Report Date: 2026-08-31 ｜ Sector: Metal Soft Magnetic Powder Cores (metal-soft-magnetic-powder) ｜ Analysis Prototype: Technology Hardware
Metal soft magnetic powder cores (alloy soft magnetic powder cores) are composite soft magnetic materials made from raw materials such as pure iron, silicon steel scrap, silicon, aluminum, and chromium, through a process of gas atomization → insulation coating → compression molding → annealing. Main product categories include Sendust (Fe-Si-Al), Fe-Si, Fe-Si-Cr, high-flux, and carbonyl iron powder cores. With high saturation flux density (approximately 1.0–1.5T, significantly higher than ferrite's ~0.5T) and good DC bias characteristics, they dominate high-current power inductor applications.
One-sentence industry chain map: Bulk metal raw materials (pure iron/silicon steel/chromium powder) → gas atomization powder production (core barrier segment) → powder core pressing/annealing → magnetic components (power inductors, chip inductors, molded power inductors) → end markets: PV inverters (~33%), NEV OBC/DC-DC + charging piles (~40% combined), UPS/data centers and AI server power supplies (~13%), energy storage PCS (~7%), inverter air conditioners, etc. (~7%) (2025E revenue basis, Huayuan Securities).
Scope note: This report does not cover soft ferrites (the main business of Hengdian DMEGC and Tiantong) or amorphous/nanocrystalline ribbons (the main business of Yunlu), but incorporates all three into substitution analysis as competing technology routes; AI chip inductors/molded power inductors, as component-level extensions of metal soft magnetic powders, are included in the profit pool analysis.
Market size (two bases, separately labeled throughout and never mixed):
| End Market | Size (RMB 100M) | Share | Growth and Logic |
|---|---|---|---|
| PV inverters | 33.4 | 33.4% | 2022–2025E CAGR ~32%; after 2024, growth decelerates to single digits—low double digits as installation growth slows |
| NEV OBC/DC-DC + charging piles | 18.9 + 21.0 | 39.9% | Automotive CAGR ~44%, the fastest-growing end market; per-vehicle usage 1.18→1.78kg (800V penetration), per-pile 3.3–3.76kg |
| UPS/data center power (incl. AI) | 12.8 | 12.8% | Traditional UPS single digits; AI server power supplies/chip inductors 2022–2027E CAGR ~67% (RMB 1.0→1.24 billion) |
| Energy storage PCS | 6.6 | 6.5% | CAGR ~35%; global storage additions in 2025 of 112GW/307GWh, +48% YoY (BNEF) |
| Inverter air conditioners and others | 7.5 | 7.4% | Low single digits, replacement-driven |
Structural growth accounts for roughly 2/3 (PV/ESS penetration, rising per-vehicle usage with 800V, AI power supplies displacing ferrite—all penetration/per-unit-usage logic), while cyclical fluctuation accounts for roughly 1/3 (PV policy-driven rush installations, air conditioners and UPS tracking the macro cycle). After the pullback of China's PV rush installations in 2025H1, leader Platinum Development's PV revenue fell -15% YoY in 2025Q3—a direct manifestation of cyclicality.
Base year 2024 at RMB 8.27 billion → target 2027E of approximately RMB 11.61 billion, a net increase of +RMB 3.34 billion (CAGR ~12.0%):
Cross-validation: QYResearch's top-down forecast of 16.8% CAGR for global metal magnetic powder cores 2025–2031 extrapolates to ~RMB 13.7 billion in 2027, about 18% above the bottom-up bridge—the gap mainly lies in the aggressiveness of AI substitution assumptions. This report uses the bottom-up bridge as the headline and treats the difference as upside in an AI-beats-expectations scenario.
Three links in the quantification chain: ①Driver trajectory (hard numbers)—global data center capex of USD 455 billion in 2024 → ~USD 714 billion in 2025 (+57%) → over USD 1 trillion in 2026E (Dell'Oro); AI server shipments +42% in 2025, +31% in 2026E (TrendForce). ②Per-unit usage leap (semi-quantified)—AI server per-unit power supply capacity rising from 3–5kW to 20–40kW+ (GB200/NVL72 platforms); the verifiable substitution segment is chip inductors (2022–2027E RMB 100 million→1.24 billion); "5–10x per-unit powder core usage" lacks first-hand teardown and remains to be verified. ③Penetration ramp-up (timing clear)—800V HVDC small-batch shipments along the supply chain in 2026Q3; NVIDIA plans to scale 800VDC adoption starting from Rubin Ultra/Kyber racks in 2027, with 2027–2028 as the main acceleration phase.
Hedging risks that must be flagged: Both NVIDIA's official technical blog and Renesas emphasize that the core selling point of 800V HVDC is reducing conversion stages and the number of PSUs per rack—the net effect of HVDC on inductor usage depends on the specific topology and may be "lower volume, higher value" rather than unidirectional volume growth; moreover, concerns over Big Tech AI capex have emerged (Reuters Breakingviews questions the return on USD 630 billion of investment; WSJ points to massive off-balance-sheet leases and chip commitments). Overall judgment: AI power supplies constitute a potential structural inflection point (direction quantified, magnitude partially qualitative and pending quantification), contributing roughly 33% of the industry's net incremental demand in 2027.
Global nominal capacity in 2025 is approximately 217,000 tons/year (China accounts for over 90%, CIC). Leader Platinum Development's powder core capacity utilization has declined step by step: 89.8% (2023) → 89% (2024) → 81.9% (2025) → 80.8% (2026Q1); AI chip inductor line utilization was 75.5% in 2026Q1 (new line ramp-up period; 88.1%/90.1% in 2023/2024). Implied industry utilization is ~81%, with nominal excess capacity of ~40,000 tons.
Powder core/powder lines take roughly 1–3 years from decision to production, with bottlenecks in gas atomization powder production lines and customer certification (1–2+ years) rather than buildings. Red-team-revised conclusion: this cycle is not "zero new supply"; nominal capacity still has increments, and the clearing of traditional lines depends more on demand-side recovery.
Anchored on Platinum Development's 2024 annual report (electronic components basis): direct materials account for 30.1% of COGS, manufacturing overhead 45.1%, direct labor ~24.8%—an asset-heavy process attribute, where cost differentiation mainly comes from yield and in-house powder supply rather than raw materials (raw materials are bulk commodities like pure iron/silicon steel scrap). Gross margin gradient: AI chip inductors 45.3%→49.6% (2023→2026Q1) > consolidated 40.7% (2024) > alloy soft magnetic powder cores 39.0%→30.1% (2023→2025, PV price war pass-through). Barriers in order: gas atomization powder production know-how (particle size distribution/sphericity/oxygen content) > customer certification (automotive/data center 1–2+ years) > patents (Platinum has 110 granted patents cumulatively) > capital threshold (hundreds of millions of RMB per 10,000-ton line). In-house powder supply (Platinum/Yunlu) vs. outsourced purchasing is the watershed of the cost curve.
Three-generation migration: Sendust (low-cost, mid-frequency) → Fe-Si/high-flux (high Bs, excellent DC bias; Platinum has iterated to the 5th generation) → ultra-low-loss/high-frequency materials for AI server power supplies and 800V HVDC (NPA series, molded chip inductors). Route competition: metal powder cores dominate high-current power inductors with high Bs; ferrites hold ultra-high-frequency low-loss; amorphous/nanocrystalline (Yunlu's 105,000 tons/year ribbon capacity, global No. 1) is penetrating MHz-level high frequencies, and under the high-frequency trend of 800V HVDC, boundary competition with powder cores in high-end applications is intensifying.
| Year | Nominal Capacity (10k tons) | Demand (10k tons) | Surplus (10k tons) | Surplus Rate | Implied Utilization |
|---|---|---|---|---|---|
| 2024 | 20.7 | 16.6 | +4.1 | 24.5% | ~80% |
| 2025 | 21.7 | 17.6 | +4.1 | 23.3% | ~81% |
| 2026E | 22.1 | 18.3 | +3.8 | 20.9% | ~83% |
| 2027E | 22.6 | 19.0 | +3.5 | 18.6% | ~84% |
(2024/2025 anchored on CIC capacity × back-calculated utilization; 2026–2027E assumes capacity +2%/year and demand +4%/year, already revised down from the original +8% demand assumption on the balance side—because China's PV installations in 2026 are expected to fall from 315.07GW to 180–240GW (CPIA), and domestic storage additions in 2025Q1 fell -1.5%/-5.5% YoY (CNESA).)
Core conclusion: Traditional powder cores (PV/ESS/automotive/AC) remain oversupplied on a ton basis, but the surplus rate narrows slowly (23%→19%), with price wars continuing through 2026; high-end categories (AI chip inductors/molded power inductors) account for less than 3% of tonnage but carry high value (global market ~RMB 5.8 billion in 2025 → ~RMB 26.9 billion in 2030E, CAGR ~36%), and are structurally tight due to ramp-up and certification constraints. Overall, a K-shaped divergence of "loose tonnage, tight value."
Traditional powder cores = cost-plus + competitive bidding annual price cuts: Raw materials account for ~30% of cost (bulk commodities); the cost floor is determined by manufacturing overhead (45%, depreciation + energy) and yield; the PV inverter price war passes through the supply chain as annual price cuts (~5–7%/year in 2023–2025), with gross margins around 30% being the constraint level for expansion willingness. Actual per-ton prices: RMB 31,600/ton (2024, Platinum powder core revenue RMB 1.234 billion ÷ sales volume 39,000 tons) → ~RMB 29,700/ton (2025).
High-end AI chip inductors = certification lock-in + value pricing: CR5 reaches 72.5%, certification cycles 1–2+ years, first movers enjoy 45–50% gross margin premiums, with annual price cuts of 3–5% offset by material generational upgrades and rising structural mix.
Cycle position: 2023 destocking (one of the double bottoms) → 2024–2025 recovery → 2025H1 China PV "531" rush installation pulse → 2025H2 pullback → currently (2026H2) traditional lines are in the bottom zone of the cycle: per-ton prices at ~20–25% historical percentile (proxied by leader gross margin + ASP; no futures price history in this industry), powder core gross margin of 30.1% near the clearing constraint level, utilization stabilizing at 80.8%; high-end lines are in an independent upcycle in the early penetration stage.
Pricing framework: cost floor (traditional line gross margin constraint at 30% ≈ RMB 28,000/ton) + supply-demand direction (slowly narrowing surplus) + certification lock-in premium (high-end 45–50% gross margin).
| Quarter | Traditional Powder Core Per-Ton Price | High-End ASP | Rationale |
|---|---|---|---|
| 2026Q4 | RMB 28,000–28,400/ton | Baseline 100 | Muted orders after PV pullback, annual price cuts landing, ~21% surplus rate suppressing price increases |
| 2027Q1 | 28,000–28,400 (stabilizing) | +1~2% | Storage/automotive taking over + 800V HVDC small batches, price war marginally easing |
| 2027Q2 | 28,000–28,500 | +2~3% | Utilization recovering toward 84%+, second-tier capex cautious |
| 2027Q3 | 28,200–28,700 | +3~5% | NVIDIA Kyber rack 800VDC volume ramp, high-end premium widening; traditional lines stabilizing |
Annual price cuts narrow from ~6% (2025) to ~1–2% (2027), with the stabilization point delayed by roughly two quarters versus the original judgment (due to red-team downward revision of demand growth). Scenarios: bear (30% probability) traditional powder cores at RMB 25,500–27,000/ton, high-end annual price cuts widening to 8–10%; base (50%) RMB 28,000–29,000/ton; bull (20%) RMB 29,500–31,000/ton, high-end ASP +5~10%.
Global alloy soft magnetic powder cores by revenue: Platinum Development 27.1% (2025, CIC, global No. 1), NBTM Keda ~15% (2024, Zhiyan Consulting), Magnetics + Changxing + Micrometals combined ~25% (2024, Zhiyan Consulting basis), CR3 ~52%, top four ~54%. Cross-validation: Platinum's 2025 powder core revenue of ~RMB 1.30 billion (RMB 1.802 billion × 72%) ÷ global RMB 4.8 billion ≈ 27%, consistent with the CIC basis. China accounts for over 90% of global capacity, and established overseas players (Magnetics/Changxing) are seeing trend-based share loss due to cost disadvantages. AI chip inductors: CR5 as high as 72.5%, with Platinum ranked fifth (7.6%)—the only CR5 member with less than 10% share—dominated by Taiwanese/American power supply and inductor solution providers, with the landscape still unsettled.
Basis note: "Magnetics+Changxing+Micrometals" in the chart is the combined figure for three established overseas players (~25%, Zhiyan Consulting); on a single-company basis, Magnetics is ~10%, so CR3 (single-company) is ~52% and the top four ~54%.
Profits are currently concentrated in the integrated powder core segment with in-house powder supply: Platinum's gross margin 42.1%, net margin 22.6% (2025), whereas magnetic component manufacturers with outsourced powder/pure pressing (Kaike, Jingquanhua) have gross margins of only 11–15% and net margins of 2–5%—within the same segment, profits diverge sharply based on "whether powder production is controlled in-house." Powder cores account for a low share of downstream power supply/inverter makers' BOM cost (single-digit %), allowing the materials side to preserve its premium. But profit retention is being eroded: Platinum's powder core gross margin has fallen from 39.0% (2023) to 30.1% (2025/2026Q1), as the PV price war has passed through to the materials segment; over the next 2–3 years, the incremental profit pool will migrate toward AI chip inductors/molded power inductors, and AI inductor pricing power is partly held by MPS/Delta-affiliated solution providers (MPS is both the dominant player and a Platinum customer)—materials makers capture a slice rather than the whole—vertical integration by solution providers developing their own powders poses a disintermediation risk.
Strong bargaining power over upstream (raw materials are bulk metals, value lies in formulations rather than the metals themselves; leaders self-supply alloy powders); nominally weaker over downstream (concentrated large customers like Sungrow, Huawei Digital Power, Delta, MPS, with annual price-cut conventions), but premiums are maintained through certification lock-in + low BOM share + customization; AI chain customers demand extremely high quality but have strong willingness to pay—the best bargaining environment among current segments.
The "ease of making money" in this business is highly stratified: The real money-makers are the integrated in-house powder supply segment (Platinum ROE 15.7%, 2025 operating cash flow RMB 347 million, +209% YoY, high sustainable ROIC, moat = formulation + certification + integration), but its traditional powder core gross margin is trending down toward 30%; the illusion of prosperity lies in magnetic component processing without powder-making capability (Kaike 2026H1 gross margin 11.4%, net profit -52%; Jingquanhua net margin only 3.7%)—revenue grows rapidly with PV/ESS/AI volume, but profits are eaten up by annual price cuts and price wars. Yunlu (global No. 1 with 41% in amorphous ribbon) belongs to another high-barrier materials track, but net profit fell -18.4% in 2025 and -25.8% in 2026H1, with core-business profitability in a downcycle.
SW L3 Magnetic Materials Index (850522.SI, as of 2026-08-31): PE 57.71x (68th percentile since May 2014, median 46.96), PB 3.96x (79th percentile, median 3.12). Leader Platinum Co. (铂科新材) PE(TTM) 71.5x (87th percentile over the past 10 years), PB 9.97x (88th percentile). Interpretation: The sector is priced at a historically above-average level, with the market assigning a high premium to the AI + solar/storage boom; note that percentiles are a rear-view indicator—shifts in AI theme weighting can mechanically push percentiles higher, limiting their signal value—the boom thesis must be weighed against "valuation already full": even if the base case plays out, room for multiple expansion is limited, and returns will depend more on earnings delivery.
Demand-side headwinds (traditional line): ① China's Document No. 136 (2025-02) full market entry for renewables + removal of mandatory storage pairing, causing short-term pain in domestic storage (2025Q1 new installations down YoY); ② tightened distributed solar policy + anti-involution campaign—after China's 2025 rush installations reached 315.07GW, CPIA forecasts a fall to 180–240GW in 2026 (-24% to -43%, first decline since 2019); ③ the US OBBBA narrows IRA solar credits (must commence construction before 2026-07-04), and in July 2026 the FCC placed Chinese-made grid-tied inverters on the import ban list—directly cutting off the US export channel and forcing inverter makers to build plants overseas.
Demand-side support (new drivers): ① The Special Action Plan for Large-Scale Construction of New-Type Energy Storage targets over 180GW by 2027 (driving investment of ~RMB 250 billion); ② data center PUE ≤1.5 (80% green power for new hub construction) and 80 PLUS Titanium efficiency standards force high-frequency, low-loss powder cores to replace ferrites; ③ US AI power shortage + Section 232 grid equipment tariffs cut from 25% to 15%, sustaining high prosperity in server power supplies/data center power chains; ④ NEV purchase tax halved in 2026–27 (not abolished, providing a floor).
Supply side and geopolitics: The main raw materials for metal soft magnetic powder cores are FeSi/FeSiCr (non-rare-earth); MOFCOM's rare-earth export controls (2025 Announcements No. 18/61/62) explicitly target SmCo/NdFeB permanent magnets and do not directly affect this industry. But downstream pressure is significant: Section 301 tariffs + Section 122 surcharge of 15%, and the final anti-dumping/countervailing ruling on solar from four Southeast Asian countries with rates exceeding 3400% blocking transshipment—"building plants overseas alongside customers" has become a prerequisite for winning orders, benefiting leaders with overseas capabilities (Platinum's Thailand base) while squeezing small and mid-sized players. CBAM's formal implementation in 2026 has limited direct impact on powder cores (not on the list); its planned extension to downstream electrical equipment in 2028 is a potential indirect cost item. On the production side, gas atomization powder-making is a moderately-to-highly energy-intensive process; stricter energy-approval reviews objectively raise barriers to capacity expansion, favoring incumbent leaders.
Net direction: neutral-to-positive—AI data center/server power supply increments + national storage targets + efficiency-standard-driven material substitution are sufficient to offset China's solar installation decline and US solar/storage policy retreat; policy barriers favor leading integrated players with overseas footprints.
| Scenario | Probability | Narrative | Implication |
|---|---|---|---|
| Bear | 30% | Solar double-dips to the 180GW lower bound + continued negative domestic storage growth + AI capex slowdown in 2027; price war reignites in the traditional line, per-tonne price at RMB 25,500–27,000, leader powder core gross margin falls below 28%; AI increment cut 30–50%; high valuations suffer a double hit | Industry revenue growth falls to single digits, shakeout in processing accelerates, leader valuations normalize |
| Base | 50% | Traditional line oversupply narrows slowly (demand +4%/yr), per-tonne price stabilizes at RMB 28,000–29,000 in 2027H2; AI ramps in 2027 per NVIDIA's timeline, high-end ASP holds firm | K-shaped divergence continues: industry CAGR ~12%, profits concentrate in integrated leaders and AI components |
| Bull | 20% | AI usage multiple hits the upper bound + storage beats (global +30% in 2026–27), traditional line utilization recovers to 90%, triggering restocking-driven price increases to RMB 29,500–31,000/tonne, high-end supply shortage and price hikes | Industry converges toward QYR's top-down path (~RMB 13.7 billion in 2027), volume and price both rise |
Matrix interpretation (base case): the upper-right "Core Allocation" comprises powder-making self-supply integrated leaders positioned in the AI power chain (Platinum, the AI chip inductor segment, NBTM); the lower-right is the value trap—second-tier powder core makers that buy powder externally and grab orders via low-price capacity expansion, riding overall AI/solar-storage boom (x>50) but lacking powder-making barriers, with profits eaten by annual price cuts (y<50); the lower-left "Avoid" is pure traditional solar/storage powder core exposure and magnetics processing (boom down × poor returns); the upper-left "turnaround candidates" are legacy overseas powder core makers (losing share but retaining high-end niches). Boom bullishness ≠ worth buying: the sector's most typical value trap is the processing and second-tier segments that lack powder-making capability yet bet on AI/solar-storage volume—revenue elasticity never translates into profit elasticity.
Preferred:
Avoid:
| Scenario | Biggest Beneficiaries | Biggest Losers | One-line Logic |
|---|---|---|---|
| Bear (30%) | Legacy overseas players (niche defense), Yunlu (relatively benefits from nanocrystalline substitution logic) | Platinum (valuation double hit), Clik/KJH (price war shakeout) | Under a demand double hit, high-valuation growth and barrier-free processing are hit first |
| Base (50%) | Platinum, NBTM | Second-tier external-powder makers | K-shaped divergence continues; integrated leaders capture the AI increment |
| Bull (20%) | Platinum (greatest volume-price elasticity), Hengdian DMEGC | Legacy overseas players (accelerating share loss) | AI usage multiple materializes + traditional line restocking price hikes |
① China solar 2026 installations land near the lower bound of CPIA's forecast (180GW), negative growth in traditional line demand; ② 800V HVDC streamlining conversion stages leads to a net reduction in inductor usage, disproving the AI increment; ③ North American data center project delays widen due to community opposition/power constraints (at least 75 US projects blocked or delayed within 3 months in 2026, Morgan Stanley Data Center Watch); ④ leader powder core gross margin falling below 28% triggers an industry-wide earnings downgrade before the second-tier shakeout; ⑤ solution providers (MPS/Delta) developing in-house powder, disintermediation; ⑥ high valuations (sector PB at 79th percentile) amplify sensitivity to any earnings miss.
Key figures in this report are sourced from: Platinum's 2024 annual report and HK prospectus (CIC data), Huayuan Securities industry deep-dive, Dell'Oro, TrendForce, BloombergNEF, CPIA, CNESA, original policy texts from NDRC/NEA, NVIDIA official technical blogs, SW industry indices (as of 2026-08-31). The per-tonne measure (CIC, ~RMB 4.8 billion / 217,000 tonnes globally in 2025) and the broad-category value measure (Huayuan, ~RMB 10.01 billion 2025E) are labeled separately; the headline share uses CIC's 27.1% (2025, by revenue), with Zhiyan's 21% (2024, QYResearch basis) as a legacy-basis reference. The historical percentile of traditional powder core per-tonne prices is a proxy estimate (no futures price history); the basis limitation is noted.