After Seven Years, Ending the Absolute Monopoly of Japanese and South Korean Companies, a "Little Giant" in High-End Electronic Pastes Restores the Voice of Chinese Enterprises | Exclusive Interview by Yingke

Author | Lin Qingqing

Editor | Yuan Silai

In the microscopic world of the modern electronics industry, electronic pastes play an extremely crucial yet little - known role.

Whether it's the core circuit boards of smartphones, the precision electronic control systems of new - energy vehicles, or the base - station filters supporting 5G communication, the stable operation of complex electronic devices in these fields all depends on metal powders with a particle size of less than 500 nanometers. Although seemingly insignificant, these powders directly determine the performance ceiling of electronic components and even affect the yield rate of the entire manufacturing production line. They are truly the "invisible performance anchor points" of the electronics industry.

This key functional composite material, mainly made of metal powders, combined with organic carriers and functional additives, and precisely formulated at the nanoscale, is the "industrial blood" that supports the core functions of electronic components - electronic pastes.

According to data from the China Electronic Components Industry Association and the company's internal statistics, in 2024, the market size of electronic pastes in China exceeded 35 billion yuan, accounting for 60% of the global market share, and has become the core of the global electronic paste market. Behind the huge market demand is the strong driving force for the vigorous development of China's electronics industry. From daily consumer electronics to fields related to national strategies such as communication, energy, and aerospace, electronic pastes can be found everywhere, supporting the operation of the entire electronics industry. It is regarded as the "invisible battlefield" with the highest threshold and the lowest domestic self - sufficiency rate in the electronics industry.

However, in the high - end field of electronic pastes, Chinese enterprises have long lacked the right to speak. Take the multilayer ceramic capacitor (MLCC), known as the "rice of the electronics industry", as an example. The production precision of this basic component is extremely high - a single capacitor needs to alternately print thousands of layers of ceramic dielectrics and metal electrodes. As its core material, the domestic self - sufficiency rate of nickel paste was less than 1% before 2020, and more than 90% was imported. Moreover, the import price was as high as one million yuan per ton. What's more serious is that for high - end products such as semiconductor packaging pastes and ceramic substrate pastes, the domestic self - sufficiency rate is almost zero, and the core technology and market dominance are firmly in the hands of overseas enterprises.

"The price of imported pastes is generally 2 to 10 times that of domestic pastes, and downstream enterprises simply have no choice," said Dr. Gao Jun, the founder of Huasheng, directly pointing out the core pain point of the industry. "Electronic pastes have extremely high requirements for performance and precision. Once they are matched with specific production processes and component standards, they cannot be downgraded for substitution at all. Using pastes that do not meet the requirements will either directly lead to a large number of component failures or cause a cliff - like decline in the yield rate of the entire production line. Customers simply cannot take this risk."

In 2016, Gao Jun led his team back to China to engage in the industrialization of electronic pastes. However, the first hurdle on the entrepreneurial path pointed directly at the core production equipment.

"This is not a battle that can be won by simply buying formulas with money," Gao Jun's team was well aware of the importance of core technology and immediately embarked on a three - year journey to reconstruct the core equipment. They not only increased the self - production rate of key equipment to 100%, breaking the overseas equipment monopoly, but also independently built the industry's first lean manufacturing execution system (MES) in the workshop. By monitoring more than 150 production data nodes in real - time, workers operate entirely according to system instructions, avoiding human errors in the process.

The results of these measures were immediate: the mass - production yield rate of the products soared from the initial 80% to 99.9%, successfully approaching the world - leading level of global top enterprises.

Compared with the breakthroughs in equipment and formulas, the test of process matching is more directly related to whether the products can be put into production. In the production of MLCCs, thousands of layers of alternate printing need to be completed. Even a slight fluctuation in the nickel paste may lead to the scrapping of an entire batch of components, with an almost zero tolerance rate.

In 2019, when Huasheng's nickel paste products entered the verification stage of a leading domestic enterprise, they faced the industry's almost harsh access standards: in the 1000 - cycle test at extreme temperatures from - 55°C to 150°C and the 1000 - hour high - temperature and high - pressure environmental life test, the capacitance value change must be within a very small range.

To overcome this difficulty, the team stayed at the customer's factory and spent three months repeatedly adjusting the process parameters. Finally, they adjusted the capacitance value change rate to meet the standard, successfully passed the verification, and won the first bulk order from a leading domestic MLCC enterprise in 2023.

This marks the zero breakthrough of domestic substitution in high - end electronic pastes in China, breaking the decades - long monopoly pattern of overseas enterprises in this field and becoming another milestone in the development history of Chinese electronic materials.

By 2023, its nickel paste further passed the automotive - grade certification, making Huasheng the first domestic nickel paste manufacturer to enter the automotive - grade supply chain.

"The mass - production consistency of electronic pastes is the lifeline of an enterprise, and there is no room for compromise," Gao Jun emphasized. "You know, one kilogram of paste can produce tens of thousands of MLCCs. Even if the yield rate reaches 99%, seemingly only a 1 - percentage - point difference, but in actual production capacity, it means that tens of thousands of defective products flow into the terminal market every day. This is an absolutely unacceptable risk for the electronics manufacturing industry that pursues zero defects."

The sudden outbreak of the pandemic in 2020 unexpectedly became a crucial turning point for the breakthrough of domestic electronic pastes. As the international logistics chain was broken, the inventory of imported electronic pastes quickly ran out, and downstream enterprises faced the crisis of "production halt due to supply interruption". The originally slow - moving process of domestic substitution of electronic pastes was completely accelerated.

After Huasheng's nickel paste entered the supply chain of leading domestic electronic component enterprises at only half the price of imported products, imported manufacturers urgently launched price cuts in response - directly reducing the original quotation to the same level as Huasheng's products. Even so, they still failed to stop Huasheng's market offensive. In 2023, Huasheng's MLCC nickel paste shipments exceeded 100 tons, and the compound annual growth rate of revenue exceeded 150%.

Since then, Huasheng's domestic substitution effect has continued to spread to more high - end fields: in the high - frequency communication field, the silver paste for ceramic dielectric filters developed by it has successfully entered the supply - chain system of a Fortune Global 500 company, breaking the overseas material monopoly; in the semiconductor field, the nano - sintered silver paste has successfully passed the low - temperature packaging test and officially launched an attack on the high - end semiconductor material market.

Now, as a national - level specialized, refined, distinctive, and innovative key "little giant" enterprise, Huasheng is leading the industry with a revenue growth rate of over 150% per year. It ranks first in domestic sales in core niche fields such as MLCC roll - printing nickel paste and has become the preferred supplier for domestic leading electronic enterprises.

In this exclusive interview, we will explore the story of how a Chinese materials enterprise overcame the challenges of nano - scale electronic pastes in seven years and how to defend the line of domestic substitution when overseas giants launch price - cut counterattacks.

The following is the transcript of the interview, edited by Yingke:

Yingke: At that time, more than 90% of electronic pastes in China were imported. This was an opportunity but also a tough nut to crack. What gave you the confidence to choose to do this?

Gao Jun: First of all, our team has world - class technology and years of technological accumulation. We have a clear understanding of the industry's technological levels and future development directions. As an enterprise, we not only need to solve current problems but also reserve technology for the future. Otherwise, it will be difficult to achieve sustainable development. In addition, we were also dissatisfied with the status quo of the Chinese market - why do we have to rely on imports in this field for a long time? This "anger" also became one of our driving forces.

Yingke: The market is large. Why has it relied on imports for a long time?

Gao Jun: The threshold of this industry is very high. It may seem simple, but in fact, only top enterprises can survive, and it's difficult for small companies to make it. At that time, the international market had been divided up by European, American, Japanese, and Korean enterprises, and it was difficult for domestic enterprises to break in. The product verification cycle is as long as 2 - 3 years, and it takes 4 - 5 years from starting a business to passing the verification. During this period, continuous investment is required, and one has to endure loneliness and bear the risk of failure. From a short - term investment perspective, this is not an attractive direction and is more like an area that the state should lead. However, universities and research institutions focus more on technological verification rather than industrialization, resulting in a long - term gap in the high - end electronic paste field in China. We are a rare successful example.

Yingke: Why did other enterprises that tried to make electronic pastes fail?

Gao Jun: Many enterprises gave up halfway because they lacked perseverance and the determination for long - term investment. The R & D and verification cycle of electronic pastes is long and requires continuous financial and technological support. We were able to persevere, on the one hand, because of our team's technological accumulation, and on the other hand, because of our firm confidence in the market. Now the state has also begun to pay attention to this field, and there will be more opportunities in the future.

Yingke: What is the most difficult part of automotive - grade product certification?

Gao Jun: Reliability certification. Our products need to undergo two - to three - year long - term extreme - environment tests at the customer's end and then be verified downstream. The cycle is long and the cost is high, and few companies can persevere. But we passed it, and it has high gold content. This industry may seem like a blue ocean, but there are actually few players who can really succeed. We are a combination of luck and strength.

Yingke: How to deal with the "formula copying" of low - end manufacturers?

Gao Jun: The formula is just the foundation. The key lies in the process and mass - production ability. What customers are most worried about is that the small - sample products are qualified but problems occur during mass production. The main problem with most domestic enterprises is the poor consistency of products. We focus on mass - production stability to avoid ruining our reputation. For example, since 2018, we have invested 2 million yuan to develop the first MES system in the domestic electronic paste industry. This system is commonly used in the semiconductor industry, but it was not used in the paste industry before. We require data to be traceable for more than five years. Employees only need to operate according to the system, without relying on experience. The system will gradually guide the operation to avoid errors.

Yingke: How to compete with international giants?

Gao Jun: International giants are rather arrogant towards the Chinese market, with poor technical services and mainly relying on agent sales. While we can provide local support and quick responses. In addition, imported pastes are prone to expiration during transportation and customs clearance, leaving customers very passive in use. Local supply can not only reduce costs but also improve the stability of the supply chain.

Yingke: Why did you choose to start with the most difficult product (MLCC nickel paste)?

Gao Jun: If we started with conventional products, we would easily be eliminated by the market. We had to bypass the layout of international giants, and the high - end market is their weak point. In addition, what the country needs is to break through the "chokepoint" technologies, rather than engaging in low - end competition. Our main competitors are in Japan, South Korea, Europe, and the United States. They occupy the market with their first - mover advantage and deep - seated binding with customers. However, their service and support for China are insufficient, which gives us an opportunity.

Yingke: The gross profit of electronic pastes is very high. Why do you allocate resources to make photovoltaic pastes?

Gao Jun: The photovoltaic market has huge potential. Although the gross profit is relatively low, the technical threshold is also relatively lower. We entered the photovoltaic market for future technological layout, such as in the fields of perovskite and base - metal electrodes. If we don't enter in advance, we will miss the opportunity for the next - generation technology. In addition, the photovoltaic market is mature. As long as the technology is up to standard, we can quickly generate revenue. We hope to enhance the company's comprehensive competitiveness by covering more markets.

Yingke: Domestic MLCC manufacturers are expanding production. Will they develop their own pastes?

Gao Jun: They will try, but each has its own specialty. Just like Huawei researches components but does not mass - produce them, the gap from materials to devices is large. High - end pastes still rely on imports, and it's unrealistic to make them on their own.

Yingke: After customers choose you, will they go back to overseas manufacturers?

Gao Jun: There's no need. We have good service and low prices. Unless we can't meet their needs, customers won't turn to overseas manufacturers. Now many customers clearly state: Huasheng first, and only turn to overseas if Huasheng can't do it.

Yingke: How do you view the countermeasures of overseas giants, such as price cuts or technology blockades?

Gao Jun: The problem of blockades is improving. As long as you can produce the products, they will stop blocking. For example, after some domestic products are mass - produced, they may even come to set up factories. Now they are afraid of technology leakage, so they sell through agents. This is inefficient. Through product competition, we are gradually carrying out strategic cooperation with overseas competitors.

Yingke: What challenges did the company face during its growth?

Gao Jun: The first few years were very difficult, with few orders, but we persevered. In 2018, the company had only 20 employees and an income of only 30,000 yuan. This year, we expect to achieve an income of 350 million yuan. The core of our growth lies in technology and customer stickiness. Once we enter the customer's supply chain, it's difficult to be replaced.

Yingke: Did the pandemic have an impact on you?

Gao Jun: It's hard to say there was no impact, but there were more opportunities. At that time, overseas customers couldn't enter or had difficulties entering, and they were more eager to cooperate. For example, for manufacturing enterprises, if the raw - material supply is interrupted but the downstream orders have been signed, the factory must keep running, otherwise, they will face default. We seized this opportunity. As long as the logistics is not interrupted, we have no problem with shipping. We use special - vehicle logistics and direct cold - chain transportation to customers, without relying on bulk - cargo channels.

Yingke: What is the current competitive landscape of the industry?

Gao Jun: The process control system established by Japanese enterprises over the past twenty years is still the benchmark. Scale expansion should not be achieved at the expense of quality. Current challenges include price - cut sniping from overseas giants and the need to pass long - term reliability verification for automotive - grade certification. The real competition lies in the speed of technological iteration.

Yingke: Why emphasize "stability"?

Gao Jun: Quality is the lifeline. Japanese counterparts also advised us to proceed steadily. The manufacturing industry cannot be impulsive. We have grown very fast, and in the future, we will continue to balance speed and quality.

Yingke: How do you plan your internationalization strategy?

Gao Jun: In terms of internationalization, through our own technological improvement, we will gradually enter the ranks of international first - class paste enterprises and actively cooperate with overseas industry giants in various forms with an open attitude to achieve win - win results.