In the global 5G industry chain layout, what position does China occupy?
| With the United States, China, Italy and other countries launching 5G commercial services, the global 5G industry chain layout has entered the sprint stage. China is in a leading position in 5G development, especially in base station construction, but it lags behind in 5G semiconductor materials, resulting in a serious bottleneck in upstream raw materials. 5G is a new generation of basic productivity that opens a new era of industrial digitalization and the Internet of Things. With the continuous improvement of global electronic technology, the boom in emerging applications such as artificial intelligence, big data, and the Internet of Things continues to heat up. Driven by the dual benefits of global consumption upgrades and industrial transformation, global 5G communications will enter the substantive commercial stage in the second half of 2019, gradually penetrate into various industries, and form a ubiquitous network of "Internet of Everything". At present, the 5G industry chain layout of major countries in the world has also entered the sprint stage. 5G communication is a communication technology that relies on semiconductor materials and devices to achieve long-distance transmission, reception and transmission, and processing of wireless electromagnetic waves. Compared with traditional 4G and other communication technologies, 5G needs to meet the three basic performance requirements of full spectrum access, high frequency band and even millimeter wave transmission, and high spectrum efficiency. Therefore, the performance requirements for devices and key semiconductor raw materials are also prompted accordingly. The global layout and construction of 5G devices mainly revolve around three areas: terminals, base stations, and transmission. The layout of 5G key semiconductor raw materials mainly revolves around wafer materials, silicon-based semiconductor materials, and compound semiconductor materials. 1. Global 5G Industry Distribution (I) Global layout of 5G key devices 1. Terminal RF front-end module is a key device for 5G terminals and is also the device with the highest import dependence in my country. Among them, amplifiers and filters account for 95% of the RF front-end, which is a key strategic area for countries to lay out the 5G industry chain. According to Mobile Experts' forecast, the global RF filter market size is expected to reach US$13 billion by 2020, with a compound annual growth rate of 21.06%. At present, the global market is dominated and monopolized by Japanese and American manufacturers, and the technical barriers are difficult to break. Broadcom and Qorvo, two American manufacturers, account for more than 90% of the market share. Filters can filter out specific frequency points or filter out frequencies outside the frequency points. Among them, millimeter wave MEMS filters and FBAR filters can match the high-frequency transmission performance of 5G and are the strategic focus of various countries. The amplifier of 5G terminal can amplify electromagnetic waves of more frequency bands (full spectrum communication) to higher frequency bands (medium and high frequency and millimeter wave technology), while meeting the requirements of smaller size (high integration). The design and manufacturing plants of GaAs compound semiconductor amplifiers in the world are monopolized by three manufacturers in the United States: Skyworks, Qorvo and Avago. Among them, Avago is Win Semiconductors in Taiwan, my country, and Skyworks' foundry manufacturers are Macronix Technology in mainland China and Win Semiconductors in Taiwan. According to Yole's report, the global RFPA market size is expected to reach US$2.5 billion by 2020. GaAs RF power amplifiers are the strategic focus of the global 5G RF module layout because of their high operating frequency and operating voltage, and can solve the inherent defects of CMOS products such as low breakdown voltage, poor substrate insulation, and high high-frequency loss. 2. Base station 5G base stations include large base stations, macro base stations, and small base stations. Since most of the global 5G spectrum planning is for mid-band and high-band frequencies, ultra-dense networking consisting of small micro base stations and Massive MIMO antennas is the key to 5G base station layout. At present, the global deployment of 5G base stations is mainly carried out in Europe, the United States, Japan, South Korea and China. In February 2010, Deutsche Telekom and Huawei successfully completed the world's first 5G high-order millimeter wave 73GHz (E-band) multi-cell network verification. In March 2010, AT&T Telecom of the United States deployed 60,000 5G macro stations and 5G small base stations using white box equipment, and will launch 5G communication services in more than a dozen cities in the United States before the end of 2010. Japan's Softbank operator officially launched the 5G Project in 2016 and is the world's first operator to officially put Massive MIMO technology into commercial use. In September 2017, South Korea's LG U+ and Huawei successfully completed the first phase of 5G dense urban field testing in Seoul, covering the coverage and capacity testing of millimeter wave 28GHz. 3. Optical communication The optical communication industry can be roughly divided into two branch industrial chains: optical module industry chain and optical fiber cable industry chain. The optical module is responsible for realizing photoelectric conversion, and the optical fiber is responsible for transmitting optical signals. The global optical fiber preform is mainly monopolized by Japanese, American and German companies. It is predicted that the future demand for 5G optical fiber will reach 16 times the demand for 4G optical fiber without considering optical fiber multiplexing. According to relevant research institutions, the demand for optical fiber in 2018-2020 will be 380 million core kilometers, 420 million core kilometers and 480 million core kilometers, respectively, with growth rates of 28.4%, 10.5% and 14.3%, respectively. (II) Global layout of 5G semiconductor materials 1. Silicon-based semiconductor materials The silicon-based semiconductor market is monopolized by technological powers such as the United States, Japan and Europe. The United States is the country with the most complete semiconductor industry chain in the world, with more than 90 local semiconductor listed companies covering the entire industry chain of equipment, materials, design, manufacturing, and packaging and testing; in the top 20 semiconductor companies in the world, the United States has 8 companies; in 2010, the global semiconductor annual sales were about US$450 billion, and the United States accounted for about 46%. In the field of silicon wafers, more than half of the world's semiconductor silicon material production capacity is concentrated in Japan. Silicon-based semiconductors can meet the requirements of most power and frequency devices due to their moderate bandgap and good electron mobility. More than 90% of the world's semiconductor devices are made of silicon-based materials. 2. Compound-based semiconductor materials The technology and market of GaAs materials are monopolized by Japan and the United States. In terms of substrate preparation and epitaxial wafers, Japan's Sumitomo Electric, Freiberger, Hitachi Cable, and ATX occupy more than 90% of the international market for 6-inch substrates. In terms of manufacturing foundry, American Crystal Technology, Japan's Sumitomo Electric, and Germany's Freiberg Compound Materials occupy more than 95% of the market. The technology and market of GaN materials are monopolized by the United States, Japan, Europe and other countries. The hydride gas deposition method used by Japan's Sumitomo Electric and Mitsubishi Chemical is currently the most mainstream method. Among them, Japan's Sumitomo Electric is the world's largest GaN wafer manufacturer, occupying more than 90% of the market share. According to Yole, with the advent of the 5G market, the market demand for GaAs, GaN and SiC devices has increased, and the market size is expected to reach US$13 billion, US$600 million and US$550 million respectively by 2021. Compound-based semiconductor materials can achieve 5G communication requirements such as high spectral efficiency, large frequency wave processing, and low latency response that silicon-based materials cannot meet well, and are new semiconductor materials that "surpass Moore's Law". 2. Summary of the development of my country's 5G industry (I) The industrial chain is "sparse but not dense", and the upstream raw materials are seriously "stuck in the neck". my country's 5G industrial chain has not formed a complete chain from design to manufacturing to packaging and testing. The production capacity is mainly concentrated in the low-end and medium-end fields with low technical levels and low industrial added value. The industrial chain of medium and high-end raw materials is missing many links, and the "stuck in the neck" phenomenon is serious. In wafer production, the electronic grade high-purity silicon used in chips with a purity of 11 nines can only be mass-produced by Xinhua Company in Jiangsu, with an annual output of 5,000 tons, but the domestic annual import volume is about 150,000 tons. In chip design and manufacturing, only Huawei HiSilicon has achieved mass production of mobile phone chips, and its downstream customers are mainly domestic mobile phone manufacturers; although SMIC is the largest foundry in China, its 28nm and 14nm processes are not well recognized in the market and have not yet achieved profitability. The total output value of my country's electronic information industry reached 18.5 trillion yuan in 2017, but such a large increase in domestic demand has not led to the complete chain of the semiconductor industry chain, and upstream and downstream enterprises in the industry chain have not achieved reasonable localization and scale. (II) Products are "few but not strong", and downstream components are highly dependent on imports. my country's 5G-related products have few high-end varieties and low-end technology levels, which makes it difficult to adapt to the requirements of information technology gradient transfer and rapid development. Most downstream components are still mainly imported. Among tens of thousands of integrated circuit materials, the proportion of products that my country can independently produce on a large scale is less than 1%, and most of them are low-tech products. 8-inch and 12-inch large-size silicon wafers are the basic raw materials of the semiconductor industry, but my country's external dependence is 86% and 100% respectively. The vast majority of integrated circuit materials are still in the hands of foreign companies. The top four silicon wafer manufacturers have a market share of 85%, and the top five photoresist manufacturers have a market share of 88%. Among them, only 27% are from domestic suppliers, and 23% are absolutely monopolized by foreign countries. According to the "White Paper on the Development of China's 5G Industry and Applications in 2010" by CCID Consulting, it is estimated that the overall market size of my country's 5G industry will reach 1.15 trillion yuan by 2026. The existing domestic production capacity, especially high-end production capacity, cannot meet such a large-scale demand. The market gap can only rely on imports. my country is a technologically weak country in the 5G semiconductor material industry, but it will become a major consumer of 5G semiconductor materials. (III) The innovation chain and industrial chain are "unsmooth", and the industrialization process is slow. The application of semiconductor materials is a systematic work, which requires production equipment, manufacturing processes, related material production enterprises, and downstream application enterprises to cooperate with each other, and provide targeted and direct technical guidance and product consultants for enterprises in different links. my country's upstream and downstream enterprises and even research institutions are in the initial stage, with little accumulation of relevant technologies and industries. Therefore, the key parameters such as the research and development results of research institutions, the market demand of downstream application enterprises, and the product performance of upstream production enterprises are not effectively integrated, linked, and coordinated, resulting in a serious phenomenon of "technical islands" in my country's semiconductor industry chain. The innovation chain of research and development institutions is out of touch with the industrial chain, and they cannot deeply guide production enterprises in various links of the industrial chain, and the research and development results cannot be systematically applied and promoted. The multiple deployment and scattered investment of innovation resources lead to repeated investment and insufficient utilization of production factors, and serious waste of resources. Upstream production enterprises cannot grasp the downstream market demand well, and the production layout cannot adapt to the market product demand for rapid iteration and update. The mobilization of various upstream and downstream resources in the entire industrial chain is insufficient. As a result, product performance is backward, production capacity is seriously wasted, service awareness is insufficient, and fixed investment planning is unreasonable. Downstream application enterprises are unable to provide high-quality products due to insufficient support from upstream enterprises for their high-end raw material products, resulting in customers giving up purchasing domestic products due to lack of confidence in domestic products and high verification costs. The sluggish sales of domestic products will further delay the renewal and iteration of my country's industrial chain, further slow down the industrialization process of innovative products, and aggravate the repeated waste of low-end and medium-end production capacity. III. Policy Recommendations (I) Practice "materials first" and build a benign industry breeding environment First, practice the "materials first" strategy and improve the construction of innovation platforms. Relying on the existing production and application demonstration platform, strengthen the coordinated connection between basic research, application link research and industrialization, concentrate superior resources to promote the research and development and industrialization of substrate materials, silicon-based semiconductor materials, and compound semiconductor materials, build a complete innovation chain, and form a development environment for collaborative innovation in the upper, middle and lower reaches. Secondly, scientifically make industrial layout and avoid duplication. Encourage local governments, research institutions, and related enterprises to reasonably allocate industrial chains, innovation chains, and resource links around leading enterprises such as Huawei and ZTE, relying on regional advantages, and reasonably plan the capacity layout of industrial chain links such as wafer production, chip design, chip manufacturing, and chip packaging and testing, fully tap the driving force of leading enterprises, avoid mismatched single-line development between various links, and build an industrial chain environment that promotes coordinated development. Third, strengthen talent training and innovation team building. Relying on key enterprises, alliances, colleges and universities, vocational schools, public training bases and public service platforms, we will train a group of engineering and engineering graduate students, and cultivate a group of industrial workers, technical backbones and innovation teams through joint research and joint implementation of major projects. (II) Patent navigation innovation to accelerate the process of independence First, establish a working mechanism for patent navigation of 5G semiconductor materials to provide directional support for R&D innovation. Strengthen patent layout, carry out intellectual property risk assessment and early warning, and regularly provide early warning research results to relevant governments, institutions and enterprises to assist them in resolving industrial development risks. Second, with the help of financial support, break through the constraints of key processes and special equipment. Strengthen the information connection between government, banks and enterprises, focus on the development of core production equipment such as lithography machines and ion implanters, improve the consistency, reliability, life and precision of production equipment, narrow the quality gap with foreign companies, and weaken the constraints of foreign companies on my country's semiconductor industry. Third, accelerate the initial market cultivation of key new materials. Improve the construction of supply, production and demand connection platforms, reasonably allocate industrial chains, innovation chains, and resource chains, and avoid single-line development with mismatched links. Improve the application demonstration and promotion mechanism of key projects, rely on the insurance compensation mechanism for the first batch of new materials applications and the application demonstration guidance catalogue, accelerate the transformation process of new materials from laboratories to enterprises, and release market demand. Use market applications to force autonomy, improve the construction of service platforms for market demand and end customers, and accelerate the speed of R&D iteration for market demand, thereby promoting the autonomy process. (III) Implement import and export early warning and build a benign external exchange platform First, formulate statistical methods for new material products and enterprises and statistical catalogues of import and export commodities, organize statistical monitoring and early warning, release statistical information in a timely manner, and guide the industry to develop in a standardized and orderly manner. Strengthen early warning monitoring of the development status of the new materials industry, reasonably adjust import and export policies, and safeguard the interests of industrial development. Second, optimize government public services, strengthen international new materials innovation cooperation and information guidance such as policies and regulations, encourage new materials enterprises to coordinate the use of two markets and two resources, and enhance their position in the global value chain. Support enterprises to set up new materials enterprises and R&D institutions abroad, achieve technology product upgrades and international operations through overseas mergers and acquisitions, and accelerate integration into the global new materials market and innovation network. Third, make full use of the existing bilateral and multilateral cooperation mechanisms, broaden the channels for international cooperation in new materials, and promote exchanges and cooperation in talent teams, technology capital, standards and patents, and management experience in the new materials industry in combination with the construction of the Belt and Road Initiative. Support domestic enterprises, colleges and universities, and research institutes to participate in large-scale international new materials science and technology cooperation programs, and encourage foreign enterprises and research institutions to set up new materials research and development centers and production bases in my country. |
Recommend
Foreign media: Germany may completely shut down 3G network in 2022
Deutsche Telekom has become the third major opera...
With the accelerated development of 5G technology, what challenges does the data center face?
Memory security is not a new concept, but the sur...
CloudCone: $17.99/year KVM-1GB/50GB/1TB/Los Angeles MC Data Center
CloudCone sent an email at the beginning of the m...
The first interpretation in China: the potential game-changer behind IIoT
If the Industrial Internet is to be implemented, ...
Let’s talk about the truth about 5G cars
[[259646]] Under the global consensus that "...
10 things to know about LoRaWAN and NB-IoT
The Internet of Things has a variety of connectio...
How can IT operation and maintenance service providers keep WannaCry out? Hengyuan Zhicheng said that security needs to be prevented
[51CTO.com original article] It has been a week s...
How does your domain name become an IP address?
[[420883]] This article is reprinted from the WeC...
Microsoft: Azure Quantum quantum cloud platform is now open for public preview
Microsoft's Azure Quantum cloud platform uses...
Huawei's ecosystem is expected to prosper exponentially in response to demand
【51CTO.com original article】 As we all know, in t...
How 5G can drive a sustainable future
IBM Vice President Marisa Viveros said that whil...
Is 5G network harmful to the body? Scientific facts answer your questions
There are many rumors that 5G is harmful to the h...
Review of the optical fiber industry in 2016: The east wind overwhelms the west wind, and quantitative changes induce qualitative changes
[[181005]] For the optical fiber industry, 2016 i...
DesiVPS: 10Gbps bandwidth VPS starts at $17 per year, 1Gbps unlimited traffic VPS starts at $19 per year, San Jose data center
DesiVPS recently sent some promotional packages, ...
Understand the ins and outs of DNS in one article
[[333115]] 1. Background By the late 1970s, the A...