Capital blessing: 5G mobile phones plan China’s RF “chip” opportunities

As one of the core components of the communications industry, with the continuous development of the domestic 5G tide, related RF chip industry chain companies have also been in the process of listing acceleration.

Recently, the first application of Haoda Electronics was approved by the Listing Committee of the Shanghai Stock Exchange. Prior to this, Feixiang Technology, Weijie Chuangxin, and Huizhi Microelectronics are in the process of going to the capital market.

Bruce Zheng, sales manager of Zuolan Microelectronics, told the 21st Century Business Herald that, looking at the layout of the domestic industrial ecology in the RF front-end link, the filter is the biggest shortcoming, and the localization rate is higher than that of the RF switch and low noise amplifier (LNA). It is much lower than the power amplifier (PA). With the strong support of domestic well-known mobile phone brand manufacturers and ODM manufacturers in recent years, certain breakthroughs have been made in the filter industry.

“The demand for filters for 5G smart terminals is developing towards miniaturization and highly integrated modularization. At present, among the RF front-end modules, the parts with weak localization capabilities are filters, duplexers, and multiplexers. Especially the multiplexers used in the mid-to-high frequency modules urgently need to be supplemented by the capabilities of domestic manufacturers.” He added.

China Merchants Securities analyzed in the research report that the wireless communication module mainly includes three parts: antenna, radio frequency front end, and main chip. The radio frequency front end is very important to the quality of signal transmission. The RF front-end is mainly composed of filters (Filter), power amplifier (PA), switches (Switch/Tuner), and low noise amplifier (LNA). They are also ranked according to technical difficulty. The market size of these four in 2020 The proportions were 47%, 32%, 13%, and 8% respectively.

The agency believes that the global mobile phone radio frequency front end will grow from 18.5 billion to 25.8 billion US dollars in 2020-2025, and 5G is the main driving force. 5G accelerates the modularization of RF front-ends. However, under the trade-off of cost and performance, a large number of discrete devices will still be used in low-end and mid-range devices in the next few years, and the market scale of modules and discrete devices will grow.

In addition, since the current mainstream Sub 6GHz frequency band adopted by 5G uses LTCC/IPD filters with lower technical difficulty, the difficulty of 5G modules has declined compared with 4G, which brings opportunities for domestic manufacturers to overtake on corners.

The domestic high-end market has yet to break through

From the perspective of the strength of the entire industry chain, the domestic RF front-end industry ecology is currently mainly in the stage of strengthening its own technology and industrialization strength, and there is no development environment for cross-competition.

Bruce analyzed that when 5G matures, the RF front-end market will reach 40 billion U.S. dollars, and the value of stand-alone mobile phone RF devices will exceed 30 U.S. dollars. The filter market will be the largest part of the RF front-end market, accounting for about 60%, and demand will increase. The speed is also the fastest.

In the 4G and 5G era, filters have different requirements for power and device quality. 4G requires more than 30 frequency bands, and 5G has 70-80 frequency bands. The demand for the number of filters has increased significantly. At the same time, due to the more complex radio frequency architecture of 5G, the radio frequency link has basically doubled, and the market demand for filters has also doubled.

According to Zuo Lan’s estimation, in another 2-3 years, domestic companies in related industries may see a trend from cross-competition to integration stage. It can be seen from the path of major overseas companies. For example, Qrovo is taking a filter and PA-based integration route.

Since major overseas RF manufacturers pay more attention to key product lines with high gross profit margins, domestic manufacturers mainly take the replacement of overseas mid- and low-end products as their early development path. With the further improvement of localization capabilities, breakthroughs in the high-end market are just around the corner.

From the current global overall environment, China Merchants Securities pointed out that the current global RF front-end market is mainly monopolized by the four major US giants Skyworks, Broadcom, Qorvo, Qualcomm, and Japanese manufacturer Murata. These five major players have formed a complete product line through mergers and acquisitions. Nearly 80% market share.

According to the analysis of the technical route under different communication standards, the organization, if only looking at the 3G/4G/5G (below 3GHz) frequency band, the mid-to-high-end modules need to integrate high-end filters, and the technical barriers are high. SAW and BAW filters are mainly used in this frequency band. SAW filters are mainly monopolized by Japanese IDM leaders. The concentration of the three major head manufacturers is as high as 82%, mainly Japanese Murata, TDK, and Taiyo Yuden; BAW filters are mainly used by IDM Manufacturers Broadcom and Qorvo monopolize, among which Broadcom’s share exceeds 80%. SAW filters and BAW filters use special processes, and foundries lack the motivation to develop production lines. Self-built production lines or virtual IDM mode are the only ways to produce high-end filters.

In this regard, Bruce said, “We believe that multiple technical routes will coexist.” He further pointed out that because SAW is more in line with the application requirements of the low-frequency market, the overall market structure will be mainly SAW devices, with a share of about 70%- 80%; conventional SAW can cover the full frequency band of Rx (receiving end) and some frequency bands of Tx (transmitting end); TC-SAW can cover the high, middle and low frequency bands of Tx; in some high frequency bands, in order to make up for the insufficient performance of SAW, TF -The performance of SAW products is comparable to that of BAW.

However, BAW devices with relatively high value will be mainly used in the high-frequency market, suitable for some SUB 6GHz frequency bands. With the exponential increase in the demand for RF front-end devices represented by filters in 5G, and the continuous evolution of millimeter wave technology in the future, it is not ruled out that more new filter technologies and technological innovations will emerge in the future.

“We have made certain breakthroughs in TC-SAW and in mass production. These are important breakthroughs in localization.” He pointed out that whether it is conventional SAW technology, mid-to-high-end TC-SAW and cutting-edge technology research, or integration Zuolan has a long-term layout.

According to the development direction of modularization, the definition of different manufacturers will be different. But the overall trend is that the frequency bands deployed by 5G mid- and low-end smart terminals will not be large and complete, because this will lead to excessively high costs.

Bruce said that Zuolan is launching a series of diversity modules; in addition, the overall market competitiveness can be enhanced through product diversification and serialization. For example, Japan’s Murata, the head manufacturer of SAW devices, now has 200-300 filter series products. With the accumulation of technology and business development of Zuolan Microelectronics, it will also break through hundreds of filter series products.

Accelerating the cohesion of industrial ecology

“In the future, the more technologies we master, the more likely it is to propose solutions that are more in line with market needs. After all, not a single technology can meet all communication frequency bands, and multiple technologies may also be superimposed.” Bruce said.

Therefore, in response to the current urgent market demand, especially the high-end filter market, he pointed out that this is a process that requires a steady and steady operation. With joint breakthroughs in design and technology, industrialization advantages can be formed to gradually increase market share.

“The domestic industry chain is paying attention to the reputation of localization. As the industrial ecology gradually matures, it is expected that the integrated head effect will gradually form in the next 3-5 years, and there will be a certain degree of competition with overseas giants. This is what we hope to see It is also the goal that the industry is working hard.” Bruce said that in the filter industry, China’s ecology is still on the way of catching up. Therefore, the industries need to form joint forces and grow together with an open mind to finally realize this hope. If the industries only consider short-term vicious competition in low-end price wars, it will only go the same way.

Over the years, only major terminal mobile phone manufacturers have gradually increased their investment in domestic companies in the RF front-end field. The 21st Century Business Herald reporter’s rough statistics found that, in addition to Huawei’s Hubble Investment, which is actively investing in the semiconductor field, investment cooperation among other industries also shows a positive trend.

The reporter inquired about Qixinbao’s data and found that OPPO Guangdong Mobile Communications Co., Ltd. was used as the main body to query, and its successive shares in RF chip related companies include: Ruishi Chuangxin (Shenzhen) Technology Co., Ltd. 7.17% shares, VJ Chuangxin (Tianjin) Electronics Technology Co., Ltd. 3.39% shares, etc.

Vivo Mobile Communications Co., Ltd. also has a 2.61% stake in VJC (Tianjin) Electronic Technology Co., Ltd.

Hubei Xiaomi Yangtze River Industry Fund Partnership (Limited Partnership) as the main body, Qixinbao shows that its shares in RF chip companies include: Wuxi Haoda Electronics Co., Ltd. 5.3% shares, Beijing Anray Microelectronics Technology Co., Ltd. 4.82% Shares, 3.3% of Guangxi Chipset Microelectronics Co., Ltd., and 1.74% of VJ Chuangxin (Tianjin) Electronic Technology Co., Ltd., etc.

“The domestic industrial environment is changing. Now the entire industrial ecosystem is actively participating in investment and cultivating capabilities. Some large terminal manufacturers will also bring some quality control suggestions to filter manufacturers, and industry investors will also send engineers to help some Start-up companies improve their capabilities.” Bruce believes that as this positive industrial synergy is gradually formed, it will accelerate the entire industry into a virtuous circle and continue to iterate on technology. This will soon be able to compete with the capabilities of major overseas factories.

“At present, the domestic industrial ecology is deploying the mid-to-high-end filter market, and the technology itself is constantly evolving. After breakthroughs in technology, and then promoting the implementation of manufacturing capacity, etc., we can better improve the IDM layout link.” He continued, At the same time, compared with the slow response of overseas radio frequency manufacturers to the demands of some terminal manufacturers, it does not exist in China. This is also the advantage of the domestic industrial chain.

The Links:   G156HAN023 2MBI300U2B-060

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