According to a research report γ"released by China Interna≤₹tional Capital Corporation, benefi>>↕ting from the rapid expansion ¥'of the Internet of Things, the wirelesπ¶αs communication module ind€•∏ustry is in a fast gro∏≠ wth channel, and the innovatiπ±♦on vitality of small and med"∑Ωium-sized enterprises ¥"promotes the rapid develop≈♣↔ment of the industry, Zhitong Finance ∏♠≤ has learned. The downstream demand ¶÷ε±of the wireless communica ≥tion module industry☆§ is fragmented, and cu≈÷stomized requirements ex≥π$©ist for wireless communication$←₩ modules in the segmented fields. Sma λβll and medium-sized enterprises can f'αocus on the segmented fields to culΩδtivate competitive advantages <≥↑λand promote the high-quality>♠₹ development of the industry. IΩ₹ φt is hoped that in the future, more entπ↔₹erprises will take the∏ >₽ road of specialization, refinementδ↕" and innovation, break the technolo≈"gy monopoly, open up the industri♥₽αal chain and supply chain ofγ<βφ wireless communication modules, deep₽>©en domestic substitution and ↔>∑₩promote industrial u≠→pgrading.
Cicc's views are as follows:
1. Why is the wirelesδλs communication module inφ ∑'dustry so important?
Wireless communication •$∑★module uses wireless technology ↑♣≈to transmit, so that all kinds of ₹↑ terminals can realize communica₽πλtion or positioning functions. As a♠∑©'n important carrier of the Int φ↕ernet of Things, it is also ≤ an important medium to real÷₹ize wireless communication. In the c♣ontext of the rapid expansion o§₽↓f the Internet of Things market,✔¶ the wireless communicati£> γon module plays a key role of™ε±™ "water seller" and is exp×Ω±ected to usher in a sustained and rap★<♥id growth of demand.
The bank believes that the &qu¥•♣↔ot;Internet of everything" trend♠♥≥§ will help the Internet •§of Things market scale con∑α≤σtinue to grow. With the popularity o"↕∞ f smart home, Internet of vehicles ♣™×and other applications in the consum★∑ption scenario and the penetraσtion of the industrial Intern et in the industrial sceα¶☆nario, the number of Internet♦α of Things connectio®®ns is still expected to maintain•& a rapid growth.
According to IoT Analytics, the numb♥ δer of global Internet of Thin±↕€gs connections is expected to reaΩ±φch 27 billion in 2025, with a compound←< growth rate of 22% between 2021 קand 2025, of which 5G I÷ >nternet of Things composite grow€™Ωth rate of 159%.
2. What is the industry chain÷₩ of wireless communication moσ$dules?
Wireless communication modφule industry chain is com§∑♦δposed of "upstream chip -- mids¶λtream communication module -- downstre ¥am Internet of Things application&qu&∞ot;. Wireless communication modu♣₽↔le manufacturers purchase chips∑←, PCB, discrete devicesλ✘ and other components fro₽εm upstream equipment manufacturers, an䧮d enter downstream terminal ap≈plications through customized hαardware and software£δ design, testing, certificat✔Ω>∞ion and other links, thus p§→•romoting the development of→©λ∏ the Internet of Things industry.
Upstream: high concentration of₩≥ chip manufacturers
Upstream of the wireless communicat¶<ion module industry c✘•hain are chip, PCB, discrete devices,™✔× structural components and oth✘♠₩γer electronic components manufacturers.♦✘←♠ Among them, the cos™™αt of chip accounts for✔σ' about 80%. Baseband chip, radio f≥®requency chip and memory chi♠εp are the three major communicatio ↔&n chips. The market concentratio↔∏<πn is relatively high. PCB''φ, resistance and capacitance sensin•$g components and other raw material↑×s industry belongs to t₩™he perfect competition market, s≠α♠φtrong substitution.
Midstream: Market share is ×®concentrated among do↔mestic manufacturers
By virtue of cost advanta$÷ ge, wireless communicatio₹®↑n module industry market share graduall<λ≠&y concentrated to domest>✔∞©ic manufacturers. In the f✔α↑$irst half of 2017, the top five cellul"™ar module shipments were all overs•δ↕☆eas (with a combined 65% market share) ©←; In the first quarter of ÷¥₽♥2022, domestic module ≤→₽ manufacturers accounted∏∏ for more than 60% of the shi¶×&pments and four of the top five<•→β in the world.
Downstream: Fragmented ap↕↓×≈plication scenarios,₩¥ ¥ market size is expected to continue≥≈ to expand
The downstream of the wireless ↑®¥±communication module industry chai↑∏n is mainly the intelligent terminaוl equipment manufacturers of the Intλ∞ernet of Things. With the continuoελ↕®us development of 5G technology, t§±he efficiency of intelligent manufacε<£turing, intelligent driving, intel↑' ligent medical treatment, intelligent e♣←πducation, smart city and other diversi✔♣fied AI iot scenarios w®>↕ill be improved. The bank believes t≥πhat wireless communication mod§ules are expected to lanπβd in various iot scenarios.
3. Look for the expertise in the w•¶∏ireless communication module in♦¶♥dustry
In the wireless communication module ♣<αindustry chain, the upstream ch πip market is dominated b€∞ππy overseas manufactur£λ®ers. The localization rate of ∏baseband chips, memory cש×∞hips and RF chips with high≤↔∑☆er gross profit rate is st≥±ill at a low level, and the particφ≤πipation of specialized and special eελnterprises is low. The loc ↔€←alization rate of communication module πε™is at a high level, and the participatiσ♣σon of specialized and special new ent✘βerprises is high.
Take cellular communication module a₹&₩s an example. In the first quarter₩€↕ of 2022, there were si←↑x Chinese companies in the top 10 glo♣☆bal market share, and four of them wereε$γ specialized and special start-ups.↕φ<
The gross profit rate of overseas ★∑♥manufacturers of communication modules$ is about 30-45%, and the gross ±±αprofit rate of Chinese manufact €urers' overseas business is about 2♣ε0-35%. However, due to the high labor >↓cost, high expense and sm<☆£→all market share of ove∏ ↓rseas manufacturers, the net profit&δ↓ rate of domestic manufactu€✔rers is still higher≈÷ than that of overseas manufac§ turers in the case of low gross profit"Ωπ↑ rate.
The bank believes that bene↔>fiting from the rapid expansion of t$&he Internet of Things, the wireless ∞₹∑communication module industry ₽Ωis in a fast growth channel, and t→©he innovation vitality of ₽≠small and medium-sized enterprises proε•λmotes the rapid development of the indu♠₹₽↔stry. The downstream→α§ demand of the wireless communica♥↕∏αtion module industry is fragment ®↓ed, and customized r"↔γequirements exist for wire✔ less communication modules in the∑×→¶ segmented fields. Small and medium-sφ ∞★ized enterprises can focus on the segm↕×→ented fields to cultivate competitiveπ₹ advantages and promote the high-qualit€☆♣$y development of the industry. It is hoped that in the future, more en<®₽ terprises will take the road of specialγ↔£ization, refinement and innovation, b©>reak the technology monopolyσ®×', open up the industr↕© ≤ial chain and supply chain of wir¶$∞>eless communication modul<←es, deepen domestic substitutio₩☆n and promote industrial upgradingα←.
