According to a research report rele>ased by China International Capita≥ πl Corporation, benefiting from the ra÷≈pid expansion of the Internet of Thin→>÷gs, the wireless com&₽↑munication module industry♣$$ is in a fast growth cha >☆₩nnel, and the innovation vital'>ity of small and med₹'→ium-sized enterprises♠↑• promotes the rapid deve><lopment of the industry, Zhitong Fin¶↓β✔ance has learned. The downstream demand of t♥<he wireless communication module ∞®industry is fragmented, and∞♦× customized requirements →€<exist for wireless commun<↔™&ication modules in the segmen&©ted fields. Small and medium-siz£¥•ed enterprises can focus>₩" on the segmented fields to cultivate c✘φσompetitive advantages and promote←δ the high-quality developmenφ↑t of the industry. It is hopeδ↔'♣d that in the future, more ent'×≠erprises will take t σ ✘he road of specialization," refinement and innovatio ₩n, break the technology mo ∏nopoly, open up the industrial ch≈γ✔ain and supply chain of wβ♣±ireless communication modules,★±¥ deepen domestic substit÷÷₹Ωution and promote ind∑∑ φustrial upgrading.
Cicc's views are as f→¥✔σollows:
1. Why is the wirele €∞ss communication module industry s₹λo important?
Wireless communication module u↑φ¶ses wireless technology to trβ ₩∏ansmit, so that all kinds of t¶↔±☆erminals can realize communicσ•ation or positioning functions. ↑€As an important carrier of the Int™☆↔ernet of Things, it is also an im§σ♦φportant medium to reali®δ→ze wireless communication. In the ÷∏ context of the rapid®λβ expansion of the Internet of Things ma♣♦rket, the wireless communicati✘γλon module plays a key role of ✔₩®•"water seller" and is expe ¥cted to usher in a sustained and rapi∑♠d growth of demand.
The bank believes that the &¶≤÷σquot;Internet of everything" tre≈•>nd will help the Internet of T ↕hings market scale continue σ§to grow. With the popularity of s"÷mart home, Internet of vehicles and otΩ∑£her applications in the consumption s&→cenario and the penetration of ₹the industrial Internet in the industriδ₹ al scenario, the number of Internet >of Things connections is still expected≠"γ to maintain a rapid growth.
According to IoT Analytics, the number π↕of global Internet of Things con♣$←nections is expected to< reach 27 billion in 2025, with a comp∏₽>ound growth rate of 22% between 20≈♠♠φ21 and 2025, of which 5G Interne∞σ∑αt of Things composite growth rate of ↑× 159%.
2. What is the industry chain o↓&€§f wireless communicatio←®¥₩n modules?
Wireless communication m€✘odule industry chain♥' is composed of "upstream chip §γ-- midstream communication module -- d×♦πownstream Internet of Thiδφngs application". Wiφ•reless communication module manufac✘<↔ turers purchase chips, PCB, ÷£discrete devices and other com☆←ponents from upstream equipment manu♠∏✔facturers, and enter downstreamπ≈ terminal applications through c" ustomized hardware and software d•>esign, testing, certif₩©ication and other lin✔βks, thus promoting the developm&♠←ent of the Internet of Things industr★★¥€y.
Upstream: high concentration of chip ma∑♥₹nufacturers
Upstream of the wireless co ≠mmunication module in ¥dustry chain are chip, PCB, discrete✘δ× devices, structural components and¶♦λλ other electronic components ma₩£nufacturers. Among them, >Ωλ©the cost of chip accounts for ₽β↑λabout 80%. Baseband chip, radio fr®₹σequency chip and memory chip are "€the three major comm✘∑unication chips. The market concent←ε•πration is relatively high. ε☆β&PCB, resistance and capaci $↕tance sensing components and π♥other raw materials industry belongs to✘₽♣ the perfect competition market, stro¥>←ng substitution.
Midstream: Market share i★s concentrated among domestic manufact★ urers
By virtue of cost advantage, wireless c₹£≈ommunication module induδ↓stry market share gradually co'∏ncentrated to domestic manufacturersα£. In the first half of 2↑↑β→017, the top five cell<÷♣₽ular module shipments were all over™∑seas (with a combined 6'≤>÷5% market share); In the first qu∏₩δ÷arter of 2022, domest•§ ∞ic module manufactur→ ♣ers accounted for more t÷δ>han 60% of the shipments a&≤±nd four of the top five in the world €.
Downstream: Fragmented ap>€✔↓plication scenarios, market size isσ expected to continue to ™ expand
The downstream of the wireless communic®≥♦ation module industry chain is mainly ≤×÷the intelligent terminal equipm€'ent manufacturers ofγ the Internet of Things. With the ☆©continuous development of 5G te§≠ ®chnology, the efficiency of intel✔∞ligent manufacturing, intelli♣☆gent driving, intelligent medical t¥¶εσreatment, intelligent educat <ion, smart city and other diversified &★₩AI iot scenarios will beλ<↕λ improved. The bank believes that wir≈§Ωeless communication modules<φ are expected to land ±∞in various iot scenarios.
3. Look for the expertise in th®↔₩e wireless communication modul≥÷e industry
In the wireless communication mo≠€dule industry chain, the upstrea☆ &m chip market is dominated by oversea↔↑♣"s manufacturers. The localizatio γn rate of baseband chips, memory∏£ chips and RF chips with higher gross p×↕¥rofit rate is still at a γ★low level, and the p ¶articipation of specia Ω φlized and special enterprise≠★γs is low. The localizatλ£☆ion rate of communication module isδ'σ≠ at a high level, and the partici↓∑pation of specialized and special new e¶&↑₹nterprises is high.
Take cellular communication module as ≠♦✔an example. In the first qua¶βrter of 2022, there were six Cβ≥γ≈hinese companies in the top 10 global®•≈§ market share, and four of<< them were specialized and speci↔≈≠al start-ups.
The gross profit rate of ove✘☆★rseas manufacturers of commu★®♥nication modules is about 30-45%, and ™σ×the gross profit rate of Chinese manu✘×✔facturers' overseas busines✔÷♥s is about 20-35%. However, due t±≈ >o the high labor cost, high e™< xpense and small market share of overse δ" as manufacturers, the ne©∑'t profit rate of domestic manufacturλ§∏ers is still higher than that of oveσ§₽rseas manufacturers in the c ↑&₽ase of low gross profit rate.
The bank believes that benefiting from®&π the rapid expansion of ×↔απthe Internet of Things, th £₽e wireless communication module ♦α'×industry is in a fast growth chan✘λ∏nel, and the innovation vitality of sm®"σ¥all and medium-sized enterprises p×"&romotes the rapid devel↕★®↕opment of the industry. The d "∞→ownstream demand of the wireless βπcommunication module industry β★± is fragmented, and custom↕∏δized requirements exist for wi≈βreless communication modules in the seg♥ππmented fields. Small and me∞•σdium-sized enterprise≥££s can focus on the segmented ®≥fields to cultivate comp ¥©δetitive advantages and promote ≤the high-quality development of the inλ↕€←dustry. It is hoped t ★₽♣hat in the future, more ★σenterprises will take the road of sp¶€™αecialization, refinement andΩδ innovation, break the > $technology monopoly,✔ open up the industrial chain and suppεly chain of wireless communication ®↑modules, deepen domest☆σic substitution and promote industrial ₩ ≤€upgrading.
