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5G era is coming. As the shipment volume of 5G smartphones continues to grow, and have increased frequency bands and the complex signal tone change, which will greatly increase the overall usage of mobile phone PA (power amplifier). It is expected that the output value of a single mobile phone RF component will also increase significantly. In addition, 5G infrastructure also requires the addition of RF components. The compound semiconductor community and highly related to the smart phone business include Wenmao, Hongjieke and Brand New, which is expected to benefit from the development trend of 5G.
5G infrastructure construction, Wenmao benefited from the large
5G related businesses, including 5G infrastructure construction and 5G mobile phone components. The mature 5G environment depends on 5G infrastructure construction, and infrastructure construction, including fiber optic networks, base stations, etc., all require compound semiconductor components.
For base stations, the so-called Pre 5G phase setting is currently mainly set up in Sub-6 GHz, and many telecommunications operators have successively built them from 2018 to 2019.
Wenmao actively deploys base station business. Wenmao base station PA is classified in Infrastructure (communication infrastructure). This product line accounts for about 15% to 20% of the annual revenue. This business application also includes base stations, optical fiber, satellite communication related, etc. In terms of base stations, it covers American, European and Asian customers.
Infrastructure's revenue increased by more than 40% in the first half of the year, which is in line with the current situation of 5G infrastructure. Wenmao pointed out that the demand for base station-related products in the second half of the year is still not weak. According to market expectations, Infrastructure's revenue in 2019 is expected to grow by double digits.
Brand new Currently, the main application of 5G infrastructure-related services is the receiver Receiver required for fiber optic communication. It is mainly supplied to Taiwan and mainland optical communication factories indirectly, and the proportion of revenue is estimated to be within 20%. However, the customer bid situation is not very clear, and the subsequent situation remains to be observed; as for the GaN (gallium nitride) used in 5G base stations, it is in the certification stage and must be determined by the adoption of client .
Hongjieke entered the 5G base station related market through a Taiwanese IC design company, and is estimated to be a small cell. Since the 5G signal coverage is small and the signal strength is weak, a large number of small base stations of relay station nature must be built. The market expects that the total number of 5G base stations and small base stations will be more than multiples of 4G base stations in the future, and Hongjieke will have the opportunity to benefit.
5G mobile phones grow, and the value of RF components has also increased. In the environment, infrastructure construction takes the lead, and the terminal device configuration content will follow. For smart phones, the arrival of 5G will also increase the usage of RF components.
may have a share of less than 1% of 5G mobile phones compared with 2019. According to IDC estimates, 5G mobile phones will account for 8.9% of smartphone shipments in 2020, with a total of more than 120 million units. It is expected that by 2023, the proportion will reach more than 28%.
5G has increased the signal tone to be more complicated. Therefore, compared with 4G PA, which can be integrated with 3G PA, 5G PA cannot be integrated, and PA needs to be added, and the new frequency band also needs to be added, so the overall mobile PA usage will be greatly increased.
Wenmao said that a 5G mobile phone is expected to increase the usage of 5 to 6 gallium arsenide chips. In the future, as the 5G mobile phone market continues to grow, it will provide excellent opportunities for compound semiconductor manufacturers.
According to the supply chain, the output value of a single 5G mobile phone will reach about US$25, an increase of nearly 40% from 4G mobile phones. The same mobile phone is converted to 5G, and the gold content of the radio frequency components contained in it has been greatly improved.
According to research and research agency YOLE, the global RF component market size will grow from US$15 billion in 2017 to US$35 billion in 2023, with a compound growth rate of 14% from 2017 to 2023. 5G mobile phones will play an important role in market driving.
foundry factories have expanded production to meet demand
Global GaAssinide wafer production capacity is Wenmao’s largest. Wenmao’s production capacity reached 32,000 pieces per month at the end of last year, and expanded to 36,000 pieces in the first half of this year. However, the subsequent market conditions are better than the company’s expectations. Therefore, when entering the peak season of the third quarter, the production capacity is very tight and can no longer absorb the order demand. The increase in order demand is mainly due to the benefits of PA conversion in Asia, and 5G mobile phones have not yet fermented.
In response to the subsequent growth of 5G mobile phones, China's increase in semiconductor self-sufficiency rate is in full swing, and 3D sensing demand has started again. Wenmao has launched a production expansion plan. It is expected that the aircraft will enter one after another from the fourth quarter of this year and will be put into production in the second quarter of next year. The production capacity is expected to increase by another 4,000 to 5,000 pieces per month.
wafer foundry capacity is the second largest. Hongjieke, which is also facing the pain of accepting orders than production capacity in the third quarter of this year. It is digesting orders through the bottleneck removal of production capacity; Hongjieke's current production capacity is about 10,000 pieces per month. After removing the bottleneck removal, it is expected to only increase by about 1,000 to 1,500 pieces, which is still not enough to cope with demand.
As for Hongjieke's previous plan to expand the second factory, it is currently accelerating its construction. It is expected that the first quarter of next year, the equipment will be deployed and put into production and will be put into production. The maximum production capacity of the second factory can reach 22,000 pieces per month. In the initial stage, about 5,000 to 8,000 pieces will be issued first, and then it will gradually expand according to order demand.
Epilogue Factory is not as new as Wenmao and Hongjieke, which is currently facing tight production capacity. The new 12 MOCVD Epilogue equipment have been purchased in 2018, and the current production capacity is sufficient to support the needs of next year's growth.
*Disclaimer: This article is original by the author. The content of the article is the author's personal opinion. The reprint of the Semiconductor Industry Observer is only to convey a different view, and does not mean that the Semiconductor Industry Observer agrees or supports this view. If you have any objections, please contact the Semiconductor Industry Observer.
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