(report producer: CICC Securities )
1. Demand side: There is a structural differentiation trend, and the automobile and industry are in high prosperity
1.1 Smart car: In the future, it will be the largest smart terminal, and the growth potential of automotive electronics is huge
In the future, automobiles will become the largest smart terminal, and their products and service systems will jointly form a new scenario and business model, becoming a new ecosystem. From the hardware perspective, the value of electronic and electrical related vehicles will be greatly increased. Traditional fuel vehicles account for 15%, and among the new energy vehicles BOM costs, at this stage, automotive electronics (including electronically controlled electric drives) account for 20%, the largest except batteries, and the proportion is expected to increase further in the future. Among electronic components, the largest market is ECU/DCU (computing units including computing chips), power semiconductors, and other electronic components. The fastest composite growth is ECU/DCU, power semiconductors, other electronic components, etc. Other automotive electronics include MCU, analog IC, storage, passive components , PCB, panel, etc.
1.1.1 Power semiconductor: the largest increase in tram semiconductors, demand for IGBT, SiC, etc. is growing rapidly
Power semiconductors are the largest part of the value increase of electric vehicle semiconductors, and there is huge room for growth in the future as electric vehicle sales grows. Assuming that the power semiconductor value of fuel vehicles is US$88, according to statistics from Strategy Analytics, the incremental value of power semiconductors of pure electric vehicles exceeds US$400, and it is estimated that the global automotive-grade power semiconductor market size will reach US$9.8 billion in 2022. Among them, 75% of the power semiconductors in electric vehicles are used in inverter in the electric drive system, such as IGBT module , MOSFETs module and SiC MOSFETs module, while the remaining 25% of the power semiconductors are used in vehicle chargers (OBC), DC-DC boost/down (DC-DC), battery management systems, electric air conditioners and other equipment.
Most of the incremental value of electric vehicles comes from IGBT modules. Bicycle MOSFETs are worth about 400 yuan, and one IGBT module is about 1,000 yuan. Currently, A0/A00-class electric vehicles use one inverter and one IGBT module. If it is a four-wheel drive electric vehicle, it generally uses 2 modules, with a value of about 2,000 yuan, and buses use 3 modules, with a value of about 3,000 yuan, so the average IGBT bicycle value is about 2,000 yuan. Taking 6.6KW slow charging as an example in the charging pile field, it requires about 20 discrete IGBT and MOSFET devices, with an overall cost of less than 300 yuan.
is expected to grow to RMB 46.4 billion in 2025, of which electric vehicles are the largest market. In 2021, global electric vehicle sales increased by 108% from 3.24 million in 2020 to 6.75 million vehicles, and market share increased from 4.2% in 2020 to 8.3%. Electric vehicles alone contributed about US$1.1 billion in IGBT sales, and it is expected that the global IGBT market size will reach US$8.78 billion in 2021. IGBT modules are often used in the core components of inverters in electric vehicles. As the penetration rate of electric vehicles in the global area, is rapidly increasing, the share of the entire market is expected to increase from 55% in 2020 to 62% in 2022. IGBT single tubes are used in electric vehicles, photovoltaics and other fields, and the expected share remains unchanged, while IPM modules are more used in home appliances and industrial control fields. However, due to the slowdown in the growth of the home appliances and industrial control market, the share in the entire IGBT market is expected to gradually decline. The domestic IGBT market benefited from the rapid growth of new energy-related demand such as electric vehicles, wind power, photovoltaics, and other new energy sources. It is expected that the size of the domestic IGBT market will grow to RMB 46.4 billion in 2025.
2022 will be a year when the share of domestic IGBT manufacturers has increased significantly. The production expansion progress of overseas leading IGBT manufacturers is lower than expected. In contrast, domestic manufacturers have a deeper understanding of domestic electric vehicle policies and are more active in expanding production. Whether it is Silan Micro, BYD , which adopts IDM production model with Times Electric, or Star Semiconductor , which adopts wafer foundry model, the supply ratio of all has increased significantly in 2022, and the share of domestic manufacturers will reach 43% in 2022. We believe that Times Electric, Star Semiconductor, BYD and Shilan Micro, which were first to implement the introduction, will continue to benefit from the domestic production process of automotive-grade IGBT modules.
SiC power devices are expected to become standard for car manufacturers, with the market space of nearly US$5 billion in 2026. Currently, automobile manufacturers that use silicon carbide modules as inverters are represented by Tesla and BYD. Among them, the main drive inverter of Tesla Model3 uses 24 SiC MOSFETs, each module has 2 SiC bare crystals (Die) and a total cost of 48 SiC MOSFETs, with a total cost of about 5,000 yuan. The 6-arm of BYD Han Han rear-drive three-phase bridge uses 30 SiC MOS modules, with a total cost of 7,000 yuan. Among the new models released in 2021, NIO ET, Xiaopeng's G9, GAC Aion's LX and Great Wall's Ankylosaurus all plan to use silicon carbide modules as inverters. One system uses 30-50 SiC chips. Taking Xiaopeng's G9 as an example, a silicon carbide module price reaches US$800, almost 5 times that of silicon-based modules. WolfSpeed, the global leader in silicon carbide, expects that the market size of automotive silicon carbide power devices in the industry will grow from US$1.6 billion in 2022 to US$4.6 billion in 2026, and the proportion of automotive use in the automotive sector is expected to be 70%-80% of total demand.
1.1.2 Sensor: The information input required for autonomous driving has increased significantly, and the growth momentum of cameras, lidar , etc. is strong
Autonomous driving and assisted driving will be widely used in smart cars in the future. Autonomous driving and ADAS are divided into three technical architectures: perception layer, decision-making layer, and execution layer. The function of the perception layer is to collect and preprocess information about the surrounding environment. The decision-making layer integrates, analyzes and judges the collected data, and the execution layer responds in real time based on the judgment results. The three-layer technical architecture corresponds to (1) Where am I? That is, perception and positioning; (2) Where am I going? Summary decision and planning; (3) How can I go? That is, control and execution. The perception layer is the "eye" of the car, including vision, mmWave radar, , lidar and other sensors are all over the body to ensure driving safety.
High-level autonomous driving requires the use of a large number of cameras as visual information input. The mainstream sensing technologies of autonomous driving and ADAS sensing layers include vision, electromagnetic radar (mainly millimeter-wave radar and lidar) and ultrasonic radar. These sensors are spread throughout the vehicle body, achieving 360-degree dead angle and far-middle-close scanning to ensure driving safety. The higher the level of autonomous driving, the more sensors are required. Smart cars above L3 will need to use a large number of cameras as input to visual information to ensure the safety of autonomous driving. Therefore, car camera has become a huge incremental market. The higher the level of
, the more cameras and sensors are needed for autonomous driving. For example, the L3-level Audi A8 uses 5 cameras, 1 lidar , 1 long-range millimeter wave radar, 4 medium-range millimeter waves, and 12 ultrasonic radars; the L3-level NIO ET7 is equipped with 11 high-definition cameras, 12 microwave radar , 5 millimeter wave radar, and 1 ultra-long-range high-precision lidar. Since cars have high requirements for safety redundancy, and visual information is the core input at the ADAS perception level, the number of cameras will also show a rapid growth trend. Generally speaking, the L2 level autonomous driving is equipped with an average of 6 cameras, which undertakes the functions of parking assistance (PA) and lane keeping assistance (LKA). The L3 level autonomous driving is equipped with an average of 13 cameras, which adds automatic braking (AEB), driver monitoring (DM), traffic congestion assistance (TJA) and other functions; the L4 level autonomous driving is equipped with an average of 29 cameras, which adds high-speed driver assistance and sensor fusion; and to achieve L5 level unmanned driving, more than 30 cameras are required to assist.
1. The use scenarios of vehicle cameras include front view, surround view, side view, rear view and cabin surveillance.According to the current mainstream intelligent vehicle sensor matching scheme, the camera usage scenarios include (1) ADAS front view, which realizes driving assistance functions, such as lane departure warning, pedestrian collision warning, and traffic sign recognition; (2) 360° surround view, side view, eliminate blind spots, and provide the driver with a 360° circumference, which is usually installed in the exterior rearview mirror, the C-pillar in the car, etc. In addition, the side view camera is also used for biometric functions, such as face recognition that we often use in the smart cockpit to open the car; (3) Rear view, obtaining the rear information of the vehicle, such as safe parking in the automatic parking scene; (4) Internal view, which is usually installed on the steering wheel, central control, ceiling, etc., to achieve monitoring of the situation in the car, such as driver certification, driver attention monitoring, etc. When the driver experiences driving fatigue, the car The vehicle will remind the driver through the form of alarms (sound, light, slowing down, and even steering wheel vibration); (5) The on-board camera can also be used for functions such as taking photos, video conferencing, in-car payment, etc. For example, the Byton M-Byte can use gestures to control the central control instrument interface with the camera.
2. The market size of the automotive lens will grow rapidly, with the increase in quantity and specification upgrades. Car lenses are important components of car cameras, and the camera module and lens groups are usually one-to-one. On the one hand, with the increase in ADAS penetration rate, the number of on-board lenses used by a bicycle will increase from the current 2 to 6-8, bringing a large market incremental space. On the other hand, due to the requirements of ADAS lenses for high reliability, high heat resistance, wide angle, wide dynamics, etc., the value is greatly improved compared with traditional surround view lenses. Currently, the average unit price of ordinary car surround view lenses is 5-6 US dollars, and the price of ADAS perception lenses can reach 10-20 US dollars. We judge that the global automotive lens market size will grow from approximately US$700 million in 2021 to more than US$3 billion in 2025, and will reach more than US$7 billion in 2030.
3. The volume and price of vehicle-mounted image sensors have increased, and the growth momentum is strong. In the field of automotive electronics applications, a variety of application scenarios have put forward different detailed requirements for chip design. For example, night vision performance, higher dynamic range, excellent LED flicker suppression performance, and invisible accurate imaging of global shutters. As the use scenarios of on-board cameras become more abundant and the performance and requirements are improved, automotive CIS has also ushered in an increase in both volume and price, and the industry's growth momentum is strong. According to statistics from Frost & Sullivan, in 2020, the shipment and sales of CMOS image sensors in the automotive electronics field were US$400 million and US$2.02 billion, respectively, accounting for 5.2% and 11.3% respectively; it is expected that the shipment and sales of CMOS image sensors of automotive electronics will reach US$950 million and US$5.33 billion in 2025, with a market share of 8.2% and 16.1% respectively, and the annual compound growth rate is expected to reach 18.89% and 21.42%. According to Frost & Sullivan, ON Semiconductor, Ouve Technology and Sony share 54%, 29% and 8% in the 2020 smart car CMOS image sensor market, respectively.
4. In the first year of mass production of lidar, the long-term growth trend of the industry is clear. Compared with sensors such as cameras and millimeter-wave radar, lidar has the advantages of high resolution and less affected by environmental conditions. It is a must-have option for autonomous driving system , which has gradually become a consensus in the industry. In 2021, models including NIO ET7, Xiaopeng P5, WM M7, Jihu Alpha S new HI, SAIC Zhiji L7 and other models are all equipped with lidar as sensors for the autonomous driving system. As a number of models equipped with lidar are gradually launched, we expect 2022 to be the first year of mass production of lidar. According to our estimates, under conservative estimates, the size of the lidar market in the ADAS field in China will be US$1.9 billion in 2025, and the optimistic estimate will reach US$4.5 billion. Looking around the world, Strategy Analytic predicts that the demand for lidar in the ADAS field will grow from 48,000 units in 2020 to 9.707 million units in 2028, with a CAGR of 94.2% from 2020 to 2028. According to the forecast of Frost&Sullivan, the global automotive lidar market size will exceed US$8 billion in 2025, and the Chinese automotive lidar market size will exceed US$2 billion.
upstream components account for more than 40% of the cost of lidar, and will benefit first as the industry breaks out in the future.In addition, a series of optical devices such as optical lenses, filters, and protective covers also cost more than US$100, which is more than 10%. According to Systemlus Consulting data, the laser source BOM of the 4-wire rotary mirror lidar SCALA (4-channel 905nm laser) accounts for 23%, and the BOM of the rotary mirror mechanical unit accounts for 13%; the laser source BOM of the double-weed rotary prism lidar Livox accounts for 7%, and the BOM of the optical component 54%. Therefore, upstream components such as laser sources and optics are the core components of mechanical and semi-solid-state lidar BOMs, and will benefit first as the industry explodes in the future.
1.1.3 MCU: Automobile electrification and intelligence drive growth, automotive-grade MCUs have increased in both quantity and price
MCU has a vast space of nearly US$20 billion, accounting for nearly 30% of China. Global Market, According to IC Insights, global MCU sales rebounded with strong growth in the economic recovery in 2021. The MCU market climbed 23% after falling 2% in 2020, reaching a new high of US$19.6 billion, with a compound growth rate of 3.5% in 2015-2021 and is expected to reach US$27.2 billion in 2026, and a compound growth rate of 6.8% in 2021-2026. In the Chinese market, according to IHS, the domestic MCU market is expected to grow significantly by 36% to RMB 36.5 billion (US$5.6 billion, accounting for 29% of the world) in 2021, with a compound growth rate of 12.5% from 2015 to 2021, and is expected to reach RMB 51.3 billion by 2026, with a compound growth rate of 7.0% from 2021 to 2026.
The middle and high-end automotive electronics systems mostly use 32-bit MCUs, and the value is mainly 32-bit. Vehicle MCUs mainly include 32, 16 and 8-bit MCUs, accounting for 77%, 18% and 5% of the value respectively. The 8-bit MCU is mainly used in lower-level control functions such as fan control, air conditioning control, wiper , sunroof, seat control, and gate control module. The 16-position MCU is mainly used in power transmission systems, such as engine control, gear and clutch control, and electronic turbine systems. The 32-bit MCU is mainly used in advanced functions such as dashboard control, body control, multimedia information system, engine control, intelligent and real-time safety systems and power systems.
Compared with consumer and industrial MCUs, automotive grade MCUs have the following characteristics: (1) High technical barriers. The barriers to automotive grade MCUs are relatively high, and most domestic manufacturers are in the catching-up stage in production processes, yield rates, certification standards, etc. (2) It is difficult to verify the automotive regulations. It is necessary to meet the AECQ100 (IC) and ISO 26262 standards, which generally takes 2 to 3 years, and does not have much support for suppliers' short-term performance. (3) Schematic solidification. The global vehicle supply chain has basically been solidified, and it is difficult for new manufacturers to enter. Therefore, in the domestic and foreign markets, automotive-grade MCUs are mainly overseas manufacturers, with high industry concentration, with CR7 reaching 98% in 2020.
Automotive MCU market is dominated by overseas manufacturers, and domestic manufacturers are vigorously deploying automotive-grade MCUs. International landscape: The global MCU market concentration is relatively high, with CR10 being 88.9%, but there is no absolute monopoly. International leaders such as Renesas, NXP, Infineon , STMicroelectronics, Microchip, etc. have a market share of only 10%~20%. Their products focus on high-end fields such as automotive electronics, industrial control and communications. Domestic structure: Domestic MCU manufacturers focus on consumer electronics, Internet of Things, computers, etc., focusing on mid- and low-end products, and rarely deploying automobiles and industrial control medical care. At present, a large number of participants in automotive-grade MCUs are emerging in China, including Gigabit Innovation , Beijing Junzheng , Guoxin Technology , Jiefa Technology, Xinchi, BYD Semiconductor, Xinwangwei, Saitengwei, etc., all of which have or are launching automotive-grade MCUs.
1.1.4 Storage: Automotive intelligence brings massive information, and the demand for data storage has increased significantly
According to Gartner, from the perspective of the value of various semiconductor components, the value of currently in-vehicle semiconductor components is MPU/MCU (accounting for 17%), discrete devices (16%), analog (14%), non-photoelectric sensors (10%), and optoelectronic device (9%), with memory chips accounting for about 9%. It is estimated that the value of a bicycle storage chip is US$50-60.
Automobile intelligence drives data storage demand, and the on-board storage market is expected to accelerate growth.The global automotive storage market size was approximately US$4.6 billion in 2020, with a compound growth rate of 11.4% from 2016 to 2020. It is expected that with the improvement of automotive intelligence level, the automotive storage market will accelerate and grow, mainly reflected in the rapid growth of demand for DRAM (especially LPDDR for new energy vehicles), NAND, etc. The automotive storage market will reach US$5.66 billion in 2021, and will increase to US$11.94 billion in 2025, with a compound growth rate of 21.0% from 2021 to 2025. From the structural perspective, the on-board storage market is dominated by DRAM and NAND, accounting for 57% and 23% respectively. NOR Flash, SRAM and EPROM/EEPROM are also widely used in cars.
1, DRAM The car storage requirements mainly come from ADAS and IVI systems. ADAS and IVI systems mainly use large-capacity storage, including DRAM and NAND. According to SK Hynix , smart cars' demand for DRAM, NAND and other memory chips are mainly concentrated in infotainment & digital instrument panels, ADAS/autonomous driving, back seat entertainment, accident recording, connection, high-precision positioning maps and other applications. The DRAM bit consumption of bicycles can reach up to 150GB, and the total NAND bit consumption can be close to 2TB. From a single application perspective, the bit usage of smart cars such as infotainment & digital instrument panels, ADAS/automatic driving, connection, and rear seat entertainment is equivalent to or exceeding the single-machine usage of flagship smartphones, and the bit usage of accident record, connection, and high-precision positioning maps is also equivalent to that of mid- and low-end smartphones. The current DRAM usage of major models is still low, and only the IVI system is the highest, because the ADAS penetration rate is still low, and compared with the ADAS system, the IVI system has a low technical threshold and a high maturity level.
2, NOR Flash: NOR Flash is suitable for small capacity, fast start, and high reliability fields, and is suitable for various automotive subsystems. NOR Flash initially began to penetrate from automotive broadcasting with a capacity of 1Mb, but over the past decade, on-board communications and other features and features in the central console have increased the storage needs, such as the car dashboard loading various high-resolution graphic displays, which generally requires 12Mb or even up to 1Gb of NOR Flash. NOR Flash has the advantages of long-term data retention, heat resistance (high reliability), fast start, etc. At the same time, the on-board Flash has the characteristics of fragmented distribution and low capacity. Low-capacity NAND does not have cost advantages. Therefore, the application scope of NOR Flash has gradually expanded to many positions such as display screens, digital instrument panels, cameras, etc., power transmission systems, engine control systems and chassis control. According to CINNO Research, the global NOR Flash market size is US$3.1 billion in 2020, and is expected to reach US$3.4 billion in 2021, of which the market size of the in-vehicle NOR Flash is approximately US$600-800 million.
Automobile intelligence drives higher-end NOR Flash demand. As the level of automotive intelligence improves, it needs to be equipped with more memory chips. Many technologies are targeting the core applications of vehicles, while NOR Flash extends from subsystems to more automotive experiences, especially ADAS systems. As autonomous driving extends from level 2 to level 3 and level 4, higher requirements are also placed on the high capacity and read and write performance of NOR Flash. Currently, in the global NOR Flash market, Huabang Electric, Wanghong, Zhaoyi Innovation and Cypress account for 74% of the market share. Micron and Cypress are rapidly withdrawing from the NOR Flash market, and their revenue scale has shrunk significantly. In the automotive market field, Cypress, Micron, Huabang Electric, Wanghong, and Zhaoyi Innovation all focus on the automotive market and are in the leading position.
1.1.5 Simulation: New energy vehicles have added new digital isolation and other simulated IC demand, and local manufacturers have huge growth space
Simulation IC is widely used in fuel vehicles, and new energy vehicle brings new demand. For example, in engine fuel injection applications, efficient control of solenoid valves, 12V battery management, start generators, transmission , suspension, EPS position detection and current detection, etc., LED driver is used to drive external headlights and internal ambient lights, and audio and video driver IC is used for in-vehicle multimedia systems. In addition, for safety reasons, all subsystems of the automobile have requirements for voltage stabilization, electrostatic protection, signal isolation, etc.New energy vehicles include hybrid vehicles (PHEV) and pure electric vehicles (BEV), and the powertrain part mainly includes motor controllers, OBC, DC/DC, BMS, etc. At the same time, the demand for intelligent driving in sensors will also promote the development of the analog chip market. According to the calculations of STMicroelectronics , the bicycle value of DC-DC conversion and battery management system BMS on electric vehicles is US$130 and US$80 respectively.
New energy vehicles have added a variety of demand for digital isolation chip products. In view of the needs of safety regulations and equipment protection, digital isolation chips are used in high-wattage power electronic devices of new energy vehicles and have become a key component of new electronic transmission systems and battery systems. Taking motor drive as an example, CAN communication between the electronic control unit (ECU) and the motor controller requires an isolation chip, a gate driver needs to be isolated between the power tube and the controller , and the current sampling of the motor drive requires an isolation of ADC/isolated op amp.
The electrification and intelligence of automobiles have led to the increase in demand for bicycle chips, and the value and demand of automotive-grade analog chips have increased. According to Infineon and IC Insights data, the value of hybrid and pure electric bicycle semiconductors in 2021 will be US$910 and US$964, respectively, an increase of 84% and 95% compared with the 495 US$495 for traditional fuel vehicles, of which about 25% of the incremental value is OBC/DC-DC/BMS and other analog chips. According to IDC data, the global semiconductor market size in the automotive field will reach US$66.963 billion in 2026, with a compound growth rate (CAGR) of 4.7% from 2022 to 2026, and the automotive analog chip market size is approximately US$17 billion, accounting for about 25% of automotive chips. At present, the domestic production rate of automotive-grade simulated ICs is relatively low, and there is huge room for growth in the future. The current market is in high prosperity, and the domestic simulation IC has entered the time window for automakers to open. (Report source: Future Think Tank)
1.2 Consumer Electronics: Mobile Market Demand is under pressure, and it is expected to improve marginally in the second half of the year
1.2.1 Smartphone: The epidemic and inflation suppress demand, and the mobile phone market is expected to resume positive growth in the second half of the year
Under the influence of the epidemic and inflation, the global mobile phone market demand is weak. We expect global shipments to decline by 1.8% throughout the year and domestic shipments to decline by 5.9% throughout the year. In Q1 2022, serious concerns about global inflation and economic growth have suppressed consumer spending, and coupled with rising parts and transportation costs and domestic epidemic prevention and control policies, the smartphone market has been seriously affected. IDC data shows that global smartphone shipments in Q1 2022 decreased by 8.9% year-on-year, down 2018 for the third consecutive quarter.
From a regional perspective, the largest decline was Ukraine, Russia and other eastern Europe, with the Central and Eastern Europe falling by nearly 20% year-on-year, and the outlook is still uncertain. From a quantitative perspective, Central and Eastern Europe accounts for only 6-7% of global shipments, with a small impact on the world. The largest decline in global shipments were China and Asia-Pacific , which accounted for nearly half of global shipments, and fell by 12.3% in the first quarter of 21. Due to uncertainties in geopolitics, macroeconomics and the epidemic, we expect global mobile phone market to ship 1.33 billion units, a year-on-year decline of 1.8%, and domestic mobile phone market shipped 310 million units, a year-on-year decline of 5.9%.
1. Brand manufacturer: Apple has strong growth certainty, and domestic Android brand manufacturers are under pressure at the stage and are expected to resume positive growth in the second half of the year. Apple and Samsung's growth rate is better than that of the market, and Apple's annual growth is highly certain. In the first quarter of 2022, the growth rate of shipments of Apple and Samsung (2.2%/- 1.2%) was significantly better than the growth rate of global shipments (-8.9%). The main reasons are: 1) The decline in shipments in the domestic market is higher than that in the global market, while Apple/Samsung's domestic proportion is relatively low; 2) The epidemic in overseas markets is normalized, and the pace of release of consumer demand is relatively stable; 3) Apple/Samsung has stronger supply chain control capabilities. However, due to the spread of global inflation, the main economy, , has entered a downward cycle, and there will be certain uncertainty about the global market consumption power in the second half of the year.Since the high-end mobile phone market is relatively less affected by the global macroeconomic, we believe that Apple's growth will remain strong throughout the year. We predict that Apple will achieve 240 million mobile phone shipments throughout the year, with increasing by 3% year-on-year.
2. OEM assembly: The epidemic blockade has affected the logistics of major manufacturers and the production capacity of , but it has been gradually recovered and the impact is controllable throughout the year. Due to the different distribution of the factory areas, the degree of impact of downstream OEM factories is different, and production capacity begins to recover marginally after mid-May. In terms of Foxconn , the global factory area is scattered, and the domestic factory area is mainly concentrated in Zhengzhou, Shenzhen, Huizhou , Zhongshan and other places. Most domestic factories adopt closed-loop production, and the overall impact of the epidemic is limited. In terms of Pegatron, the domestic factory area is mainly in Kunshan and Shanghai. Kunshan factory resumed work in mid-May, and Shanghai has not resumed work yet, so the second quarter revenue has a great impact. Luxshare Precision , domestic factories are mainly distributed in Kunshan, Ji'an, Dongguan, Suzhou and other places, with nearly 60% of the production capacity being realized in East China, so there are some uncertainties in the second quarter. Overall, since the second quarter is the off-season, the capacity utilization rate is low and the capacity allocation is more flexible, the lost capacity in April is expected to be replenished in May and June, and the impact on the OEM factory throughout the year is controllable.
3. Optical components: The current pressure of reducing the regulation and configuration is still continuing, but the year-on-year data is likely to improve marginally. In terms of mobile phone optical lenses, the trend of reducing the specifications and reducing the distribution continues, Dali Lighting is under the most severe pressure, and Sunny Optics has begun to improve marginally. The monthly revenue of the global optical lens leader Daliguang has declined year-on-year for 15 consecutive months, reflecting to a certain extent the short-term pressure faced by optical manufacturers after the epidemic: mobile phone manufacturers slowed down under the pressure of weak demand, and the momentum of lower and lower specifications and lower distribution has not yet been alleviated, further bringing fierce price competition, and the profits of upstream optical manufacturers have been further compressed. Therefore, Daliguang, which has the highest product specifications and the most technological innovation, has been hit the most seriously. Sunny Optics, which is in the chase position, has been in a relatively good offensive and defensive position in terms of pattern due to its high-end products being introduced to major overseas customers and also has a certain technical gap with second-tier manufacturers such as AAC Technology. According to the April data, Sunny Optics' mobile phone lens shipments have begun to turn positive year-on-year after a 10-month decline in year-on-year. We expect Sunny Optics’ data in May and June will have a relatively obvious marginal improvement. In terms of mobile phone optical camera modules, the monthly decline is relatively high, but it is expected to improve quarter by quarter in the next few months. The shipment volume of Sunny Optical Mobile Camera Module Group has seen a double-digit year-on-year decline in monthly data since 2022, which is relatively consistent with the decline in shipments of Android brand manufacturers. Weak demand and high base are important reasons, but the month-on-month data in April have turned positive. We believe that the trend of quarter-on-quarter improvement in the next few months is likely to be in a quarter-on-month trend, and it will turn positive in the second half of the year. QiuTai Technology, which is in the chase position, performs relatively smoothly in data, and is the same logic as Sunny's performance in mobile phone lenses that is better than Daliguang. QiuTai Technology is in a relatively good position in the pattern because its high-end products are introduced to domestic large customers and at the same time has opened up a certain technical gap with other low-end module manufacturers such as Helitai and Tongxingda. We expect the revenue data of mobile phone camera module factories to recover smoothly in the second half of the year.
mobile image sensors are expected to grow at low first and then high throughout the year, and the risks brought by high inventory are generally within a controllable range. Since 2021Q3, domestic image sensor manufacturer Weier Co., Ltd. has seen quarterly revenue decline year-on-year for three consecutive quarters, and both companies declined year-on-year in the first quarter. As domestic downstream demand in the second quarter is still weak and the base is high, we expect it will still be difficult to turn positive in the second quarter, and there is a great chance of turning positive in the second half of the year. It is expected that the annual growth rate will be low at the beginning and high at the end.
At the same time, both companies' inventory has been at historical highs, mainly due to the continuous price increase of upstream wafer foundries such as TSMC and are relatively tight. In order to control costs and ensure supply, the company places an order in advance to prepare inventory. At the same time, the speed of downstream mobile phone manufacturers is lower than expected. If downstream demand changes significantly, high inventory may have an adverse impact on the company's operating performance and operating cash flow, or a sharp decline in product prices will lead to a risk of price depreciation. We believe that the inventory risks of the two companies are generally controllable. The book balance of inventory goods disclosed in the 2021 annual report was 5.18 billion yuan, which is roughly equivalent to the monthly revenue scale. The total book balance of inventory goods disclosed in the 2021 annual report of Gekewei and the total book balance of inventory goods and issued goods was 1.24 billion yuan, which is less than the monthly revenue scale, and is at a normal level. The raw materials and products are wafers placed in advance by the company. There have been fewer orders at present and are expected to be fully digested in the future.
4. RF: Global RF is still in the process of destocking, but the demand for domestic substitution is still very strong. As for leading overseas manufacturers, the growth rate has dropped from high growth rate to low growth rate. Skyworks still maintained a relatively stable year-on-year growth in the first quarter, mainly because Apple is a major customer with more than 50% of the company's revenue, and the company's share in Samsung and Google is also relatively high, and it is not sensitive to the decline in domestic market demand. Qorvo's quarterly growth trend is similar to Skyworks, also because Apple accounts for more than 30% of the company's revenue. However, as the large client models have completed the switching from 4G to 5G, the year-on-year revenue growth rate of the two companies has also dropped from high double digits to low single digits. We believe that as the 5G market technology gradually matures, overseas RF leading manufacturers may face greater pressure, and the slowdown in technology upgrades will bring more fierce competition, while domestic RF manufacturers will gain an increasingly large share in the Android market, compressing the survival space of leading manufacturers.
In the medium term, domestic RF will continue to benefit from the demand for 5G penetration and domestic substitution in overseas markets. In 2022, although the domestic 5G penetration rate has exceeded 70%, the development of 5G in overseas markets is far from complete. MediaTek predicts that global 5G mobile phone sales will reach 650-680 million units in 2022, and the 5G penetration rate will increase from 30% last year to more than 50% globally this year. At the same time, domestic manufacturers continue to rely on their cost-effective advantages to replace overseas leaders in share.
In the long run, we believe that the opportunity for domestic RF manufacturers lies in the domestic replacement of high-end products. As discrete devices are gradually replaced by domestic products, domestic production has also begun to enter the "deep water zone", and PAMiD may become a technological peak that domestic RF companies need to break through. 5G is the biggest opportunity for RF front-end, and it also puts higher requirements on RF front-end performance. After two years of solution iteration, 5G is currently mainly divided into two solutions: Phase7 series solutions and Phase5N. The two solutions are the same in the new UHB frequency band of Sub-6GHz, both of which are L-PAMiF integrated module solutions; in the Sub3GHz frequency band, they are PAMiD module solutions and Phase5N discrete solutions respectively. PAMiD modules are known as the "jewel in the crown" of RF. They must master active (PA and LNA) and passive (SAW, BAW or FBAR) and have strong system design capabilities to design PAMiD modules. Currently, the only manufacturers that master these technologies and resources are Skyworks, Qorvo, Broadcom and Qualcomm, which is also the main direction of domestic manufacturers' technical research. We believe that domestic manufacturers will break through high-end products represented by PAMiD in the future and open up space for growth.
5. Simulation IC: The domestic production rate is still at a low level, and the trend of terminal intelligence drives the opening of the digital-analog hybrid chip market space. The growth rate of overseas leading manufacturers is differentiating, the domestic production rate is still at a relatively low level, and there is a lot of room for growth in the future. TI's revenue in the first quarter was US$4.905 billion, a year-on-year increase of 14.36%. Considering the impact of the epidemic, TI's revenue in 2022Q2 is expected to be between US$4.2 billion and US$4.8 billion, a median US$4.5 billion, a year-on-year decrease of 1.75%. ADI's revenue for the second quarter of fiscal 2022 was US$2.97 billion, a year-on-year increase of 78.76%, while ADI's median revenue for the third quarter was US$3.05 billion, a year-on-year increase of 73.41%.Domestic analog IC manufacturers are constantly expanding their product categories and improving their product competitiveness. With the gradual ease of production capacity in the future, domestic substitution will continue. Due to the many application scenarios of analog ICs in mobile phones and the large industry space, domestic analog IC manufacturers are expected to gain an increasingly large share and gradually expand to the Apple mobile phone market based on the Android mobile phone market. The total revenue of the top ten domestic simulated IC companies in 2021 was approximately US$2.286 billion. According to IC Insights data, the global simulated IC sales in 2021 were US$74.1 billion, of which the Chinese simulated IC market size is expected to exceed US$30 billion, and the proportion of Chinese manufacturer CR10 accounts for about 7.6% of the domestic market, which is at a low level, and there is still huge room for replacement in the future.
terminal intelligence trend drives the digital-analog hybrid chip market space to open. The internal circuit of the digital-analog hybrid chip includes basic analog circuit modules, such as basic units of analog chips such as voltage sources, current sources, operational amplifiers, and comparators; there are also digital logic functional modules, such as basic units of digital chips such as inverters, registers, flip-flops, MCUs, and memory. For example, audio amplifiers, that is, signal processing of sound power amplification, evolves from analog amplifiers to digital power amplifiers to form digital hybrid products. Motor drives also belong to the signal chain classification, and drive electronic components (speakers or motors) through signal processing. They have similar technical attributes to audio amplifiers and are also digital-analog hybrid products. According to Cirrus Logic data, the market space for terminal product audio and high-performance digital-to-analog hybrid chips (including haptic drivers, camera controllers, etc.) in 2020 is US$2.7 billion, and is expected to reach US$6.5 billion by 2025, with a five-year CAGR of 19.21%. In 2020, the market space of digital-analog hybrid chips is US$435 million, including smartphones 340 million, and other devices (tablet/wearable/AR/VR, etc.) is US$95 million. It is estimated that the market space of digital-analog hybrid chips in 2025 will be US$3.5 billion, including smartphones 2.5 billion, and other devices will be US$1 billion. The five-year CAGR of high-performance digital-analog hybrid chips is 51.75%, and the industry has entered a stage of rapid growth.
1.2.2 Wearable and smart home: The demand for watches, TWS, ARVR is increasing, and the rise of whole-house intelligence brings opportunities for smart terminals
1. Smart watches: The market size will continue to grow, and health monitoring has become a new growth point. According to Counterpoint data, global smart watch shipments in 2021 were 127 million pieces, a year-on-year increase of 24%. We expect the smart watch market to maintain stable growth in the future and is expected to exceed 200 million shipments in 2025. On the one hand, sensors, chips and other technologies are constantly iteratively optimized, the basic functions and battery life of watches have been improved, and the accuracy of health monitoring has also been greatly improved; on the other hand, the epidemic has become the new normal, the public's health awareness has been enhanced, and the market demand for sports and health smart watches has continued to rise.
2, TWS headphones: It is expected that the TWS headphone market will continue to grow steadily in 2022, and the trend of brand replacement of white brands is relatively clear. Since 2017, the TWS headphone market has been developing for five years, showing a scene of blooming flowers, and the upstream and downstream of the industrial chain have gradually matured and improved. Global TWS headphone shipments are increasing year by year, and in 2022 we expect TWS headphone brand sales to grow steadily. On the one hand, the wave of replacing TWS headphones for the first batch of users has arrived. On the other hand, TWS headphones are supported by new technologies and new functions to meet the needs of new usage scenarios, such as heart rate monitoring. The trend of TWS headphone brands replacing the huge white brand market continues, and the increase in the market share of mid-range waist will bring more obvious growth to the Android TWS brand.
3, AR, VR: In 2021, VR shipments exceeded 10 million, and the industry ushered in rapid development. According to IDC, the global AR/VR headset shipments in 2021 reached 11.23 million units, an increase of 92.1% year-on-year, of which the shipments of VR headsets reached 10.95 million units, breaking through the industry's important turning point of the annual shipment of 10 million units, and is another year after 2016. Among them, Oculus' share reached 80%. It is estimated that in 2022, 15.73 million VR headsets will be shipped worldwide, an increase of 43.6% year-on-year.
4. Smart home: The whole house intelligence is emerging, and terminals such as smart lighting, home security, and video entertainment are growing rapidly.As the penetration rate of smartphones gradually saturates, it has gradually shifted from mobile smart terminals to the whole-house smart field. Smart homes are mainly divided into video entertainment terminals represented by smart TVs and smart set-top boxes, and home security monitoring terminals represented by smart cameras and smart doorbells, which can realize intelligent control of lighting equipment and smart sockets. According to IDC statistics, the shipments of smart home terminals in 2021 reached 896 million, and it is expected that the shipments of smart home terminals will increase to 1.44 billion in 2026, with a compound growth rate of 10%. Among them, the fastest-growing sub-sector is smart lighting, which is expected to reach 247 million in 2026, with a compound growth rate of 24%.
The number of home networked devices has surged, and WiFi-6 has created a new experience for the smart home era: the penetration rate of smart home appliances is gradually increasing, and the number of devices that need to connect to Wi-Fi networks has also increased sharply, from the original 3C digital products to the newly added sweeping robots, smart doorbells, smart door locks, smart light bulbs, smart speakers, smart sockets, smart cameras, smart curtains, etc. As the number of smart devices connected to the network increases, the amount of data transmission becomes larger and larger. When multiple family members try to play bandwidth-intensive videos on their devices at the same time, they will be limited by the total bandwidth, resulting in each member connected to WiFi more or less encountering certain network connectivity problems. The latest generation of WiFi6 technology created for the smart home era will bring an innovation to indoor wireless networks. The theoretical bandwidth of WiFi-6 (11ax) reaches 9.6Gbps, which is nearly 3 times higher than that of WiFi-5. The AP access capacity is 4 times that of WiFi-5 (11ac). The power consumption of terminals connected to WiFi-6 is more than 30%, meeting the requirements of IoT terminals for low power consumption.
my country's set-top box product replacement cycle is generally 2-3 years. After two years of decline in bidding and procurement volume, China Mobile's bidding volume began to resume growth in 2021. Since the domestic set-top box market is mainly based on operator bidding, the domestic set-top box market will usher in a high volume growth in 2021 after the bidding volume is restored. It is expected that the planned procurement volume of the three major operators will still reach about 70 million units in 2022.
The epidemic continues to spread worldwide in the second half of 2020, and the time to stay at home has been extended. Internet streaming media manufacturers represented by Roku, Amazon and Google have risen rapidly. Through smart set-top boxes as new entrances for streaming, overseas OTT set-top boxes sales have grown rapidly, among which the number of active users of Roku increased from 39.8 million at the beginning of 2020 to 61.3 million. Overseas operators are also actively seeking business transformation. With the transformation of TV viewing from traditional paid TV to streaming media, more American users have begun to abandon traditional linear and paid TV and switch to streaming services. Traditional TV operators such as Disney, AT&T, Comcast are also rescuing themselves through the newly established OTT streaming services, accelerating their own streaming media transformation, and driving the penetration rate of set-top boxes to increase in overseas markets.
smartphone sales slowed down, and the AIOT field has become the focus of SoC main control manufacturers: SoC is mainly used in consumer electronics, commercial electronics and automotive electronics. At present, SoC chips have been well-appointed in mobile phones, tablets, smart set-top boxes, smart TVs, smart speakers, security video surveillance and other fields, and its application monitoring is still expanding to a wider field. With the slowdown in mobile phone sales, the SoC main control market in the AIOT field has become the focus of major chip manufacturers. Leading manufacturers around the world include Apple, Qualcomm, MediaTek. Based on the arm architecture and Android system, a large number of excellent SoC companies have emerged in China, including SoCs, such as Unigroup Zhanrui and Aojie, which are mainly engaged in cellular communications, and a group of excellent SoC design companies such as Rockchip, Quanzhi, Jingchen, Hengxuan, Haisi, and Fuhanwei, etc., mainly based on SoC+WiFi communications. Relying on the huge downstream market in China, the SoC field has made great progress. Jingchen shares have market share of 14% and 30% in the smart TV and set-top box SoC fields respectively. Hengxuan Technology occupies more than 50% of the Android brand TWS SoC field, while Rockchip is focusing on SoCs such as large display screens, smart speakers and sweeping robots.
leverages TSMC and Samsung's advanced process technology to move towards the high-end SoC field: From the perspective of the entire industrial chain, the SoC industry chain is still dominated by the vertical foundry model. Domestic SoC design companies rely on wafer foundries such as TSMC and Samsung that can realize advanced process technology to move towards high-end SoC to fill in the high-end SoC market left by HiSilicon. Unigroup Zhanrui flagship chip T770 adopts TSMC's 6nm EUV process and is positioned in the 5G mobile phone field. In the non-mobile field, Rockchip launched the RK3588 built with Samsung's 8nm process at the end of 2021, aiming at target markets such as security NVR, high-end laptops, lightweight AI servers and smart cockpits. Wearable device master SoC manufacturer Hengxuan Technology is the first to launch the 12nmTWS headphone SoC that leads the Android camp, further improving the product's noise reduction capabilities.
The rapid development of the Internet of Things will continue to affect the development of industries such as industry, medical care, transportation, and home furnishings. Internet of Things technology allows all key nodes that can exercise independent functions to be interconnected. Wi-Fi is the most widely used local area network connection communication protocol in the world and is one of the main ways of connecting the Internet of Things. Therefore, the rapid development of the Internet of Things is also driving the rapid growth of Wi-Fi chip shipments. According to ABI Researh data, the global shipment of Wi-Fi chips in 2019 was about 3.2 billion. With the rise of Mesh network, smart home, Internet of Vehicles and other applications, Wi-Fi chips maintain a rapid growth trend. At the same time, according to Techno Systems Research data, the global shipment of IoT Wi-Fi chips in 2019 was about 500 million, maintaining high-speed growth of more than 40%. According to Markets and Markets, the WiFi chip market size has reached US$19.7 billion in 2020, and the global WiFi chip market is expected to grow to US$25.2 billion in 2026, with a compound growth rate of 4.2% from 2021 to 2026.
WiFi chips can be divided into two categories: WiFi-MCU and Wifi single chip. Among them, fields with low computing power requirements such as smart light bulbs, sockets, and payment PoS machines in the field of smart home generally use cost-effective Wifi-MCU integrated products, while scenarios with higher computing power requirements such as smart speakers, smart set-top boxes, smart cameras and sweepers generally use SoC+Wifi set-piece format. The growth of domestic SoC shipments has promoted the increase in sales of supporting Wifi chips. In the field of Wifi-MCU, Lexin Technology has seized about 35% of the global market share with its hardware design advantages and software ecosystem. In the Wifi film set market, Quanzhi and Ruxin Micro have already made plans. Jingchen has launched WiFi chips that match their own brand SoCs. Hengxuan Technology, which focuses on the Bluetooth low-power market, has also launched WiFi and Bluetooth dual-mode products used in the smart home field.
1.2.3 PC/Tablet/TV: Overall demand has declined, and there are still opportunities for subdivisions such as Mini LED, folding screen, etc.
1, PC and tablet: Commercial PCs have grown steadily, and the education tablet market is on the rise. (1) PC: According to IDC data, global PC shipments in 2021 were 347 million units, a year-on-year increase of 16.3%, but global PC shipments began to weaken in the quarterly quarter, indicating that the growth of market demand has slowed down. 22Q1 global PC shipments were 80.5 million, down 4.1% year-on-year, mainly due to the impact of cross-regional supply chain disruptions caused by the intensification of the epidemic and the impact of geopolitical conflicts. Despite a certain decline, global shipments exceeded 80 million for the seventh consecutive quarter, and shipments remained at a relatively high level. In terms of segments, with the high global inflation and repeated epidemics, consumption has been suppressed, and the demand for 2C-side PCs is poor, but commercial PC demand is still strong. Lenovo Group's third-quarter financial report for fiscal year 2021/22 showed that the company's commercial PC revenue increased by 25-50% year-on-year, far higher than the overall growth rate of the PC industry. Dell's third-quarter financial report also showed that its commercial PCs increased by 40% year-on-year. Looking ahead to the next few quarters, the United States enters a interest rate hike cycle. Although inflation has been curbed, the economy is facing the risk of recession, and the demand for the 2C PC market is not expected to grow significantly; while the digital economy is in full swing in various industries, it will still serve as the core driving force to drive commercial PC demand to remain strong.
(2) Tablet: According to Wind data, the global tablet shipments in 2021 were 169 million units, a year-on-year increase of 3.5%, and the shipments in 22Q1 were 38.4 million units, both declined on the same month-on-month, mainly due to the slowdown in demand in mature markets and the shortage of raw materials. However, benefiting from the high demand for online offices at home during the epidemic, the shipments are still higher than the pre-epidemic level. Looking ahead to the next few quarters, consumption will still be suppressed by many aspects such as the epidemic and inflation. The demand for the entire tablet market will remain stable, and the high demand for online education may prompt the rise of the education tablet market.
2, TV: Overall demand has declined, and high-end TVs such as Micro/Mini LED and OLED are expected to maintain growth. According to AVC Revo data, global TV shipments in Q1 2022 were 46.4 million units, a year-on-year decline of 6.3% and a month-on-month decline of 23.8%. It is mainly due to the fact that after the lockdown of overseas countries, demand for home entertainment fell. In addition, the Russian-Ukraine war and supply and demand mismatch exacerbated global inflation and economic pressure, resulting in pressure on terminal consumption demand; on the other hand, the rebound of the epidemic in China in the first quarter, and the demand side was also suppressed. However, driven by consumption upgrades, the penetration rate of OLED TVs continues to increase. In 22Q1, the global OLED TV shipments were 1.5 million units, a year-on-year increase of 25%. Looking ahead to the next few quarters, amid the high global inflation and repeated epidemics in many places in China, there is still a great resistance to the recovery of global TV demand, but high-end TVs equipped with Mini LED and OLED in the market segment are expected to maintain growth trend. The
panel link is recommended to pay attention to two high growth directions, namely Mini LED and folding screen:
(1) Major manufacturers are accelerating the layout of Mini LED products, and the penetration rate is gradually increasing to help the industry explode. We have noticed that since 2020, brand manufacturers have released Mini LED products, and terminal manufacturers and panel manufacturers have strong willingness to promote them. In July 21, Huawei released the Mini LED backlit smart screen V75 Super using Huawei's self-developed Honghu Super Mini LED precision matrix backlit solution, and has adopted many creative Mini LED solutions. In 2021, Samsung launched 5 major series for Mini LED TVs, of which 8K has two series (QN900A and QN800A), and 4K products have three major series (QN95A, QN90A and QN85A). At the 2021 spring press conference, Apple's new 12.9-inch iPad Pro was equipped with a Mini LED backlit display screen for the first time, and will promote Mini LED's iPad and MacBook in 2022. In March 222, TCL launched three series of Mini LED backlit TVs. According to Omdia data, the penetration rate of Mini LED laptop panels has increased to 1.6% in 2021, and it expects that penetration rate to increase to 3% in 2022. Omdia also expects that by 2025, as costs continue to decline, shipments of Mini LED backlit TVs will reach 25 million units, accounting for 10% of the entire TV market. According to SNOW Intelligence data, more than 5 million Mini LED display applications will be available in 2021, and more than 40 million Mini LED display applications will be available in 2025, of which the largest number of display terminals are TVs, laptops and tablets. From an area perspective, TVs will be the main contributor to Mini LED backlight in the future, with a cumulative proportion of more than 70% by 2025.
(2) Folding screen mobile phones usher in a period of rapid growth, driving flexible OLEDs to accelerate their growth. Since 2021, many mainstream mobile phone manufacturers have successively released foldable screen mobile phones, and the positioning of foldable mobile phones as flagship models has gradually been recognized by the market. According to IDC data, global foldable screen mobile phone shipments reached 7.1 million units in 2021, a surge of 264.3% compared with 1.9 million units in 2020. IDC predicts that foldable phone shipments will reach 27.6 million units in 2025, with a compound annual growth rate (CAGR) from 2020 to 2025 to 2025 at 69.9%. With the gradual improvement of folding screen mobile phone products by mainstream manufacturers and the further maturity of consumers' perception of folding screen concepts, it is expected to accelerate the penetration of flexible OLEDs. According to HIS forecast, folding AMOLED panel shipments will increase from 17.5 million to 50.5 million from 2021 to 2025, with a CAGR of up to 30.34%. Flexible OLED will eventually become the mainstream of smartphone displays.
1.3 Industry and others: New energy demand continues to be strong, server iteration and upgrading is imminent
1.3.1 New energy: Photovoltaics and wind power usher in a new cycle, and the demand for IGBTs and modules grows
Take the string inverter with more than half of the installed capacity as an example. The power units of photovoltaic inverters can be divided into boosting units (DC/DC) and inverting units (DC/AC) in terms of structure. The boost unit is used to realize maximum power tracking (MPPT) of the battery plate. The boost unit can vary one or more channels depending on the connection method of the battery plate and the power level of the inverter. The inverter unit is used to convert the DC voltage into the grid-connected voltage of the power frequency, and finally connect it to the power grid through an isolation transformer. The half-bridge module of
1700V is the mainstream of wind power IGBT modules. One of the core components of wind power converters is the IGBT module. Under the requirements of reducing costs and improving efficiency, the increase in single-machine power of the fan has become an irreversible trend. The increase in single-machine power can effectively reduce the operating cost of the wind farm. High power means large current. In order to reduce system costs, domestic 1140V fan systems are becoming increasingly mainstream. Increase the fan voltage from the traditional 690V to 1140V, and reduce the fan current of the same power by 35%, greatly improving the efficiency of the electrical transmission system and transmission and transformation system, reducing the cost of kilowatt-hours, and making the product have stronger market competitiveness. For a 1140V converter, a 3300V voltage level IGBT module is required, but the switching and conduction losses of the 3300V device cannot meet the system's efficiency and switching frequency requirements, and it is also more expensive. Therefore, using a 1700V semi-bridge module to form a three-level topology is currently the mainstream solution in China.
demand for wind power converters is growing steadily, and the corresponding IGBT module market is expected to reach 2.8 billion yuan in 2025. The proportion of IGBT in wind power converters is about 20%. It is estimated that the market size of wind power IGBT in 2022 will be about 1.8 billion yuan. As the wind power rush installation ends in 2020, the market for wind power in 2021 will decline slightly. As offshore wind power enters the parity stage, installed demand will gradually increase. It is estimated that the domestic wind power converter market space will be 13.9 billion yuan by 2025, and the corresponding IGBT market demand will be about 2.8 billion yuan.
IGCT is the main power device of the converter in offshore wind scene: In addition to the technical route of IGBT, in offshore wind scenes, when the voltage level above 4500V is needed, IGCT has a stronger voltage resistance as a current-controlled device. Therefore, the largest wind converter manufacturer in China, Hewang Electric Medium-voltage Wind Power Converter uses IGCT as the main power device and adopts a three-level circuit topology. Compared with IGCT, the IGBT has a smaller operating current, which increases the output capacity, and can only use the parallel component or the parallel converter. Whether using components in series or parallel or using converter in parallel, it will increase the complexity of the system and lead to a reduction in efficiency and reliability. However, the IGBT has a high operating switching frequency and is suitable for low voltage applications, while the IGCT is suitable for high voltage or medium voltage. (Report source: Future Think Tank)
1.3.2 Server: DDR5 generation upgrade, promoting the increase in the volume and price of memory interface chips
North American cloud computing manufacturers' capital expenditures remain high. With the vigorous development of information technologies such as 5G, AI, and big data, a huge amount of traffic requires the support of more servers. Capital expenditure of Internet cloud computing manufacturers is a leading indicator of the prosperity of the server industry. The total capital expenditure of the five major cloud computing manufacturers in North America (Amazon, Meta, Microsoft, Google, Oracle) has increased significantly since 20Q3 and has continued to be at a high level, indicating that the prosperity of the server market continues to improve. Servers are about to be upgraded and shipments continue to increase. The server upgrades from 2020 to 2021 were lower than expected and shipments were sluggish because of: 1. The company's capital expenditure decreased and the orders changed from procurement to lease; 2. Intel's new generation CPUs were delayed; 3. There was a shortage of supporting chips such as PMIC. In 2022, with the easing of the epidemic and the easing of chip shortage and the shipment of the new generation of server CPUs from Intel and AMD, server shipments have shown an upward trend. According to IDC's forecast, global server shipments are expected to reach 14.03 million units in 2022, an increase of 8.01% year-on-year, and will continue to grow in the next three years.
Xinhua Technology's monthly revenue continued to rise. Xinhua Technology is the world's largest supplier of remote management chips that are essential for servers, and its monthly revenue is highly positively correlated with server shipments. Since August 2021, the monthly revenue growth rate has increased significantly. In February and March 2022, the revenue was 334 million yuan and 433 million yuan, a year-on-year increase of 32.53% and 61.46%, further verifying that the stocking cycle has arrived and the server market is highly prosperous. Intel DCG segment revenue continued to rise. In the server CPU market, Intel's X86 architecture market share has reached more than 90% year-on-year. Intel's DCG department's quarterly revenue in production server CPUs fully reflects the server market prosperity. Since Q3 2020, the quarterly revenue and year-on-year growth rate of the DCG department have dropped sharply, indicating that the server market has started a destocking cycle; the recovery and recovery since Q3 21, indicating that the server market demand has been strong. The upgrade of
DDR5 generation has promoted the increase in the volume and price of memory interface chips. 1. Quantity: (1) Due to the high prosperity of the server market, shipments are expected to continue to increase; (2) 5G and AI promote the demand for big data computing, and the trend of server memory capacity increases is obvious, and the number of memory modules for a single server is expected to increase; (3) In terms of the number of memory interface chips, the LRDIMM of the DDR5 generation, paired with a 1+10 architecture, namely 1 RCD and 10 DB, has added a DB chip usage compared to the DDR4 generation, and the penetration rate of LRDIMMs in the DDR4 era is only about 5%. With the increase in storage capacity and transmission rate, the penetration rate of LRDIMMs will further increase in the mid-to-late stage of DDR5. 2. Price: (1) In the short term, with the update of technology, the ASP of each new generation of memory interface chips will be improved. The upgrade of the DDR5 generation means that the price and gross profit of the corresponding memory interface chip will be greatly improved. In Q4 2021, due to the increase in the first child of DDR5, Lanqi Technology, the main supplier of memory interface chips, had revenue of 601 million yuan, an increase of about 69% year-on-year, and the gross profit margin increased to 69.21%, ushering in a turning point in profit. (2) In the medium and long term, as the penetration rate of DDR5 gradually increases, the average unit price of the product will further increase. Referring to the previous penetration rate of DDR, the penetration rate of DD5 can reach 20-30% by the end of 2022, 50-70% by the end of 2023, and penetration can basically be completed by the end of 2024.
1.3.3 Security: Traditional security demand slows down, digital transformation AI long trend
Considering the domestic epidemic and economic pressure, security demand is expected to be low at the beginning and high at the end. The global epidemic has lasted for more than two years, and epidemic prevention and control work still has a huge impact on the regional economy. With the intensification of the trend of anti-globalization, conflicts and confrontations between some countries continue to intensify, and the challenges brought by the political and economic situation to commercial operations are becoming increasingly severe. The global chip shortage is still continuing, and rising raw material prices have exacerbated the upward trend in manufacturing costs. Domestic adjustments to the education industry and real estate industry have led to a reshuffle of the industry and brought about many changes. Starting from the second half of 2021, the domestic economic growth rate has slowed down, and the overall security growth rate has slowed down with the epidemic in 2022. Among them, Hikvision's revenue in 2022 Q1 achieved 16.5 billion yuan, a year-on-year increase of 18%; Dahua Co., Ltd.'s revenue in 2022 Q1 revenue reached 5.8 billion yuan, a year-on-year increase of 14%; in addition, taking into account the impact of the epidemic and comparing the impact of the epidemic in 2020, the overall security demand in 2022 will show a pattern of low at the beginning and high at the end. Compared with traditional security, there are differences in technical dimensions, application dimensions, cost dimensions, business models, etc. With the progress of society, traditional security has gradually revealed its disadvantages and is far from meeting modern needs. From a technical perspective, compared with traditional security products, AI security has changed from a simple separation of software and hardware to customized solutions developed based on customer needs, and has shifted from a simple performance improvement to the further realization of data value; from an application perspective, AI technology is combined with different industrial models, and security application scenarios are becoming more and more extensive; from a cost perspective, the high cost of AI security also reflects the value of AI security, which indirectly confirms the improvement of AI security's perception and data processing capabilities on the front-end data, and the space of the back-end data cloud storage end is expanded.From the perspective of business model, the value of AI security software has increased significantly, the revenue model is determined by software and hardware packaging, and customer expansion has changed from passive to active.
AI The overall growth rate of the security market has slowed down, and smart communities may become the focus. Empowered by AI technology, security has become one of the few industries that can implement AI in the past one or two years. According to iResearch Consulting, the AI+ security software and hardware market will scale 45.3 billion yuan in 2020, and it is expected to scale more than 90 billion yuan by 2025. iResearch predicts that the market will enter a period of industrial structure adjustment from 2021 to 2025, and the market growth rate will slow down. It is expected that from the perspective of sub-sectors in 2025, the public security and transportation field will still be the market support force, but with the end of the 13th Five-Year Plan, this field has basically completed the coverage of intelligent video surveillance systems in key areas, and the market growth is relatively weak. Other sub-sectors will continue to erode the market share of the public security transportation field due to the stimulus of security demand, accelerated technology iteration, and huge product price kills. Especially smart communities around the comprehensive governance of smart cities may become the focus of the second half.
(This article is for reference only and does not represent any of our investment advice. If you need to use relevant information, please refer to the original text of the report.)
selected report source: [Future Think Tank]. Future Think Tank - Official Website
