Motor Supply Chain Trends: Structural Shortage of High-Grade Silicon Steel, Long-Term Contracts & Joint R&D Become Mainstream

Booming new energy vehicles, industrial motors and robotic industries have intensified raw material shortages across the global motor supply chain. High-grade non-oriented silicon steel, the vital material for motor stators and rotors, now faces structural shortages and unstable pricing. Currently, long-term supply contracts and joint R&D have become the most effective solutions to balance supply and demand within the sector.

Structural Shortage of High-Grade Silicon Steel

High-grade silicon steel is decisive to the efficiency and performance of new energy motors. Due to complicated manufacturing processes and long 18-24 month capacity expansion cycles, high-end automotive-grade silicon steel is only available from limited steel producers.

Driven by growing market demand, the year-on-year demand for premium silicon steel has surged over 20%. The industry suffers from a typical imbalance: saturated low-end market alongside insufficient high-end materials. Rising prices and extended lead times bring huge production challenges to motor core and stamping manufacturers.

Long-Term Cooperation and Joint R&D Prevail

To mitigate supply risks and stabilize costs, mainstream motor manufacturers have gradually abandoned spot purchasing modes. Instead, they sign 3-5 year long-term agreements with leading steel mills to secure fixed silicon steel capacity. In 2026, long-term procurement accounts for 70% of vehicle-grade motor material purchases.

Besides stable procurement, joint R&D has gained popularity. Material suppliers and downstream manufacturers co-develop customized low-loss & ultra-thin silicon steel, which fits high-speed stamping needs and perfectly adapts to high-performance new energy motors, achieving mutual growth for the whole supply chain.

Jiaxin Precision Builds Resilient Material Supply Chain

Specializing in precision motor cores and custom stamping parts for over 20 years, Xiamen Jiaxin Precision Metal Co., Ltd. has built a robust supply chain to cope with market fluctuations.

We maintain long-term strategic cooperation with top suppliers including Baowu Steel and Chalco Luotong Copper, securing sufficient high-grade non-oriented silicon steel to deliver stable bulk orders. Our professional team also collaborates with upstream partners to optimize stamping techniques, eliminating cracking and deformation issues during ultra-thin silicon steel processing.

Moving forward, Jiaxin Precision will optimize its supply chain and upgrade motor core processing technologies, delivering reliable one-stop precision stamping solutions for global new energy and industrial automation clients.