In 2021, the continued shortage of global chips has a serious impact on many industries such as global automobiles, smartphones, and consumer electronics. At the same time, the deployment of 5G networks and the acceleration of the popularity of 5G smartphones have led to the rapid growth of the global RF market. Gartner predicts that the RF front-end market size will reach $21 billion by 2026, with a COMPOUND annual growth rate of 8.3% between 2019 and 2026. The booming market superimposed on the wave of domestic substitution has ushered in an excellent window period for the domestic RF front-end industry, and has spawned a number of excellent RF front-end enterprises. According to the "Top 100 Chinese Semiconductor Enterprises (2021)" released by JW Insights, Zhuoshengwei (20th), Weijie Chuangxin (22nd), Aiwei Electronics (30th), Guobo Electronics (31st), Onry (49th), Feijun Technology (64th), Huizhi Microelectronics (74th) and many other RF front-end enterprises entered the top 100 list, including Zhuoshengwei, Weijie Chuangxin, Aiwei Electronics, Companies such as Guobo Electronics have successfully IPO or passed the meeting, becoming the darling favored by the capital market.
The RF front-end track is thriving, and quality companies are constantly emerging
The rfed front end (RFFE) mainly includes two parts of the receive channel and the transmit channel, which is generally composed of an RF switch (Switch), an RF low noise amplifier (LNA, Low NoiseAmplifier), an RF power amplifier (PA, Power Amplifier), duplexers (Duplexers), RF filters (Filters), antenna tuners (AntennaTuners) and so on.
Different from digital/logic circuits, RF front-end devices usually have high technical, experience, capital and other barriers, and the overall domestic RF front-end started late, and there is still a certain gap with the international advanced level. However, with the growing domestic market demand and the increasing attention of the state to the integrated circuit industry, the development of the mainland RF front-end industry is not on fast track, and representative RF front-end enterprises continue to emerge.
In the field of RF power amplifiers, domestic participants include Weijie Chuangxin, Huizhiwei, Unigroup Zhanrui, Feijun Technology, Onrui Micro, etc. In the field of RF switches and LNA, Zhuoshengwei has formed the ability to compete with international first-class enterprises by virtue of its early entry into brand customers and its own strength advantages, and maintains a leading position in the domestic market. In addition, domestic Weier shares, AiWei Electronics and other enterprises are also involved in the field of RF switches and LNA. In the field of RF filters, there are Wuxi Haoda, Maijie Technology, North, Deqinghuaying and other enterprises emerging.
With the rapid penetration of 5G smart phones, the RF front end has become the most concerned new growth point in the semiconductor field, and the related target Zhuoshengwei has been warmly welcomed by the market, achieving the first RF front-end device company with a market value of more than 100 billion yuan in China. In addition to the 7 companies in the list of Aijiwei's "Top 100 Chinese Semiconductor Enterprises (2021)", domestic RF front-end tracks are still emerging start-ups in PA, filter and other tracks. With the blessing of demand and capital, last year, the Shanghai Stock Exchange intensively accepted the IPO applications of a number of RF chip manufacturers. However, under the seemingly fiery development momentum, the gap with international manufacturers is still an indisputable fact.
Compared with the performance of Skyworks and Qorvo, the international leading manufacturers in the field of RF front-end and the domestic leaders Zhuoshengwei and Weijie Chuangxin, the revenue of Skyworks and Qorvo in 2021 exceeded 5.1 billion and 4 billion US dollars, respectively, and the gross profit margin in 2020 was as high as 48.06% and 40.82% respectively; in contrast, Zhuoshengwei and Weijie Chuangxin, the revenue in 2021 is estimated to be about 4.6 billion yuan and 3.5 billion yuan, respectively, and the gross profit margin of Weijie Chuangxin is only 18.04%, respectively. The revenue gap is more than 6 times. This also reflects from another perspective the current situation that international giants still monopolize most of the market share.
Entering the 5G era, according to public information, a small number of enterprises such as Zhuosheng Micro, Weijie Chuangxin, Huizhi Micro, Andrey Micro have launched some 5G RF front-end device products, compared with the leading manufacturers in the United States and Japan, they are still in the position of catch-up, and the overall market share of 5G RF front-end devices is low. However, with the continuous improvement of 5G penetration in the Chinese smartphone market and the performance of domestic RF front-end devices, their market share is steadily increasing.
According to incomplete statistics from JW Insights, since June last year, the application of domestic RF chip manufacturers in a number of 5G smartphone models has been exposed, such as:
Samsung Galaxy F52 (5G) released, using Hida Technology's Phase5N RF front-end modules FX5627H, FX5627K, FX5805A;
Samsung's Galaxy A22 supporting 5G global frequency band was released, and the 5G Sub-6GHz new frequency band RF front end adopted The complete 5G solution of Wisdom Micro, which is the first time that Samsung has adopted a highly integrated 5G L-PAMiF RF module from a mainland manufacturer, one n77/78/79 L-PAMiF S55255 for transmission and reception, and three n77/78/79 L-FEM S15728 for reception;
Honor 50 was released, using Onruiwei's OM9901-11 and OM9902-11 two 5G PAs.
In addition, Weijie Chuangxin, Feijun Technology, Huizhiwei, Hantianxia, etc., the 5G separation solutions of several manufacturers have been more and more projects in OPPO, Honor, Xiaomi and other brands.
Domestic manufacturers began to evolve from "small and beautiful" to "modular"
In the 5G era, smartphones and other terminals put forward higher requirements for RF front-end devices in terms of communication frequency, number of frequency bands, channel bandwidth, MIMO, carrier aggregation, etc. The number of RF front-end devices inside 5G mobile terminals has increased rapidly, however, the space left for RF front-end devices inside mobile terminal devices has not increased synchronously, and the miniaturization, thinning and functional diversification of mobile terminals have continuously put forward higher requirements for the integration level of RF front-ends.
To this end, the high degree of integration of RF front ends has become a development trend, and thus raises the entry threshold of the mid-to-high-end market. The high degree of integration of the RF front end will further increase the design difficulty, and it is necessary to comprehensively consider the characteristics of PAs, filters, RF switches, LNA and other devices, as well as the combination of different types of chips, interference and coexistence, etc., and the design difficulty will be exponentially improved. In order to save PCB area and reduce the difficulty of R&D of terminal manufacturers, the RF front end gradually moves from discrete devices to modules.
Yole predicts that the overall market size of the RF front end will reach $25.8 billion in 2025, of which the RF module market will reach $17.7 billion, accounting for 68% of the total market size, with an average annual compound growth rate of 8%; discrete devices will still have a market size of $8.1 billion, accounting for 32% of the total market size, and the compound annual growth rate will reach 9%.
JW Insights believes that the development path of international RF front-end leaders is basically to become an industry leader in a certain track (such as PA or filter), and then transform from discrete devices to modular products through mergers and acquisitions or self-research. Domestic RF front-end manufacturers have also begun to show this trend.
The first category is platform enterprises. For example, Joyson Micro, from LNA, RF, and gradually expanded to other devices and modules, including DiFEM (diversity receiving module products), LFEM (LNA/filter integrated module), LNA bank (multi-frequency multimode LNA integrated module), and WiFi FEM products that meet the WiFi 6 standard. In addition, Joyson Micro operated in the early days with the asset-light Fabless model, and in recent years has begun to move towards the asset-heavy IDM model.
The second category is filter companies. In the RF front-end device of a single terminal device, the largest proportion of the amount of use is the filter, the technical barrier is relatively higher, with the continuous maturity of domestic RF front-end devices, miniaturized filter resources can be integrated not only become a scarce resource in the module design, but also the most prominent shortcomings of the domestic RF front-end module. At present, domestic enterprises such as Zuolan Microelectronics and Maijie Technology have announced that they will turn to discrete devices and modular products to develop side by side or work together with the industrial chain to develop modular products.
The third category is PA vendors. As the most advanced RF front-end track in China, domestic PA manufacturers have been at the forefront of the modularization process, and many manufacturers have launched WiFi FEM, PAMiD, PAMiF and other module products, but they are still dominated by low-integration and low-frequency modules.
JW insights believes that filters and PAMiD products are two important key to breakthroughs in domestic RF front-end devices. Since Sub-6GHz mainly uses IPD or LTCC filters, this part of the process is not difficult, so the domestic RF front-end device manufacturers, currently for the 5G smartphone UHB band PAMiF products have been mass-produced. However, for Sub-3GHz, a BAW filter is required, and the process is more difficult, and this part of the domestic manufacturers has not completely broken through. Therefore, the corresponding Sub-3GHz PAMiD product is also a key point that needs to be broken.
epilogue
Although the moduleing of RF front-end is the general trend, under the trade-off between cost and performance, in the next few years, low-end terminal equipment will still use a large number of discrete devices, the market size of modules and discrete devices has grown, and discrete RF front-end devices still have huge room for development. JW insights believes that domestic manufacturers can follow the development path of "deep ploughing of a single device - layout of multiple product lines - modularization", starting from the "small and beautiful" subdivision track, consolidating the foundation, and then seeking to penetrate into the high-end module.
On the other hand, as more excellent RF front-end manufacturers grow up, with the blessing of the capital market, JW insights believes that the trend of RF front-end module will also promote the merger and acquisition of domestic RF front-end manufacturers. (Proofreading/Sami)