The army of car companies "poured in" into the parts track, and the millimeter-wave radar market was reevaluated

Vertical integration is the key word in the new round of competition cycle.

From chips, sensors, to domain controllers; From the three-electric assembly to the intelligent chassis, whether it is Tesla, BYD, or NIO, Zerorun, Nezha and other latecomers, self-research + self-production + self-sales, the gameplay is different.

For example, Tesla took the lead in opening the self-research of intelligent driving chips, completely laying a leading position in the field of automatic driving (not subject to third-party chip suppliers). Designing chip architecture from algorithms (software or even functions) has become one of the key advantages of self-research by car companies.

Recently, Bai Jian, vice president of NIO Technology, said on Weibo that the company will be able to mass-produce its self-developed autonomous driving (AD) chip within 1 to 2 years. Previously, NIO's cockpit/smart driving domain controller was already an independent design + entrusted OEM model.

In addition, Leapmotor, which has developed most of its core components since the beginning, revealed earlier this year that it has received external orders for electric drive products and battery products and will start supplying them to third parties.

At the same time, with the launch of the next generation of centrally integrated electronic and electrical architecture (named "Clover"), Leapmotor will also open up a variety of different technical cooperation models, including: four-leaf clover architecture + peripheral controller, four-leaf clover architecture + peripheral controller + powertrain components, etc.

In addition, Siruijie, a joint venture between Leapmotor and Dahua, is also cooperating with some domestic automakers, including Leap. The company focuses on intelligent in-vehicle products and autonomous driving, and has a layout in the fields of cameras, millimeter-wave radar and domain controller products.

In May this year, Li Auto disclosed that it had established two subsidiaries. Among them, Jiangsu Changxiang Power Technology Co., Ltd. has a registered capital of 200 million yuan, and its business scope includes integrated circuit chip design and service, auto parts and accessories manufacturing, electric motor manufacturing, etc.

The other, Jiangsu Changxiang Automotive Technology Co., Ltd., has a registered capital of 180 million yuan, and its business scope includes technical services, technology development, auto parts and accessories manufacturing, etc.

In addition, many car companies, including Great Wall Motor, Changan Automobile, BYD, Lotus and so on, have also established or participated in joint ventures to establish intelligent technology-related companies, on the one hand, serving internally, on the other hand, they are also seeking solutions for external sales.

Among them, millimeter-wave radar, as one of the core sensors of intelligent driving systems, has become the focus of competition between new rounds of car companies and traditional third-party suppliers due to the continuous increase in the number of vehicles carried on the car in the past few years.

According to the monitoring data of the Advanced Engineering Intelligent Vehicle Research Institute, in 2022, 17.9527 million ADAS millimeter-wave radars (forward, backward, and blind zone) will be delivered in the Chinese market (excluding import and export), a year-on-year increase of 31.21%; Among them, the forward carrying increased by 25.21% year-on-year, and the blind area increased by 37.73% year-on-year.

From January to June this year, 9,379,200 ADAS millimeter-wave radars were delivered as standard, a year-on-year increase of 26.36%; Among them, the number of forward millimeter-wave radars was 4,592,900, a year-on-year increase of 27.02%, and the penetration rate was 49.41%; There were 4,775,100 angular radars, a year-on-year increase of 25.63%, and the penetration rate was 21.81%.

According to the forecast data of the Advanced Engineering Intelligent Vehicle Research Institute, as L2 and L2+ continue to be in the high-speed period of market growth, the total number of millimeter-wave radars will reach 35.32 million by 2025, with a compound annual growth rate of 29.90% from 2020 to 2025.

In addition, from the early single-forward radar, it supports AEB and ACC, to 1R+2R supports BSD and lane change assist, and then to 1R+4R supports NOA and mooring integration; From traditional 3D radar to 4D imaging radar, technology upgrades bring more possibilities.

From January to June 2023, the number of new vehicles equipped with the 3R solution in China was 1.28 million units, a year-on-year increase of 34.30%. Deliveries of new vehicles equipped with the 5R solution were 342,600 units, up 15.67% y/y.

This has allowed many OEMs to see the opportunity to reduce internal costs and profit from them.

In March this year, BYD's Verdy Technology officially released a new generation of forward millimeter-wave radar on the RF1 platform. Prior to this, angular radars have been put on the car one after another. In addition, 4D imaging radar, intelligent door radar, and in-cabin live detection radar will also be mass-produced.

As a leader in the new energy vehicle track in China and even the world, BYD has mainly adopted radar solutions from foreign suppliers such as Bosch, Veoneer, and Hella. In the "core shortage" cycle, some domestic local suppliers began to enter BYD's supply chain to "fight fires".

According to monitoring data from the Advanced Engineering Intelligent Vehicle Research Institute, taking 2022 as an example, BYD's new 3R configuration deliveries will reach 619,600 units, accounting for nearly 20% of the overall market. With the gradual delivery of the 5R solution in BYD's new cars, BYD has become more firm in its self-developed strategy.

For example, before 2021, Bosch and Veoneer were BYD's main suppliers; Since then, Chengtai Technology has entered the BYD system as a local supplier, and has successively begun large-scale delivery of models such as Song, Tang and Han.

Today, with the landing of BYD's self-developed forward radar, the share of existing suppliers will be gradually seized.

In the angular radar part, from Hella, Bosch to Veoneer, they were also BYD's core suppliers. However, since the launch of the self-developed RB1 platform, BYD (Verdy Technology) disclosed that its shipments exceeded one million units by the end of 2022 and undertook the full share of BYD's angular radar.

This means that for BYD's third-party radar suppliers that are delivering and some new fixed points, they will enter an extremely difficult cycle, either reducing prices (and Verdy) or gradually clearing them. According to the data, excluding exports, BYD's passenger cars will be equipped with more than 2.3 million millimeter-wave radars in 2022.

Great Wall Motor also officially launched its in-house incubated perception hardware company "Ruibo Perception" last year, mainly focusing on the research and development of intelligent sensors, including 4D millimeter-wave radar and high-definition cameras.

According to public information, the "Ribo Perception" business was previously part of Mande, a parts subsidiary of Great Wall Motor, and was officially spun off and independent in January 2023. At present, it has obtained a number of model projects within the Great Wall.

According to the plan, the angular radar and forward 4D radar will be mass-produced in September this year, and the next-generation distributed 4D radar (data processing transferred to the domain controller) is undergoing in-depth collaboration and verification with the whole vehicle, and mass production is planned to be achieved in mid-2024.

Up to now, Bosch, Aptiv and Veoneer are the main suppliers of millimeter-wave radar of Great Wall. Data shows that in 2022 (excluding exports), Great Wall's passenger cars will be equipped with nearly 600,000 millimeter-wave radars.

"For those customers (car companies) who have orders in hand, in the context of self-development, the subsequent growth space and valuation of third-party millimeter-wave radar manufacturers are a big question mark." Some heads of investment institutions said.

In the view of the above-mentioned people, those third-party suppliers who are supplying BYD or getting a fixed point in the market are facing a huge risk of uncertainty.

In the view of the Advanced Engineering Intelligent Automobile Research Institute, in the intelligent electric track, as more and more car companies cross the threshold of scale, the trend of vertical integration has become irreversible. At the same time, market competition will become increasingly intense.

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