Accelerating The Localization Of Radio Frequency Chips: The Ecological Joint Force Cultivation Of Capitalized Electronic Industry In Transit

A RF chip has become the core element of the neck of the domestic mobile phone terminal. However, it is totally different from the situation that the industrial chain manufacturers still call for a chance for domestic manufacturers in the past few years. Nowadays, the domestic ecology is enthusiastic about cultivating RF manufacturers, and more start-up companies have emerged.

In terms of capital market, in addition to Zhuo Shengwei and maijie technology which have been listed, there are also companies constantly impacting IPO. According to the statistics of yole, a research organization, in 2020, the number of companies mainly involved in the production of RF front-end devices in the world will continue to increase from China. But what can not be ignored is that from the overall share point of view, Chinese manufacturers are still in the stage of low share and low value.

Specifically, the RF front-end part is also subdivided into multiple components, among which the filter occupies a higher value. Yole data shows that in terms of RF front-end value, filters account for about 53%, power amplifier (PA) accounts for about 33%, switches account for about 7%, and others account for about 7%.

Industry insiders told the 21st century economic report that the strength of domestic companies in the fields of power amplifiers, switches and other fields has become increasingly strong, but there are still some differences in the strength of filters compared with overseas head manufacturers. This is also the ability direction that industry urgently cultivates in these years.

Back to the history, the early filters were mainly used for TV frequency modulation, but with the rise of digital TV, the related technology has been phased out; With the further rise of the new communication era, the filter is booming again. However, it is precisely because of the ups and downs of the industry here that large overseas manufacturers have persisted, but domestic manufacturers have not actively followed up. To a certain extent, the overall domestic strength of the filter market is weak.

With the joint efforts of large terminal factories and industrial investment institutions in recent years, although domestic filter manufacturers are still in the process of technological capability evolution and capacity climbing, a strong ecological chain development environment has been gradually formed.

Monopoly of overseas large factories

In short, RF is mainly responsible for the reception, conversion and presentation of communication signals, which is divided into two channels of information transmission and reception, and the filter is a device required by both functions.

The reason why the RF front-end device, especially the filter, is determined to be "neck jamming" technology, because so far, overseas large manufacturers have formed a monopoly in this field.

"SAW filters comparison 2020" released by yole has taken apart 130 mainstream smartphones on the market from 2017 to 2019. Among them, 1395 integrated surface acoustic wave filter (SAW) components were disassembled from 10 manufacturers: Murata (Japan), Weixun (USA), scarlet (USA), Qualcomm (USA), Weisheng (Korea), Sunray (Japan), Kyocera (Japan), jiashuo Technology (Taiwan), Sony (Korea) and Haoda Electronics (mainland China).

Among them, the top five SAW filter manufacturers, including Murata, rf360, Sunray, sika and Weixun, together occupy about 95% of the market share. The presence of Chinese manufacturers is obviously weak.

According to the prospectus of Haoda electronics, a filter manufacturer that is applying for IPO, according to saw's global market share data, Murata accounts for 47%, high pass accounts for 21%, and solar induced power accounts for 14%. Domestic listed companies do not disclose the specific proportion, but Haoda electronics only accounts for 0.92%.

Among them, the data on the share of overseas manufacturers is from the financial report of 2018, while the data of Haoda is based on the financial report of 2020. In general, Japan, which is stronger than semiconductor materials, undoubtedly occupies a significant advantage among them, followed by American manufacturers.

This is only one of the technical routes. The other filter technology BAW, which is biased towards high-frequency scenarios, is mainly developed by American manufacturers Avago and qorvo. At present, high technical and patent barriers have been established, and domestic manufacturers have relatively few layouts in relevant fields.

With the continuous evolution of the communication era, the demand of various signal exchange terminals for filters is also growing exponentially, such as in communication base stations, mobile phone terminals and other equipment.

According to a rough estimate, communication technology has evolved from 2G to 5g, and the number of mobile phone communication bands has increased from four to more than 50. In high-end 4G mobile phones, the filter consumption is generally no more than 40. At present, in the early development of 5g mobile phones, the single filter consumption has exceeded 70.

Yole predicts that the global market size of mobile terminals and WiFi RF front-end chips will increase from US $15 billion to US $35 billion in 2017-2023, with a compound growth rate of 15%; During the same period, the global filter market scale increased from 8 billion US dollars to 22.5 billion US dollars, with a compound growth rate of 19%.

This explains that there will continue to be a huge demand for filters in these years, and even in the years to come. Not only the popularity of listing in the primary market is gradually rising, but the attention of the secondary market is also increasing.

An executive of a filter start-up company told reporters that this means a new demand for the number of filters and a new challenge to the complexity of RF device architecture. The simple calculation is that the link almost doubles, and the number of filters and antennas doubles.

Among them, saw prefers data processing with medium and low frequency, while BAW prefers data processing with high frequency. The former is dominated by Japanese manufacturers, with larger market application space, but the value is lower than that of BAW. The latter is dominated by American manufacturers with relatively narrow application space.

"As most of the overseas RF manufacturers are listed companies, they will attach importance to the 30% gross profit margin red line. Therefore, in the early stage, China has taken the replacement of overseas medium and low-end RF devices as the development path. With the further improvement of localization ability, breakthroughs in the high-end market are just around the corner," the above-mentioned executives pointed out.

Domestic ecological joint efforts to break through

In the past few years, there were also domestic RF device manufacturers crying out: to give the domestic industrial ecology an opportunity. Today, in the process of continuous changes in the external environment, this domestic ecological joint force has been accelerating the implementation.

This can be seen from the data released by the company. According to the prospectus of Haoda electronics, the main content of the company's related sales is to sell filter and duplexer products for mobile phone RF front-end to well-known mobile phone terminal brand Xiaomi, Huawei and Huaqin, a well-known OEM of mobile phone ODM. From 2018 to 2020, the amount of goods sold by the company to related parties was 1.6137 million yuan, 47.194 million yuan and 98.8866 million yuan respectively, accounting for 0.98%, 22.86% and 29.75% of the operating income respectively, both of which increased year by year.

At the same time, industrial investment is also involved. According to Haoda electronic information, before the IPO, Xiaomi fund and Huawei's Hubble investment held 5.3% shares respectively.

"We obviously feel the change of domestic industrial environment." the executives of the above-mentioned companies told the reporter of 21st century economic news that the whole industrial ecology is actively participating in investment and cultivating the company's technical capabilities: some large terminal factories will bring quality control suggestions to filter manufacturers, and industrial investors will send engineers to help some start-up companies improve their capabilities. "With the gradual formation of this positive industrial joint force, the whole industry will be accelerated to enter a virtuous circle and continue to carry out technological iteration. This will soon promote the ability of domestic companies to become closer to overseas large factories."

Of course, this is also related to the response of overseas manufacturers. Some industry insiders told reporters that since most of the head RF manufacturers are from overseas, their response mechanism to Apple's feedback or customized solutions will be relatively higher than that to Chinese terminal manufacturers. Of course, many factors, such as culture and geographical closeness, have caused this phenomenon, and this is another external factor that accelerates the positive embrace of domestic ecology.

Capacity is another bottleneck. Although the RF devices are not affected by Moore's law and have low requirements on process, the manufacturers who can provide production capacity mainly come from OEM factories represented by Taiwan Wenmao, in addition to the independent production of the mainstream RF manufacturers mentioned above. But as a whole, most manufacturers of RF front-end devices mainly adopt IDM mode, self-developed and self-produced.

This also reverses the domestic large and small-scale manufacturers in related fields to speed up the deployment of joint venture factory building capacity, while there are still some stages such as the capital investment requirements and the production capacity climbing.

"IDM mode is the main choice of most filter companies, because it takes a long time for other OEM manufacturers to match the products you need; we also found that the way we build our own factories can produce higher quality products," the above-mentioned executives told reporters.

At present, from the perspective of the strength of the whole industry chain, the domestic RF front-end industry ecology has not yet appeared the development environment of cross competition, and more or more in their own development. Some industry insiders predicted to the reporter that in three years or so, it is expected to see the trend of cross competition and integration of domestic related industry companies. At that time, it will embark on the development and expansion path of large factories outside Shanghai, and the company's technology and mass production capacity will be further improved.