3C Big Companies Embrace Titanium, Will Pressure and Opportunities Give Baoji?

        The Xiaomi 14 Ultra Titanium Special Edition has recently been launched, using TC-4 ultra strong titanium alloy as the frame material, which has received a hot response from the market. At the same time, Honor Magic6 RSR Porsche released a product with an image module and a center frame made of supercar grade titanium alloy material. Earlier, the Honor Magic Vs2 folding product used titanium hinges.
        Coincidentally, Apple's new iPhone 15 Pro in titanium metal primary color, launched last year, also uses titanium alloy frames as one of the selling points of the new product, which is also the first time Apple phones have used titanium metal as a new material.
        Whether it's marketing gimmicks or changes and layouts in the use of new materials, 3C giants such as Apple, Huawei, Xiaomi, Samsung, Honor, OPPO, etc. have launched new material trends led by titanium containing products, causing subtle changes in the underlying industry chain.
        Firstly, titanium metal and titanium alloy are expected to enter the mass consumer end of 3C electronics from the current chemical and military industries, and the opening of the mass consumer market often means an explosion and increase in market demand. Secondly, the production process of titanium alloys has changed, and metal 3D printing has become a new trend in the manufacturing of consumer electronics products.
        And the pressure and opportunities, at the same time, give Baoji, Shaanxi, which is a large part of the domestic titanium industry and is known as the industrial small town of China's titanium valley.
        Entering mass consumption
        Titanium metal and titanium alloy have high strength, excellent biocompatibility, good corrosion resistance, and high heat resistance, but their main limitations are poor chemical reactivity with other materials at high temperatures, high process and equipment requirements, and high cost.
        So its current application fields are relatively narrow, mainly used in military industries such as aerospace and weapons, as well as in industrial fields such as petroleum and chemical industry, and have not entered the mass consumer goods market on a large scale.
        It can be proven that from the perspective of the flow of titanium materials and titanium alloy products in Baoji, according to officials familiar with the titanium industry in Baoji, 60% are used in the equipment based chemical industry, 20% in the aerospace industry, and the remaining 20% are used in daily life and sports, including building materials and some consumer electronics.
        Taking China's largest titanium and titanium alloy production enterprise, Baotai Co., Ltd., as an example, the 2023 semi annual report disclosed that the company's titanium materials are mainly used in aviation, aerospace, and shipbuilding; Petroleum and chemical industry; Three aspects of metallurgical industry.
        Although it has not yet been widely used and popularized on a large scale in the consumer end, the advantages of titanium metal and titanium alloy materials actually have a very broad application scenario and imagination space in the consumer end. Such as medical equipment and surgical orthopedic materials in the medical field, eyeglass frames, watches, kitchenware, crutches, fishing rods, handicrafts, golf clubs, etc. in the daily life field, as well as consumer electronics and construction.
        Observing the use of titanium alloy by 3C giants, from Apple Watch Ultra to 15 Ultra, to the active follow-up and embrace of domestic Huawei, Honor, and Xiaomi, titanium alloy is becoming a new standard configuration for high-end 3C products.
        According to public reports, the latest Xiaomi 14 Ultra Titanium Special Edition uses titanium alloy as the center frame material, which has a 214% increase in yield strength compared to the standard version and a 259% increase in material hardness.
        The iPhone 15 adopts a brand new aviation grade aluminum metal curved frame titanium alloy, which reduces the weight of the iPhone 15 by more than 18 grams, and the body structure is more sturdy, with improved scratch resistance.
        The enthusiasm of 3C giants for titanium alloy, a new material, has penetrated into the middle frame of mobile phones, folding screen hinges, and watch cases, which is largely a signal that the application end of titanium metal and titanium alloy is starting to change.
        From an industrial logic perspective, titanium alloy has become an innovative trend in consumer electronic materials, which means that the downstream application of titanium alloy is expected to move from the military and chemical niche end to the mass consumer end.
        The application of a new type of material in the mass consumer end often stems from a large market space and demand, which also means the rapid explosion and opening up of a larger market scale for titanium materials.
        Regarding the industrial changes and opportunities brought about by the use of titanium alloys by 3C, numerous securities research reports have also pointed out that titanium alloy materials are the first to be used in high-end consumer electronics products. With the decrease in material costs and the formation of scale effects in product production, it is expected to continuously penetrate into mid to low-end consumer electronics products, becoming an important direction for material innovation in the 3C electronics field, which will bring opportunities for titanium material processing and related consumables investment.
        New process 3D printing
        Another industrial change brought about by the use of new materials such as titanium alloys by 3C giants is that the processing technology of titanium alloys has undergone new changes. In the manufacturing process of consumer electronics, metal powder 3D printing has become a new trend, and 3D materials will become a new growth point for titanium materials.
        At present, titanium production mainly includes four process flows and stages. Firstly, raw material purification is used to prepare titanium ore into sponge titanium and titanium dioxide with a purity (mass) of 99.1% to 99.7%.
        Secondly, by melting the billets, sponge titanium that meets the requirements can be melted to obtain titanium ingots, or intermediate alloys can be added to melt titanium alloy ingots, and the ingots can be processed into titanium and titanium alloy billets.
        Then, according to the needs of different customers and the special requirements of different application fields, different specifications (shapes) of titanium products, such as bars, plates, pipes, wires, etc., are produced through deformation treatment, heat treatment, and mechanical processing using forging, rolling, extrusion, drawing and other processes, and directly applied to end customers.
        Finally, in some industries and industrial products, titanium materials can be manufactured into titanium parts and equipment through deep processing technology.
        The process used in the titanium alloy products of 3C giants actually involves even more precision machining in the final stage. Simply put, the titanium products in the third stage are converted into metal powder and then combined with 3D printing technology to produce the required products.
        The reason why titanium metal is compatible with 3D printing is because titanium alloy has a small thermal conductivity, which makes it difficult to release heat due to rapid local heating during the cutting process. Therefore, the use of reduced material manufacturing is difficult. 3D printing, which uses additive manufacturing technology, effectively avoids the above drawbacks and is very suitable for processing complex internal structural components. It also has the advantages of high raw material utilization, low cost, and high yield rate.
        Therefore, 3D metal printing is mainly used for the processing of mobile phone structural components, such as the Honor Folding Screen Mobile Magic V2, which uses titanium alloy 3D printing technology on the hinge cover of the folding screen, marking the first large-scale use of 3D printing titanium alloy technology on mobile phones.
        In addition to consumer electronics, 3D printing should also be used in scenarios such as medical devices and surgical orthopedic materials in the medical field due to its customization characteristics. However, it remains to be seen whether this new production process can still be applied to other consumer applications, or whether it is currently commonly used in the chemical and military industries of titanium alloys.
        Regarding the new technology of metal 3D printing, local officials in Baoji hold reservations, saying, "This is innovation, but our traditional forging, rolling, extrusion and other processes cannot be replaced by 3D printing.".
        The above-mentioned officials stated that the most important issue with 3D printing is the one-time molding of metal powders and particles. There may be some problems with the product, such as the problem of gaps and gaps. The product is not as reliable as forging and casting, and it is difficult to apply in some industrial fields. This is also the reason why many Baoji titanium material enterprises do not use it at present.
        Of course, the advantage of 3D printing lies in its speed and efficiency. The above-mentioned officials believe that it is more suitable for precision machining of small parts. The most difficult part of industrial manufacturing is precision machining, and the smaller the object, the more precision machining is needed and rapid prototyping is required.
Pressure or opportunity?
        Baoji, Shaanxi Province, is a local industrial hub that occupies most of the domestic titanium industry. Its titanium industry, with a scale of 61 billion yuan, ranks first in the country and second in the world, and is known as the "cradle of China's titanium industry". Baoji's titanium industry is also expected to impact the 100 billion yuan industrial chain.
        From the perspective of industrial location, the upstream of the titanium industry chain is sponge titanium and titanium dioxide, the midstream is titanium material processing, and the downstream is application end customers. The titanium industry in Baoji is in the middle of the industry.
        The advantage of Baoji's titanium industry lies in its production capacity and scale. In 2023, the entire domestic titanium production will reach 130000 tons, with Baoji High tech Zone accounting for 70000 tons; Secondly, product advantages include a wide variety of titanium products, complete specifications, and good quality; Furthermore, the advantages of the industrial chain include a complete titanium industry chain from sponge titanium ore mining to smelting, processing, deep processing, and equipment manufacturing; Finally, the advantage of enterprise clustering, with over 600 titanium enterprises gathering, is conducive to cost reduction for enterprises.
        Meanwhile, its industry pain point is that although the titanium industry has a large overall scale, its industrial quality and competitive advantage are weak; More than 600 enterprises, except for leading and backbone enterprises, are small and scattered, with weak technological and innovative capabilities; The product value chain is relatively low, and there is a lack of high-end products.
        Based on this, the application of titanium metal and titanium alloy in the consumer electronics sector has brought about changes in the industry chain, which is both pressure and opportunity for Baoji.
        The opportunity is obvious. The use of titanium alloy and 3D printing technology by electronic head manufacturers will drive an increase in demand for titanium materials, while also promoting industrial technology improvement and innovation. The logic is that in order to enter the supply chain of 3C head manufacturers, titanium enterprises need to meet their demand for high-quality and high specification titanium alloy products.
        On the other hand, as mentioned earlier, the use of titanium alloys in consumer electronics is mainly in the final stage of titanium production, which is further precision processing. This means that there are precision processors for titanium alloys between titanium suppliers and end customers.
        According to public reports, the main supplier of titanium alloy materials for Apple smartphones is Shanghai Baotai, with Guangzhou Zhongshan Precision and Nantong Kangrui New Materials as processors. According to titanium industry insiders, Baoji Titanium Enterprise will pay more attention to the layout of major national heavy equipment such as aerospace and navigation in the future titanium product application end.
        At present, there are no titanium enterprises in Baoji that have entered the supply chain of 3C manufacturers, and the industrial value of consumer electronics is very high. Due to the need for precision processing, the technology, process, and equipment requirements of titanium material enterprises are also high. As demand opens up in this part of the market, if there is a missed opportunity for layout, Baoji's titanium industry can only become a high-volume supplier, rather than a high-value processor.
        Even though the aerospace and navigation market has a highly imaginative future and high industrial added value, without laying out a high-end value chain, the market demand can only help to increase the scale of Baoji's titanium industry, rather than the innovation and value chain.
        In this regard, Baoji has clearly realized its industrial shortcomings. According to a source from Baoji's investment promotion line, Baoji is trying to attract and introduce corresponding precision processing enterprises. "The use of titanium alloys by manufacturers such as Apple is a driving force for the industry.".
        At the same time, the aforementioned officials stated that Baoji has already laid out to overcome industry pain points. In response to the innovation chain, Baoji plans to incubate and introduce talents, technology, and scientific and technological innovation platforms to help local titanium enterprises achieve technological and innovative upgrades and breakthroughs.         Focusing on the value chain, we aim to create high value-added products in the field of aerospace and navigation. And to supplement the financial chain, ensure supply chain efficiency and security, plan to form cost control for upstream sponge titanium through equity participation or acquisition.
        From Daily Economic News 2024-04-02