? Are you sacrificing quality just to secure contracts at the expense of your company’s sustainable growth, or will you stick to a healthier developmental path and refuse to support such unethical bidding practices?
If I were to offer suggestions to the association, they would be to help companies gain better access to circuit protection information, coordinate fair competition among downstream manufacturers, and assist enterprises in expanding internationally and achieving balanced development. These are the areas where enterprises truly need support.
结语
李博士的发言为行业内卷问题的解决提供了建设性思路，同时展现了宝宫在面对挑战时的创新精神和社会责任感。未来，宝宫将继续深耕细分领域，探索新技术、新市场，助力构建健康可持续的电路保护生态体系。希望这一分享能够为同行企业提供启发，共同推动行业的高质量发展。
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