Who has the right to speak about smart cars

Under the transformation of software-defined cars, the positioning of market players is also facing conflicts, reshuffles and run-ins.

Text/Daily Earnings Report Liu Yuchen

Intelligent electric vehicles are being marketed at a speed that exceeds expectations, and mainstream independent brands have launched high-end brands and new models, greatly improving the intelligent configuration. The "Daily Financial Report" noted that new models such as Weilai, Xiaopeng, Great Wall and SAIC Are generally equipped with high-computing power computing platforms. Among them, the COMPUTING power of WEILAI ET7 bicycles is even as high as 1061TOPS, and Tesla's FSD HW 3.0 computing power is only 144 TOPS.

In contrast, in the industrial chain pattern, hardware is still the world of foreign investment.

Foreign investment is unique in the world

The autonomous driving domain is the primary function of the development of smart cars, and the autonomous driving domain controller is the core component of smart cars. The foreign Tier1 giants have basically laid out autonomous driving domain controllers, and representative products include Visteon DriveCore, Bosch DASy, Continental ADCU, ZF ProAI, Veoneer Zeus, Magna MAX4, Aptiv CSLP, etc.

The key to domain controller technology is the powerful computing power of the hardware and the standardized support of the software. The master control chip provides powerful hardware computing power. In the ECU era, the core is the MCU chip, and the degree of car intelligence has increased significantly in the DCU era, the complexity of operation and processing has increased exponentially, and the SoC chip has replaced the MCU chip to achieve powerful computing power.

The SoC chip integrates multiple modules such as CPU, AI chip (GPU, FPGA, ASIC), deep learning acceleration unit (NPU), etc., of which the Computing Power of soC chip mainly comes from AI chips.

The current mainstream solution providers of autonomous driving AI chips are NVIDIA and Mobileye, NVIDIA entered the automatic driving market earlier, and the technical path is radical, Xavier chips, Orin chips are the highest power mass production chips in the market in the same period. In contrast, independent suppliers Horizon and Black Sesame have shipped relatively few.

In terms of lidar, the first in the industry to mass-produce is Valeo's SCALA lidar, which cooperates closely with overseas automakers such as Audi. According to the 2020 ranking of global lidar vendors provided by Yole Développement, Valeo has a market share of about 28%, ranking first, while Huawei ranks 12th in the world, but the market share is only 3%.

In terms of in-vehicle cameras, the market share of leading overseas suppliers such as Panasonic, Valeo and Fujitsu is more than 40%. In terms of millimeter-wave radar, Bosch, Continental, and Hella have a combined global market share of 64%.

Due to the intelligent trend, the number of sensory layer sensors such as cameras, lidar, and millimeter wave radar has increased significantly, which puts forward higher requirements for data transmission and transmission rate, and the use of high-frequency high-speed connectors has increased.

An on-board camera generally needs to use two sets of FAKRA or Mini-FAKRA connectors for camera-to-controller, controller-to-other controllers (or host) connections, for analog signal transmission. The central control screen and high-definition screen adopt HSD connector, and lidar and millimeter-wave radar use Ethernet connector for digital signal transmission.

The global connector market shows a trend of head concentration, and Tyco Electronics, Amphenol, Yazaki, Nippon Avionics and other long-established and large-scale U.S. and Japanese multinational companies occupy a leading position in the industry. The top three giants, Tyco Electronics, Amphino and Moshi, accounted for more than 35% of the market, forming a relatively stable global leader position. Japan's Yazaki (Yazaki), JAE (Avionics), JST (Pressed Terminals), etc. are also leading manufacturers.

In 2020, Tyco Electronics' automotive revenue was 4.903 billion US dollars, Amphenol 1.462 billion US dollars, while the domestic automotive connector scale of Derun Electronic Automobile business revenue was 3.645 billion yuan, most enterprises did not exceed 1 billion yuan, and there was a large gap between the revenue volume and overseas enterprises.

Intelligent chassis field foreign capital also occupies a dominant position, the world's main line control system suppliers for Bosch, continental, ZF Trina, of which Bosch took the lead in self-developed layout line control, occupying a leading market position, the main products for the Two-Box technical route of iBooster + ESP and One-Box technology route of IPB, of which iBooster + ESP product launch time is the earliest, the most widely used, IPB products in the country to take the lead in supporting BYD Han.

Seize the opportunity of the shuffle

In the era of fuel vehicles, the original parts and components of the Japanese and American OEMs are relatively fixed, most of the core parts are produced by the automakers independently, and the outsourced production parts procurement system is also relatively closed. The main suppliers of German OEMs are Bosch, Continental, ZF, the main suppliers of American OEMs are Lear, Johnson, delphi, the main suppliers of Japanese OEMs are Denso, Hitachi, Aisin, the supporting system of the three series OEMs is fixed, and most of the required parts are supplied by the parts production giants in the countries where the OEMs are located.

In the view of the "Daily Earnings", under the transformation of software-defined cars, the positioning of market players is also facing conflicts, shuffles and run-ins.

It is no longer uncommon for OEMs to bypass traditional Tier 1 parts suppliers and work directly with existing Tier 2 suppliers (e.g., chips, sensors, software algorithms). For example, NVIDIA has announced direct cooperation with a number of large overseas car manufacturers, bypassing the traditional TIER 1 manufacturers. As a software supplier, Zhongke Chuangda has also changed from a traditional TIER2 supplier to a TIER1 software supplier that also has direct services to OEMs.

In terms of automotive chips, Horizon has launched a series of chips for the journey, which are currently supporting independent models such as Changan UNIT, Chery Ant, and GAC Aean; Huawei and Black Sesame have rich product reserves and are expected to be mass-produced in the past 1-2 years.

In terms of lidar, DJI Lanwo, Sagitar Juchuang and Hesai Technology have all released in-vehicle products, and Hesai Technology has independently designed chips to bring competitive advantages in performance, integration and cost. Focusing on autonomous driving, robotics and smart cities, Lanwo Technology provides high-performance, low-cost lidar, and has won the trust of many customers with its rotary mirror-like solid-state technology, and has reached cooperation with Xiaopeng Automobile.

In terms of millimeter wave radar, Huayu Automobile, Desay SV and Baolong Technology have all launched mature products, and Huayu Automobile has achieved mass production support.

In terms of camera lenses, Sunny Optics and Lianchuang Electronics have been recognized by NVIDIA, Mobileye and Tesla, and have begun to carry mass production models.

From January to September 2021, the market share of independent brands in the Chinese market was 43.3%, an increase of 6.8pcts year-on-year, the market share of German brands was 21.4%, and the market share of Japanese brands was 21.2%. Smart electric vehicles are a major historic opportunity for China's auto industry to change lanes and overtake, and in this context, the local supply chain needs to achieve a transition as a whole.

In November 2020, at the World Intelligent Connected Vehicle Conference, China released the "Intelligent Connected Vehicle Technology Roadmap 2.0" plan, which put forward specific plans for the development of intelligent and connected vehicles in China. The "Intelligent Connected Vehicle Technology Roadmap 2.0" divides the development of intelligent networking into three stages: 2020-2025 as the development period, 2026-2030 as the promotion period, and 2031-2035 as the maturity period, which proposes that by 2025, the sales volume of L2 and L3 new cars will reach 50%, and by 2030, it will exceed 70%.

As the commercialization process of new car-making forces such as Tesla and Xiaopeng Motors continues to advance, it is expected that L3 technology will be in a rapid introduction period in the next few years, and the domestic market is expected to increase from 4% in 2019 to 60% in 2025.

Therefore, the industry is bound to usher in a round of outbreak in the next few years, and Chinese enterprises in the industrial chain are worth paying attention to.