(report producer/author: Guotai Junan Securities, Zhou Tianle, Zhang Yue)
crystal generates specific frequency signals through piezoelectric effect: quartz crystal oscillator is a frequency control component made of the piezoelectric effect of quartz crystal (SiO₂). It can generate stable pulses and provide reference frequency signals for microchip .
crystal oscillator is known as the salt of industry: quartz crystal oscillator is widely used in frequency control, frequency stability, frequency selection and timing systems. It mainly has two purposes: wireless data transmission and timing, and is an indispensable electronic component in circuits.
The sales of resonator in the global crystal oscillator market are the highest, and the shipment of MHz resonator is the highest
In terms of sales, the sales of resonator are the highest: CS&A data shows that in 2019, the sales of quartz crystal resonator (Xtal) accounted for the highest 58%, and other types of quartz crystal oscillators accounted for about 42%.
In terms of shipment volume, MHz resonator shipments have the highest shipment volume: CS&A data shows that in 2019, the shipment volume of medium and high frequency (MHz) resonator shipments accounted for more than half, 52.7%, low frequency (KHz) resonator shipments accounted for 37.3%, and other types of quartz crystal oscillators accounted for about 9.98%.
upstream: The crystal oscillator is mainly composed of base, chip , packaging material, IC,
resonator is similar to oscillator raw materials: quartz crystal resonator raw materials are mainly base, wafer, packaging material (SMD upper cover or DIP shell), etc. The raw materials of quartz crystal oscillator also need to add IC chip on the basis of the resonator.
resonator raw materials are mainly bases: Take Jingsai Technology SMD3225 as an example. The base accounts for 47.00% of the cost, which is the largest composition of the cost. The wafer accounts for 16.82% of the cost and the packaging materials account for 3.47% of the cost, both of which are relatively small.
oscillator raw materials are mainly IC and base: Take Jingsai Technology SPXO-3225 as an example, and the total IC and base account for 78.67% of the cost.
midstream: The lithography process is the key to producing high-basic crystal oscillators
mechanical grinding process has great limitations: the AT cut thickness of 28μm (approximately 60MHz) is close to the limit of mechanical grinding processing technology, and it is difficult to mass produce quartz wafers required for high-basic crystal oscillators (5G communication technology usually requires AT cut thickness of 20~16μm or even thinner, and the frequency requirement is 80MHz~96MHz).
lithography process is the key to producing high fundamental frequency crystal oscillators: lithography etching process can process the thickness of the oscillating part of the wafer to the micron level, and while maintaining the chip strength, it can achieve ultra-high frequency fundamental oscillation. It is a key technology for mass production of high fundamental frequency and small quartz crystal oscillators.
Domestic high-basic frequency crystal oscillator has passed Qualcomm certification, and the demand for domestic substitution of high-basic frequency
5G construction promotes the trend of high-basic oscillator high frequency: from 2G to 5G crystal oscillator is getting higher and higher, and the demand frequency of 5G communication products will increase to 52MHz, 76.8MHz, and 96MHz. (Report source: Future Think Tank)
domestic crystal oscillator manufacturer has obtained Qualcomm certification: domestic crystal oscillator manufacturer has made rapid progress in technology, and its products have been certified by many solution providers such as Qualcomm. In February 2021, Huilun Crystal and Taijing Technology's 1612 small size 76.8MHz Thermal Sensitive Crystal Resonator (TSX) were certified by Qualcomm, becoming a new member of the few manufacturers in the world that have obtained Qualcomm certification.
high-basic crystal oscillator demand will continue to rise: Qualcomm 5G baseband chip products are abundant,
has increased significantly compared with ordinary crystal oscillator, and is expected to increase in both volume and price
has a maximum price of high-basic crystal oscillator of 2 times, and the gross profit has increased significantly: the unit price of ordinary crystal oscillator of is about 0.5-1 yuan per piece, and the unit price of high-frequency crystal oscillator is 2 times that of ordinary crystal oscillator, and the unit price has increased significantly. The difference between high-basis frequency crystal oscillator and ordinary crystal oscillator is mainly due to the use of more advanced lithography processes, and the product cost is not much different, which will be considerable to increase gross profit margin.
high-basic frequency crystal oscillator is expected to usher in both volume and price increase: under the general trend of domestic substitution, the sales of high-end crystal oscillator will increase significantly. In addition, high-end crystal oscillator increases the average unit price of products, domestic crystal oscillator manufacturers are expected to usher in a "double breakthrough" in sales and price.
automotive crystal oscillator has higher requirements for reliability, and the unit price is higher.
automotive crystal oscillator has higher requirements for reliability: car driving environment is relatively complex, and it needs to pass strict tests such as repeated cooling and heating cycles, vibration resistance, shock resistance, and pollution resistance. The frequency and size of crystal oscillator are relatively low, but the reliability requirements are higher.
The unit price of automotive crystal oscillator is higher: Compared with ordinary crystal oscillators, the main difference between automotive crystal oscillator is that the design and production process of the base are relatively complex, and the price is relatively high, which can bring higher added value to crystal oscillator manufacturers.
New energy vehicles have significantly increased the demand for crystal oscillators, and the automotive-specific crystal oscillators have opened the second growth curve
Each electric car has a demand for crystal oscillators of about 100-150, which is a significant increase compared with the demand for about 60-100 traditional oil-powered cars; at the same time, smart cabins require about 15-25 crystal oscillators, which are gradually becoming popular in traditional oil-powered cars. With the booming development of the new energy vehicle market, the demand for automotive crystal oscillators is expected to usher in a rapid expansion, which will bring new profit growth points to domestic crystal oscillators.
Downstream: 5G, new energy and other fields have obvious growth rates, and downstream demand continues to rise
According to the prediction data of TXCh, the downstream fields of crystal oscillator such as 5G communication equipment, network, automotive electronics, mobile phones, consumer electronics, and other crystal oscillator will all have CAGR greater than 20% in the future, maintaining rapid growth.
Global 5G mobile phone shipments have gradually increased: According to IDC data, global 5G mobile phone shipments have rapidly increased from 16 million units in 2019 to 260 million units in 2020. In 2020, 5G mobile phones accounted for 19.73%.
my country's 5G mobile phone penetration rate has increased rapidly: my country's 5G mobile phone shipments have increased rapidly from 14 million units in 2019 to 266 million units in 2021, and the proportion of 5G mobile phone shipments has continued to increase. In 2021, my country's 5G mobile phones accounted for 77.55% of the total smartphone shipments, and the proportion of 5G mobile phones increased rapidly.
high-basic crystal oscillator market is growing rapidly: high-basic crystal oscillator is an important component of 5G equipment. The rapid development of 5G applications will greatly expand the market space of high-basic crystal oscillator.
Global penetration rate of new energy vehicles has increased rapidly: The global new energy vehicle industry continues to maintain a rapid growth trend. In 2021, the global sales of new energy vehicles was 6.75 million, an increase of 108% year-on-year. The global penetration rate of new energy vehicles reached 8.3%, an increase of 4.1 pct from 2020.
downstream promotes the release of demand, and the crystal oscillator market space is vast
According to CS&A data, the global crystal oscillator market has continued to grow in the past two years, with the scale in 2020 reaching US$3.446 billion, a year-on-year increase of 13.32%. Benefiting from the vigorous development of emerging industries such as 5G and new energy vehicles, the demand for crystal oscillator products in the downstream market remains high, and the shipment of quartz crystal oscillator will continue to expand, and the potential of the global crystal oscillator market cannot be underestimated.
Domestic manufacturers mainly use mid- and low-end crystal oscillators, and the domestic substitution demand for high-end crystal oscillators is strong. Japanese manufacturers are at the forefront of the industry in terms of frequency, size, and accuracy. High-end products have an advantage. At the same time, affected by the rising costs of raw materials and labor, the mid- and low-end businesses with low gross profit margins are gradually transferred to China, Southeast Asia and other regions, and instead focus on high-end crystal oscillators with higher added value. my country's crystal oscillator industry started late, mainly based on mid- and low-end crystal oscillator products, while high-end crystal oscillator still mainly relies on imports.Faced with the rapid development of domestic 5G and new energy industries, downstream customers have grown rapidly in demand for high-end crystal oscillators, and the demand for domestic substitution of high-end crystal oscillators is strong.
The profitability of major Japanese crystal oscillators has declined, and their willingness to expand production is not strong
In recent years, the profitability of four major Japanese crystal oscillators (Epson, NDK, KCD, KDS) has dropped significantly. At the same time, due to cost pressure, the gross profit margins of NDK and KDS, which are mainly engaged in crystal oscillators, have a low gross profit margin. The gross profit margins of NDK continue to be below 20%, and the gross profit margins of KDS are between 20% and 25%. The gross profit margin of Japanese manufacturers' crystal oscillator business is lower than expected, and its attractiveness is declining. Japanese manufacturers have insufficient investment momentum in the crystal oscillator market and their willingness to expand production is weak.
Japanese crystal oscillator market share continues to decline, and industrial transfer continues to progress
Japan Crystal Industry Association data shows that the market share of Japanese manufacturers has dropped from 59.9% in 2010 to 48.8% in 2017. During the same period, the market share of Taiwanese and mainland manufacturers in China increased by 6.0pct and 6.1pct respectively; since 2017, the market share of four major Japanese manufacturers has dropped from 40.8% in 2018 to 35.4% in 2020.
Domestic manufacturers are expected to undertake Japan's high-end crystal oscillator business: Japanese manufacturers are considering transferring their high-end crystal oscillator business outward, and domestic manufacturers are expected to undertake Japan's high-end crystal oscillator business through OEM in the early stage, and later increase market share through independent brand production and sales.
domestic crystal oscillator manufacturers have maintained a high level of capital expenditure, and their production capacity continues to expand
for the first time to expand production, and the mid- and low-end substitution: expanded its production capacity through high-level capital expenditure for the first time around 2011, and initially realized the domestic substitution of mid- and low-end crystal oscillators.
is expanding production for the second time, high-end replacement: faces the growing demand for replacement of high-end crystal oscillators, domestic manufacturers have broken through the three major barriers of lithography technology, technology certification, and raw material procurement, and increased capital expenditure for the second time in 2020, realized a production capacity expansion plan dominated by high-end crystal oscillators, and undertake the industrial transfer of Japan's high-end crystal oscillators.
production capacity expansion is mainly high-end crystal oscillator, and it is fully committed to meeting the explosion of domestic substitution demand for high-end crystal oscillators
Domestic crystal oscillator manufacturers vigorously expand their high-end crystal oscillator production capacity: faces the strong demand for domestic high-end crystal oscillator products, and domestic crystal oscillator manufacturers such as Huilun Crystal, Taijing Technology, and Jingsai Technology have vigorously expanded their production capacity. Among them, Taijing Technology and Huilun Crystal Expansion Projects are mainly high-frequency and miniaturized high-end crystal oscillator products. (Report source: Future Think Tank)
The global crystal oscillator market is concentrated in Japan, Taiwan, the United States, and mainland China
Japan dominates the global crystal oscillator market: In 2020, the top 10 crystal oscillators in the world account for a total of 63.86% of the market share, and Japanese manufacturers are in a dominant position.
competitive landscape is expected to be reshaped: is under the general trend of domestic substitution of high-end crystal oscillators, domestic manufacturers are gradually rising, and the global crystal oscillator market structure will usher in changes.
Taiwan Enterprise in China: Crystal Technology (TXC) - the world's largest MHz crystal oscillator supplier
Taiwan Crystal Technology: was founded in 1983 and is headquartered in Taipei City, China. It is mainly engaged in the research, design, production and sales of frequency components such as quartz crystal-related resonators and oscillators, and has developed various sensing components according to market applications and needs.
The world's largest MHz supplier: has three major manufacturing bases, namely the Pingzhen factory in Taiwan, China established in 1991, the Ningbo factory in China established in 1999, and the Chongqing factory in China established in 2013. It has now become the world's largest MHz crystal oscillator supplier.
market share 11.06%: According to data statistics from CS&A, the revenue of crystal oscillator-related business in 2020 was US$381 million, accounting for 11.06% of the global market share.
benefited from the price increase of TCXO, Huilun Crystal's gross profit margin increased significantly in 2021
Huilun Crystal is mainly MHz products: Huilun Crystal was previously mainly produced in Taiwan crystal technology system in China, and has early layout in the MHz field. TCXO has the largest domestic production capacity and has obvious advantages in the MHz field. It has begun to gradually move out of the Taiwan crystal technology system in China in 2019, and will develop simultaneously towards high-end OEM and independent brands in the future.
benefited from the price increase of TCXO, and its gross profit margin increased significantly in 2021: The average unit price of Huilun crystal crystal products in 2020 is 0.45 yuan/piece, far higher than the average unit price of other crystal oscillator manufacturers of about 0.25 yuan/piece, and 1.8 times that of other crystal oscillator manufacturers; benefiting from the price increase of TCXO, in the first three quarters of 2021, Huilun crystal gross profit margin was as high as 48.09%, surpassing other crystal oscillator manufacturers.
Taijing Technology's operating income and net profit lead the domestic manufacturer
Taijing Technology's operating income leads: In the first three quarters of 2021, except for Jingsai Technology's unreleased data, Taijing Technology ranks first in the industry with a revenue level of 898 million yuan, and since its revenue surpassed Huilun Crystal in 2016, it has continued to lead the crystal oscillator industry.
Taijing Technology's net profit attributable to shareholders is leading: In the first three quarters of 2021, the net profit attributable to shareholders of Taijing Technology and Huilun Crystal was 171 million yuan and 138 million yuan respectively, both of which are at the forefront of the industry. Excerpts from the report:
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(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
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