1. 5g era starts, RF front-end demand grows rapidly. With the continuous growth of global 5g commercial and Internet application demand, the global 4G / 5G penetration rate is expected to further improve in the future. From 2G / 3G to 4G / 5G, the frequency of wireless side is increased, and the demand for RF front-end is growing rapidly. 2g-5g single phone RF demand is expected to be $3, $8, $18 and $25 respectively. According to yole’s prediction, the entire RFFE and RF front-end market will more than double that of 2017, reaching US $35.1 billion by 2023, of which the composite growth rate of filters will reach 19%.
2. Facing the trend of high-frequency wireless communication and modularization of RF front-end, discrete RF devices, such as filters, still have broad development opportunities for low-end intelligent computers, Internet of things and Internet of vehicles. RF front-end modularization is the development trend of high-end smart machine market. American enterprises such as Qualcomm, Broadcom and oorvo are at the forefront of the industry, while MediaTek and Murata are the representatives in the Asia Pacific region. But at the same time, based on the differences of cost and product demand, there is still a broad space for the mode of RF discrete devices, which is also the rationality of domestic RF front-end enterprises’ phased market breakthrough.
3. The filter market space is outstanding, and American and Japanese enterprises occupy a dominant position. In the RF front-end market, the value of filters accounts for more than 50%. The market demand in 2017 is about US $8.1 billion, and it is expected to be about US $22.5 billion by 2023. In recent years, the industry leaders in the United States and Japan have been increasing their M & A integration, and the relevant RF front-end enterprises have built an ecosystem composed of internal capabilities, intellectual property blocks and OEM services. The market share of filters, including Broadcom, Qualcomm, qorvo and skyworks in the United States, Murata and solar power in Japan, exceeds 90%. The United States has the advantage in BAW filters, while Japan has the lead in SAW filters.
4. The global share of Chinese brand smart machines is more than half. Driven by the demand of 5g, Internet of things and Internet of vehicles, the filter has broad space for localization. According to TDK’s forecast, in 2021, the sales of 5g mobile phones will grow by 570%, the cellular wide area low-power Internet of things products will grow by 65%, and the new energy vehicle industry will grow by 53%, driving the rapid growth of RF front-end markets such as filters. At the same time, the top seven smart phone manufacturers in the world and Chinese manufacturers occupy 5 seats, with a total share of more than 50%, providing broad space for domestic filter enterprises to replace domestic ones. According to intelligent research information, in 2019, the output of SAW filters in China will be 504 million, and the consumption will be 15.12 billion. Affected by technical factors, it is estimated that the output of SAW filters in China will gradually increase in the future. It is estimated that by 2025, the output of SAW filters in China will reach 2.802 billion, and the consumption will exceed 15.5 billion.
Summary of the report
The era of 1.5g starts, and the demand of RF front end grows rapidly
At present, the number of 4G connections accounts for about half of the world’s total. Since 2020, 5g demand has gradually increased. In terms of regions, 4G network is the main network in Greater China and North America, and the proportion of 5g connections is expected to be close to half by 2025; the proportion of 4G / 5G connections in sub Saharan region is also expected to increase significantly by 2025.
According to yole data, GSMA and HSPA technologies will be phased out from 2017 to 2023 due to the reduction of traditional function machines. LTE technology will become more and more mainstream technology: the corresponding compound growth rates of LTE-A and LTE APRO are 8% and 20% respectively. The compound growth rate of 5g mobile phones will reach 54%. The growth rate of 5g millimeter wave mobile phones will reach 346%.
The new frequency band of 5g is much higher than that of traditional 4glte. These include the new 5g band 1 (FR1) and band 2 (FR2), and the upper limit of wireless spectrum is also expanding. According to skyworks, the RF front-end demand of single 5g mobile phone is about $25, covering about 30 frequency bands and more than 70 filters.
According to the statistics of qyrelectronics Research Center quoted by Zhuosheng micro announcement, from 2011 to 2018, the scale of global RF front-end market grew at a compound annual growth rate of 13.10%, reaching US $14.91 billion in 2018. Affected by the commercial construction of 5g network, the global RF front-end market will usher in rapid growth from 2020. From 2018 to 2023, the global RF front-end market is expected to grow at a compound annual growth rate of 16.00%. It will continue to grow at a high speed, reaching US $31.310 billion in 2023.
2. The market of RF front-end is dominated by America and Japan, and the position of filter is prominent
In recent years, through merger and integration, radio frequency giants in North America have further improved their overall product system. Qualcomm acquired TDK EPCOS; Murata, qorvo and skyworks further improved its product portfolio. Through M & A and integration, relevant RF front-end enterprises build a very complex ecosystem, which is composed of internal capabilities, intellectual property blocks and OEM services.
RF front-end technology mainly focuses on filter, PA, low noise amplifier and RF switch. At present, the global RF market is dominated by skyworks, Qualcomm, qorvo, Broadcom and Murata. The five RF giants have more than 90% market share in PA and LNA.
In terms of filter, there are two main technologies: surface acoustic wave (SAW) and bulk acoustic wave (BAW). At present, Murata accounts for half of the saw filter market, skyworks accounts for about 10%, and the rest is carved up by solar power generation and TDK. The market of BAW filter is occupied 90% by American enterprises.
According to the radio frequency front end filter industry analysis report, the radio frequency front end in 5g era will be mainly modular products. The application of discrete filter will be lower and lower. (take phase 7 and phase 7 Lite for example). In the design scheme, the filter is mainly used for the WLP filter which can be integrated, while the separated CSP filter is less.
3. The RF front-end shows the trend of modular integration, and the space of discrete devices is still vast
2019 is the first year of 5g mobile phones, and the penetration of sub6g mobile phones will accelerate in 2020. In addition to apple, Huawei, ZTE, vivo, Xiaomi, oppo, Yijia, Samsung and other smart phone brands will all launch 5g mobile phones in 2019. Fierce market competition forces mobile phone manufacturers to quickly introduce new technologies. The core change of 5g mobile phone is that the baseband chip should support 5g function, and the RF front end and antenna should be matched with it.
Previously, Apple’s iphone11 (which does not support 5g) RF front-end was mainly composed of modules of skyworks, Avago and qorvo, reflecting the trend of high integration; Samsung’s high-end product note10 has relatively few modules (Avago, skyworks, qcomm, etc.), while the low-end product S10 contains more modules (Murata, Avago, skyworks, etc.). Xiaomi / vivo / oneplus has released several high-end 5g mobile phones with high RF front-end modular integration, while Huawei / ZTE has more RF front-end devices (Murata, Hisilicon, qorvo, qcomm, etc.).
On October 30, Murata released the second quarter report of 2020 (7.1 ~ 9.30). In the first half of the year, the company’s revenue growth rate was – 1.2%, and the single Q2 company’s revenue growth rate was + 30.1%. In the first half of this year, the growth rate of piezoelectric components was – 4%, and that of Q2 was + 30.2%, mainly due to the growth of SAW filter sales in mobile phones. According to the statements of qorvoq2 and skyworks, the growth rate of revenue in the single quarter of qorvoq2 was 31.44% (1.53% in the previous quarter) and that of skyworks was 15.64% (3.94% in the previous quarter). By comparison, the revenue of Murata, the leader of RF discrete devices, has maintained a high growth rate, which shows the growth potential of RF business.
4. Relying on the advantages of China’s intelligent terminal cluster, the RF front-end has wide localization space
According to TDK’s forecast, 5g mobile phone demand will grow by 570% in 2021, and low-power cellular products will grow by 65%.
According to yole’s forecast, the mobile market is now saturated. The growth rate of smartphone agr in 2017-2023c is expected to drop to + 2.9%.
According to countpoint data, Q2’s global smartphone share in 2020 will be 20% for Huawei, 20% for Samsung, 14% for apple, 10% for Xiaomi, 9% for oppo, 8% for vivo, and 3% for Lenovo. The top seven smart phone companies are Chinese companies.
According to IDC data, in Q2 of 2019q2-2020, Huawei’s mobile phone share increased from 17.7% to 20%, and Xiaomi’s from 9.7% to 10.2%; the proportion of the top five suppliers increased from 69.5% to 72.8%, further increasing.
According to the information of electronic enthusiasts, the self-sufficiency rate of SAW filter in China will be less than 5% in 2019, and there is a huge space for development.
According to the official website of Zhuosheng, RF front-end module integrates two or more kinds of discrete devices such as RF switch, low noise amplifier, filter, duplexer and power amplifier into one module, so as to improve the integration and performance and miniaturize the volume. RF front-end modules can be divided into different types of RF front-end modules with different functions according to different integration modes, such as difem (integrated RF switch and filter), lfem (integrated RF switch, low noise amplifier and filter), femid (integrated RF switch, filter and duplexer), pamid (integrated multi-mode multi band pa and femid), etc. At present, the company can provide some RF module products, mainly used in mobile intelligent terminal products.
In the first half of 2020, the revenue of Zhuosheng micro RF switch and RF low noise amplifier accounted for 85.46% and 12.13% respectively. In recent years, the rapid growth of Zhuosheng’s Micro revenue / net profit also reflects the potential of domestic enterprises to accelerate development through high-quality RF products.
Editor in charge ajx