The 5G war behind Fuji rehabilitation workers: tight supply chains, fights between chip manufacturers

Foxconn’s Zhengzhou campus, as the world’s largest iPhone assembly plant, employs 780,000 people and supplies more than 40% of the world’s iPhone products. However, affected by the epidemic, only 10% of the workers in this factory with tens of thousands of employees have returned to their jobs at one time.

In order to encourage the resumption of work, the factory has raised the entry bonus to 7,000 yuan. In addition, Foxconn officially announced that it has hired Zhong Nanshan, an academician of the Chinese Academy of Engineering and a well-known expert in pulmonology, to serve as the group’s general consultant for new crown pneumonia epidemic prevention and resumption of work.

Resumption of work has become Foxconn’s biggest problem. As the world’s largest consumer electronics foundry, on the one hand, it is labor-intensive: Wind data shows that by the end of 2018, the total number of employees of Fii (601138.SH) was 250,000, of which nearly 190,000 per capita It is a production employee, and it is difficult to resume work, which has a serious impact on production. On the other hand, Foxconn is eager to resume work, and even moved out of Academician Zhong Nanshan. Behind it, the production capacity of consumer electronics, especially mobile phones, is tight.

Apple said that due to the impact of the epidemic, the global iPhone supply is tight, and the revenue target for the first quarter as of March will not be achieved. According to an analysis by Tianfeng Securities, the epidemic may lead to a delay in the launch of the iPhone 12, and it is expected that iPhone shipments in the first quarter of 2020 will drop by 10%.

2020 is the year of the mobile phone replacement wave. The frequent release of 5G mobile phones and the tight production capacity of upstream components reflect the resonance of the entire industry chain and downstream consumers’ replacement needs. Operators, chip manufacturers, mobile phone manufacturers and component manufacturers are all in full swing to welcome the 5G replacement wave in 2020. ‘s arrival

Mobile phone chip manufacturers “fight” first

An analyst who did not want to be named told China that in general, terminal chips will lag behind the construction of communication networks, and the launch of new phones needs to adapt to the progress of the chips, but this time, mobile phone chip manufacturers led by Huawei have moved very quickly. At present, 5G has just started and 5G mobile phones can be used. In 4G, 4G network was first and then 4G mobile phones. Now 5G is progressing faster than 4G.

Behind the frequent introduction of new phones by mobile phone manufacturers, major chip manufacturers are vying for their positions. From the two oligopolies of Qualcomm and MediaTek, to the “Warring States” era such as Qualcomm, MediaTek, Samsung, and Ziguang, the popularity of 5G mobile phones will also promote chips. Changes in the competitive landscape of manufacturers.

The 5G war behind Fuji rehabilitation workers: tight supply chains, fights between chip manufacturers

In December 2019, Qualcomm released the Snapdragon 865 mobile platform, which is Qualcomm’s highest-end 5G mobile platform, using the second-generation 5G modem and radio frequency system – Snapdragon X55.

According to Qualcomm, the Snapdragon 865 mobile platform is the most advanced mobile platform in the world, and can provide a series of breakthrough features for flagship terminals, including gigapixel-level shooting, end-game-level features supported by Snapdragon Elite Gaming, and fifth-generation Qualcomm artificial intelligence. Intuitive interactive experience powered by AI Engine.

On February 26, Qualcomm announced that more than 70 5G terminal designs using Snapdragon 865 have been released or are under development so far, including Asus, Black Shark, Fujitsu, iQOO, Lenovo, Nubia, OPPO, realme , Redmi, Samsung, Sharp, Sony, vivo, Xiaomi and ZTE and many other global mobile phone brands.

On the same day, on February 26, UNISOC released a new generation of 5G SoC mobile platform – Tiger Ben T7520. The chip was developed based on Zhanrui’s 5G technology platform Makalu. It is its second-generation 5G smartphone platform. It adopts a 6nm EUV process technology, which improves performance and reduces power consumption to a new low.

According to Zhanrui, the product integrates the world’s first 5G modem that supports full-scenario coverage enhancement technology, which can expand the patented technology of large-bandwidth 4G/5G dynamic spectrum sharing, enabling operators to deploy 5G on the existing 4G frequency band, and at the same time Compared with the previous generation 7nm process, the 6nm EUV transistor density has increased by 18%, and the chip power consumption has been reduced by 8%.

Since 2019, major manufacturers have released 5G SoC solutions. At present, the companies that have launched 5G baseband chips for mobile phones are Huawei, Qualcomm, Samsung, MediaTek and UNISOC. In addition to Qualcomm, the other four have launched 5G SoC chips with integrated baseband chips.

Among them, Huawei Hisilicon Kirin 990 was first released and has been successfully applied to Mate 30 and Honor V30 5G mobile phones. MediaTek released its first 5G SoC, Dimensity 1000. Huawei’s chip is only for its own use, while vivo released it in December last year. Equipped with the Exynos980 baseband chip mobile phone jointly developed by Samsung, Xiaomi has just released the Xiaomi Mi 10 with Qualcomm Snapdragon 865.

Industrial Securities said that under the effect of “de-beautification”, MediaTek received Huawei, Oppo, Vivo and Xiaomi 5G mobile phone new product development projects as soon as possible, and it is expected that MediaTek’s sub-6GHz 5G single-chip solution will have inherent advantages in 2020. , Qualcomm’s global market share may face certain pressure; Samsung’s Exynos 980 targeting the mid-range market is expected to replace the Snapdragon X55 integrated solution. In the future, the growth momentum of more than 200 million units in the global 5G mobile phone market in 2020 will still depend on the emergence of mid-range 5G mobile phones. It is also the market place where Qualcomm, MediaTek and UNISOC are currently active.

Large-scale commercial use of 5G mobile phones

The early arrival of the “5G mobile phone replacement wave” is mainly due to many factors. First of all, in terms of network coverage, Beijing, Shanghai, Guangzhou, Hangzhou and other urban areas have achieved contiguous 5G network coverage. According to the plan, 5G will cover more than 40 large and medium-sized cities across the country within this year.

On the other hand, the price of 5G packages is lower than expected. Recently, the 5G commercial tariff packages released by the three major operators generally start at 128 yuan per month, which is an acceptable range for many users; most importantly, the price of 5G mobile phones has also stimulated Consumer demand for replacement.

In December 2018, Redmi, a subsidiary of Xiaomi, officially released the Redmi K30 series, Redmi’s first 5G mobile phone, with a starting price of 1999 yuan, which made the 5G mobile phone quickly drop to 2000 yuan, which will help to accelerate the arrival of the 5G replacement wave.

The above-mentioned analysts told China that referring to the period of 4G replacement, when the price of 4G mobile phones dropped below 2,000 yuan, the penetration rate of 4G mobile phones began to increase rapidly.

According to GSMA’s previous forecast, in 2020, 170 operators in the world will realize 5G commercial use, and major countries and regions will cover 5G networks, and the number of 5G users will reach 170 million; by 2025, the number of 5G users in the world will reach 1.77 billion.

With the advent of the above-mentioned wave of phone replacements, all major mobile phone manufacturers have seized the opportunity, hoping to undertake the wave of phone replacements through multiple series of 5G mobile phones. According to data from the China Academy of Information and Communications Technology, 5G mobile phones have been sold in my country since July 2019. A total of 35 models were launched in 2019, and a total of 13.77 million units were sold in 2019.

In the second half of 2019, major mobile phone manufacturers have successively released 5G mobile phones. However, due to the lack of large-scale benefits in the early stage of commercial use and the lack of 5G chip solutions, major brands of 5G mobile phones are concentrated in flagship models with relatively high prices. . But in 2020, as major chip manufacturers have launched or upgraded 5G solutions, the 5G market may enter an explosive period under the benefit of scale.

Taking Huawei as an example, in 2020, it plans to implement the machine sea strategy and launch 5G mobile phones covering multiple price bands. About 10 new 5G high-end and mid-range mobile phones have been certified; Xiaomi Lei Jun said that this year will be 5G mobile phones. In a critical year for phone replacement, at least 10 5G mobile phones will be launched throughout the year.

Operators are also actively promoting the arrival of 5G: China Telecom requires that from 2020, all 5G terminals are not allowed to have CDMA frequency bands and standards, and that VoLTE switches are not allowed to speed up the withdrawal of CDMA from the network.

China Mobile released the “China Mobile 2020 Terminal Product Planning”, which shows that it expects that the 5G mobile phone market will exceed 150 million units in 2020. By the end of 2020, the price of 5G mobile phones will be further reduced to 1,000-1,500 yuan, and the 5G mobile phone market sales will be more than 4G mobile phones.

Wang Hengjiang, deputy general manager of China Mobile Terminal Corporation, predicts that in the first quarter of 2020, a number of chip platforms will launch multi-price segment products; in the second quarter, low-priced chips will be launched, and solution manufacturers will enter the market, driving the price of 5G mobile phones to drop. In terms of terminals, manufacturers will launch high-priced products in the first quarter; from June to July, 5G mobile phones will be launched at around 2,000 yuan; in the fourth quarter, the price of 5G mobile phones will drop to 1,000 to 1,500 yuan. “

At the same time, major research institutions have revised up their expectations for future 5G mobile phone shipments. Among them, IDC estimates that the number of 5G mobile phones worldwide will reach 400 million in 2023, while Canalys estimates that 5G mobile phones will reach 1.9 billion in the next five years. Fundamentals estimates that the penetration rate of 5G mobile phones will increase from 1% in 2019 to 18% in 2020 (about 280 million units).

In addition to the 5G boost, my country’s smartphone market has ushered in a natural replacement cycle after four consecutive years of decline in shipments: my country’s smartphone shipments in 2019 were 389 million units, a year-on-year decrease of 6.2%. hit a nine-year low.

Upstream of the industrial chain releases signals

The mobile communication industry occupies about 1/3 of the downstream market of semiconductor applications, which is very important to drive the demand of the entire electronics industry. According to SIA data, communications (including mobile phones) accounted for 31% of the market share of semiconductors in 2018, and the mobile phone industry is a major downstream demand driver for the electronics industry.

From the perspective of geographical distribution, the mainland, Taiwan, South Korea, and Japan play an important role in the global Electronic component manufacturing industry. With the pull of downstream demand, the global semiconductor cycle is rising, and the prices of storage, panels, and components have started.

In terms of foundry and packaging and testing, the manufacturing side is most obviously driven by mobile phone manufacturers and chip manufacturers. As the world’s top wafer foundry, TSMC’s financial revenue changes partly reflect the prosperity of the semiconductor industry. Its revenue in the third quarter of 2019 achieved double-digit growth both on a month-on-month basis and year-on-year. Thanks to the contribution of 7nm process revenue driven by high-end smartphones and high-performance computing products. In the fourth quarter of 2019, TSMC’s smartphone business surged 16% sequentially, driving revenue growth and gross margin improvement.

Since the end of last year, the semiconductor manufacturing side has been in a situation of tight production capacity. The production capacity is full, the orders are full, and some manufacturers even outsource the orders. Taking TSMC as an example, TSMC’s 7nm production capacity has been fully loaded, resulting in a significant extension of the delivery period for new customer orders, from the previous 2 months to 6 months. In addition to the urgent production capacity of 7nm process, 16nm, 12nm and 10nm are also in short supply.

According to reports, due to the shortage of TSMC’s advanced process capacity, Qualcomm has handed over the Snapdragon 865 and Snapdragon 765 to TSMC and Samsung for simultaneous production in order to ensure the wafer production capacity.

In mainland China, wafer fabs such as SMIC (HK0891), Hua Hong Semiconductor (HK1347), and Huajing were also fully loaded and their revenue increased. According to the latest disclosure, the capacity utilization rate of Hua Hong Semiconductor’s third factory has increased to 96.5% in the third quarter, which is close to full load. The 5G terminal demand has increased the communication market revenue by two places, which is the main source of growth for the 8-inch factory. It was disclosed in the fourth quarter financial report that the capacity utilization rate in the quarter was as high as 98.8%, an increase of nearly 9 percentage points over the same period of the previous year.

In order to cope with downstream demand and release production capacity, foundries have expanded capital expenditures, which is an important sign of the recovery of the semiconductor industry.

TSMC took the lead in promoting a substantial increase in capital expenditure. Its capital expenditure in 2019 increased to 14.8 billion US dollars, and it is expected to be 15 billion to 16 billion US dollars in 2020, which is the highest capital expenditure in history.

In addition, 5G chips need to use advanced packaging technology, and the packaging and testing end also opens the curtain of capital expenditure. Jingfang Technology (603005.SH) and Tongfu Microelectronics (002156.SZ) will increase and expand production, and their production capacity will increase rapidly; Huatian Technology (002185.SZ) will open Nanjing plant in 2020; Changdian Technology (600584.SH) announcement The rhythm of fixed asset investment plans in 2020 is accelerated than before, and it is expected to be at least 3 billion for the whole year, of which at least 1.43 billion will be targeted at key customers.

The high prosperity of the manufacturing end will directly drive the recovery of semiconductor equipment. According to the financial report released by ASML, a total of 26 EUV lithography machines were shipped in 2019. It is expected that 35 EUV lithography machines will be delivered in 2020, and 45 to 50 units will be delivered in 2021, which is 2019. about twice.

According to SEMI’s forecast, the global semiconductor equipment sales in 2019 was US$57.6 billion, down 10.5% year-on-year. It is expected to gradually pick up in 2020, with a growth rate of 5.5%, reaching US$68.8 billion; in 2021, it will create a new high, reaching US$68.8 billion.

In the field of electronic components in the midstream, a new round of price increases has begun.

From a long-term perspective, there is a cyclical pattern in the global electronics industry, and the main affected variables include global macroeconomic prosperity, downstream terminal demand, etc. The boom period brought by the peak period and the high growth rate of automotive electronics.

Memory price is an important index in the semiconductor industry, which represents the prosperity of the entire industry. According to Wind data, the DXI index has risen by 5298 points since December, an increase of 30%; the price of 4Gb DRAM has climbed to US$1.872, an increase of 25% since December. , a new high since the current round of memory prices.

Taking passive components whose price is most sensitive to supply and demand as an example, according to media reports in Taiwan, due to insufficient work resumption due to the epidemic and a severe contraction in supply, Yageo Electronics, the global giant of passive components, plans to increase the price of chip resistors by 70-80% in March.

Fenghua Hi-Tech is a domestic leader in passive components. Its products include MLCC, chip resistors, chip inductors, ceramic filters and other passive components. It is one of the major chip resistor manufacturers in China. On February 25, the daily limit for two consecutive days.

Mobile phones are the most important downstream area of ​​MLCC, accounting for as high as 38%. Compared with 4G mobile phone, the MLCC consumption of 5G has increased by 30%, which is expected to drive the continuous growth of MLCC demand. According to Murata’s forecast, it is expected that by 2024, the consumption of smartphone MLCC will increase by 50% compared with 2019.

Tianfeng Securities believes that the overall price of the electronic components industry will enter a reversal cycle in the second half of 2019. Before that, product prices and gross profit margins have reached the bottom level. According to the supply and demand pattern and competition structure of different industries, some industries are the first to enter the price In the upward cycle, such as MLCC, LCD and memory chips (especially memory chips), the current price of some industries has bottomed out and is in the final stage of destocking.

The Links:   MG100H2CK1 SK35GAL12T4