Encoder manufacturers to deal with the background of raw material prices: the localization of substitution and process optimization of dual-track parallelism

2025 commodity prices continue to run high, encoder key materials such as rare earth permanent magnets, precision bearing steel rose 23%-45% year-on-year. at the same time, the international brand encoder core chip delivery cycle was extended to more than 26 weeks, forcing downstream enterprises to pay 15%-30% emergency procurement premium. This double squeeze makes domesticEncoder manufacturerss gross margins generally declined by 5-8 percentage points.

Second, the three major implementation paths of localization substitution

1. Autonomous control of core components
   Enterprises such as XIVIDI have reduced the share of imported components in magnetic encoders from 62% to 28% by applying domestic chips to replace imported ones, and the material cost of a single unit has been reduced by 340 yuan. Its development of Profibus protocol-compatible modules, has successfully replaced Siemens GEL247 series in the wind power pitch system.
2. Supply Chain Localization Reconstruction
   The Yangtze River Delta Precision Processing Industry Alliance was established to realize 300-kilometer radius support for key structural parts such as code discs and bushings. For example, a manufacturer in Wuxi, through the procurement of special aluminum alloys in the vicinity, the logistics cost is reduced by 82% compared with imports.
3. Standardized ecological construction
   Participated in the formulation of five national standards, including General Technical Conditions for Industrial Multiturn Absolute Encoders, and promoted the plug-and-play compatibility of domestic encoders with servo systems such as Huichuan and Exton.

Three, process optimization of the four-dimensional breakthrough

1. Digital process innovation
   The introduction of digital twin technology to simulate the magnetic grid etching process has increased the yield of Civiti's code disks from 89% to 96%, reducing scrap losses by 12 million RMB annually.
2. Lean Manufacturing Transformation
   A Shenzhen-based company reconstructed its assembly line through value stream analysis, compressing the production beat of multi-turn encoders from 14 minutes to 9 minutes and reducing labor costs by 40%.
3. Material substitution innovations
   Adopting glass fiber reinforced composite material to replace the traditional metal shell, in order to meet the IP67 protection level at the same time to reduce the weight of 30%, the cost of raw materials for a single piece is reduced by 65 yuan.
4. Energy Efficiency Improvement
   The introduction of a waste heat recovery system for the heat treatment process in the production of magnetic encoders has reduced energy consumption by 187,000 kWh per 10,000 units.

IV. Synergies and Industry Insights

Anhui a servo enterprise using "domestic components + optimization process" combination of strategies, the total cost of its 21-bit absolute encoder than purely imported solutions down 52%, delivery cycle from 19 weeks to 6 weeks. This confirms the multiplier effect of the dual-track strategy: localization to solve the supply chain security, process optimization to release the cost potential.