According to a research r ₹♥<eport released by China International≈±λ Capital Corporation, benefiting f'∑∞rom the rapid expansα ₹ ion of the Internet of Thin↓&gs, the wireless communicati ≥ on module industry is in a fast growth ∑₹>channel, and the innovation vitality of&≤✔ small and medium-sized eφ→nterprises promotes "the rapid development of the in≤✘>₽dustry, Zhitong Finance has learned. The downstream demand of the wirel∏€$♥ess communication moduleφσ↕ industry is fragmented, and cβ↕ustomized requirements exist for w¥™ireless communication₹₽£§ modules in the segmente¶₹↕d fields. Small and medium™♦±-sized enterprises can ✘>±♦focus on the segmented fields to cul✔≥ tivate competitive advantages and proπσmote the high-quality developmentφ★ of the industry. It is hoped t♣•hat in the future, more enterprise↔÷§s will take the road of sp₹λγecialization, refinement©×' and innovation, break the techn∏'≠→ology monopoly, open"∏Ω↔ up the industrial chain and su£₩pply chain of wireless coπ¶mmunication modules, deepen d≥↓♦±omestic substitution a™Ωnd promote industrial upgrading.
Cicc's views are as "follows:
1. Why is the wireles∑βλs communication module industry ↕✘©so important?
Wireless communication mod←ule uses wireless technology to trans☆©mit, so that all kind∞↓ s of terminals can realize±¥ communication or pos₹ itioning functions. As an important±α carrier of the Interne£≥t of Things, it is aλ✘lso an important medium to realize wire♠←¥less communication. In the context ♦₽of the rapid expansio™₽n of the Internet of Things mar ≥ket, the wireless co♣λmmunication module plays a keyΩ★ role of "water seller" ∑λ≥and is expected to usher in ✔$$a sustained and rapid growth of dδγ≥emand.
The bank believes that §the "Internet of everythin' >♦g" trend will hφ®÷±elp the Internet of T↑©≥ hings market scale continue to grow. ↓ ®With the popularity of smart hλ←↔ome, Internet of vehicles and o✔∏ther applications in the c∏£γ≥onsumption scenario and the> Ω penetration of the indu'®±strial Internet in the industrial s±÷←€cenario, the number of Internet α δof Things connections is ≤still expected to maintain a ra¥↓≤pid growth.
According to IoT Analytics, t< he number of global Internet of Things¥β connections is expecte★←d to reach 27 billion in 2025, with♥&¥ a compound growth rate of 22% betw×¥→een 2021 and 2025, of whic↕←↕★h 5G Internet of Things composite ★←≈growth rate of 159%.
2. What is the industry®β₽ chain of wireless communica≠∏™tion modules?
Wireless communication module≤€ industry chain is compos≈>&↕ed of "upstream chip -- mids π∏tream communication module -β©- downstream Internet of Things a₩★pplication". Wireless commu ≈Ωnication module manu∏δfacturers purchase chi₹₹¶ps, PCB, discrete devi÷'ces and other components fromδ≠←φ upstream equipment manufactu✔✔♥rers, and enter downstream terminal ✘™±↓applications through customi≥¶zed hardware and software design,ε≠α testing, certificati→∞on and other links, th→→us promoting the development of the¶¶γ Internet of Things industr₹¶y.
Upstream: high concentration of ↑ ♣chip manufacturers
Upstream of the wireless communica♠★φ×tion module industry chain are chip, PC★λB, discrete devices, structu€δδ ral components and othe↑r electronic components manufa✔≥ε≈cturers. Among them, t∞₩he cost of chip accounts for↓>₹₩ about 80%. Baseband chip, radio ☆>¶§frequency chip and memory chip are t∏≤φhe three major communication chβ®≤←ips. The market concentration is >♠relatively high. PCB, resist€€ance and capacitance sensing compone≈₹←nts and other raw materi£¥als industry belongs to the pe ←®rfect competition market, s♠↔trong substitution.
Midstream: Market share i✘ ♥s concentrated among×∑ domestic manufacturers
By virtue of cost advantage, wirel↕€ess communication module$∞ ≤ industry market share $&∑gradually concentrated to domest↕×ic manufacturers. In the first half oσ∑↑ f 2017, the top five cellular < module shipments were all overseas (☆←with a combined 65% market share); In↕≈<♥ the first quarter of 2022, domestic moδdule manufacturers accounted for∏ ₽₩ more than 60% of the σα☆✘shipments and four of the top five™δ in the world.
Downstream: Fragmente →d application scenarios, market size isβ™λ♣ expected to continue to expand
The downstream of the wireless co★∑≥mmunication module industry chain is≥★ π mainly the intelligent terminal equ™₽ ↕ipment manufacturers of the Internet of↑₹ Things. With the continu✔λ'ous development of 5G ♦✔'↑technology, the efficiency o®€λf intelligent manufacturing♠>∏, intelligent driving, intelligent me≠dical treatment, intelligent ÷>™education, smart city and other di$₩versified AI iot scenaε×rios will be improved. The bank b∞<elieves that wireless ₩÷communication module×$s are expected to land in variou∏πs iot scenarios.
3. Look for the expertise in the wirele$ε↓ss communication modulφ♣✘e industry
In the wireless commun δ∏★ication module industry c<σ©hain, the upstream ch≠≠&βip market is dominated by oveγ≈&rseas manufacturers. T÷↕&he localization rate of §baseband chips, memory ch¥ips and RF chips with higher gross pγβσ✔rofit rate is still at a low level,α≤ and the participation of specialized ↑≤and special enterprise£→s is low. The localization rate of$™ communication module is≤♦ at a high level, and the particππipation of specialized and sp↑$ecial new enterprises is high.
Take cellular communication module ✔β±±as an example. In the first quarter ofγφ 2022, there were six Chinese c'↕>ompanies in the top 10 global market s∏γ₹→hare, and four of them were s¥λ♠pecialized and special start-up₽×♥♦s.
The gross profit rate ±≈✘of overseas manufacturers of comm✔≠±unication modules is about 30-45%, and∞×δ the gross profit rate of Chinese man←★☆₹ufacturers' overseas ≤♠business is about 20-35%. Howe σ✔ver, due to the high labor cost♣&, high expense and small marketφ$> share of overseas manufacturers, the n&™₽et profit rate of domestic ♣≥manufacturers is still higher than©δ that of overseas manufactu♥♣rers in the case of low gross profi > ∞t rate.
The bank believes that ±¶÷benefiting from the rapid expansion ofΩ♠ the Internet of Things, the wir™©eless communication module indusδ try is in a fast growth c≈≠"hannel, and the innovat₽±✘ion vitality of small and mediuλ↕m-sized enterprises promotes the rap"§λid development of the industry. T'π' he downstream demand of th™>e wireless communication module indus↓"try is fragmented, and customized requi→>✔©rements exist for wireless cδ<&γommunication modules in the segm♠÷ented fields. Small and medium-≠$sized enterprises can ε± focus on the segmented '≈£∞fields to cultivate competitive¶φ☆ advantages and promote the hi"₹gh-quality development of the industr>πy. It is hoped that in the••↔ future, more enterprises wilφ€♦≤l take the road of specializat→→¥€ion, refinement and innova÷±σtion, break the technology mo<nopoly, open up the ₽♠ ₽industrial chain and su©↑∑✘pply chain of wireless communicationβγ∏• modules, deepen domestic ¥★∑substitution and promote industria∑↓l upgrading.
