Semiconductors Market Brief - China - Monthly - April 2020 - May 2020 Hui He Principle Analyst, China Intelligent Service
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Semiconductors Market Brief - China - Monthly - April 2020 May 2020 Hui He Principle Analyst, China Intelligent Service askananalyst@omdia.com © 2020 Omdia Brought to you by Informa Tech
Semiconductors Market Brief - China - Monthly - April 2020| May 2020 Contents • Overall market dynamics 3 • Industry highlights 4 • Key findings: New infrastructure 6 • Appendix 8 Page 2 © 2020 Omdia
Semiconductors Market Brief - China - Monthly - April 2020| May 2020 Overall market dynamics • The Science and Technology Innovation (STIB) need to be reformed to lower registered capital and increase the rise and fall price limitation to 20%. These will stimulate more capital to flow into the STIB and help more semiconductor start-ups to finance directly from the open market. • Except for Huawei, other local OEMs have lowered their annual shipment forecast for 2020, especially shipment volume of mid- and high-end 5G smartphones. In 2020, Huawei expects that shipments of 5G smartphones will account for more than 50% of the total 5G smartphone shipments in the Chinese market. • BYD Microelectronics will be renamed as BYD Semiconductor and will be ready for an independent listing. BYD Microelectronics will become an integrated device manufacturer (IDM), focusing on power semiconductors, smart sensors, optical semiconductors, and smart control integrated circuit (IC) products. • Huawei and ZTE won the bid to become the main equipment suppliers of China Mobile’s 5G base station—Huawei’s share is more than 50%. Although the chip demand for smartphones is down this year, TSMC’s manufacturing of base station communication chip continues to increase. • YMTC launched its 128-layer (128L) quad-level cell (QLC) sample and also released its 128L 512gb triple-level cell (TLC)—3-bit/cell—flash chip. Mass production is targeted for the end of 2020. Omdia puts YMTC’s wafer capacity share of the global supply at roughly 5.75% at the end of 2021; maximum wafer capacity is 100,000 per month. Page 3 © 2020 Omdia
Semiconductors Market Brief - China - Monthly - April 2020| May 2020
Industry highlights
• In 1Q2020, China’s GDP was -6.8%. However, China’s economy has fully recovered from the impact of the coronavirus disease 2019 (COVID-19) since April 2020.
– China's economy was hit hard in the first quarter, especially the electronics manufacturing services (EMS) industry, which has a relatively low rate of return to work, such as
Foxconn. However, the rate of return has gradually increased since March 2020.
– The semiconductor industry’s bottleneck is package and testing; more than 90% of capacity has been restored.
• Huawei increased its 5G smartphone orders in the second quarter of 2020 (2Q20), driven by clear inventory stocking in 1Q20 and strong promotions of 5G.
– After adjustments and cuts in orders in the first quarter, Huawei increased its order volume of 5G mobile phones in the second quarter by 10 million in April. Huawei mainly focused
on the mid- to low-end, which uses its Kirin 985 (7nm+ process with extreme ultraviolet lithography or EUV) and 820 (7nm) chips.
– Because of China’s strong promotion policy for 5G deployment, the total shipment of 5G smartphones in 2020 will be the same as the previous forecast, but the price competition
of smartphones has rapidly dropped to US$300–400.
• Huawei and ZTE won the bid to become the main equipment suppliers of China Mobile’s 5G base station.
– Huawei’s share is more than 50%. Although chip demand for smartphones is down this year, TSMC’s manufacturing of base station communication chip continues to increase.
– ASE will be the major package and testing supplier for both Huawei’s and ZTE’s 5G base station chips.
– The bidding results of the main equipment of China Mobile’s 5G base station (total of 250,000 units) are Huawei with 57.2% and ZTE with 28.71%.
– The major semiconductor components of the 5G base station include application-specific integrated circuits (ASICs), a baseband, radio frequency (RF) power amplifier (PA), RF
surface acoustic wave (SAW), RF switch, field-programmable gate array (FPGA), power management integrated circuits (PMICs), optical components, and analog-to-digital/digital-
to-analog (AD/DA) converters.
Page 4 © 2020 OmdiaSemiconductors Market Brief - China - Monthly - April 2020| May 2020
Industry highlights (continued)
• National IC Investment Fund Phase II (please see the Appendix)
– China’s National IC Fund Phase, which was established in October 2019, was implemented in March 2020; it has amassed ¥200 billion in financing.
Page 5 © 2020 OmdiaSemiconductors Market Brief - China - Monthly - April 2020| May 2020
Key findings: New infrastructure (1/2)
China 5G base station deployment forecast, 2020–24 Major semiconductor components of a base station
1,200
Thousands of units
1,000 Chip classification Chip type
800
600
940 970 5G CU RF switch
400 810 900
200 550
120 RF frond end RF PA (GaN)
0
2019 2020 2021 2022 2023 2024
5G base station 5G DU RF SAW
Source: Omdia © 2020 Omdia
ASIC
• China’s three telecom operators—China Mobile, China
Base band processor
Unicom, and China Telecom—plan to establish 550,000 5G FPGA
base stations in 2020.
– They plan to establish more than 5 million 5G base stations Power management PMIC
by 2025. 5G AAU
• Localization in China: AD/DA
– RF PA (GaN): Dynax (IDM) San’an (OEM) Analog and optical
Optical chip
– ASIC: Huawei/Hisilicon, ZTE/ZTE-IC
– RF switch: Maxscend 5G base station Source: Omdia © 2020 Omdia
Page 6 © 2020 OmdiaSemiconductors Market Brief - China - Monthly - April 2020| May 2020
Key findings: New infrastructure (2/2)
New infrastructure
Intercity high-speed rail
UHV AI Industrial internet
Big datacenter and urban rail transit
5G infrastructure New EV charging pile
Source: Omdia © 2020 Omdia
Page 7 © 2020 OmdiaAppendix Page 8 © 2020 Omdia
Semiconductors Market Brief - China - Monthly - April 2020| May 2020
Appendix: China National IC Fund Phase II
China National IC Fund Phase II investment list
(millions of yuan)
Company name Investment date Amount (¥ millions) Major products
UNIS (Spreadtrum+RDA) March 17, 2020 ¥2,250 million System on a chip (SoC)and RF front-end (RFFE) in mobile devices,
the Internet of Things (IoT), connectivity, security, set-top boxes
(STBs)
Telink March 26, 2020 ¥27 million Bluetooth, Zigbee, low-power, wireless personal area networks
(LoWPANs), low-power 2.4Gb
Source: Omdia © 2020 Omdia
Page 9 © 2020 OmdiaSemiconductors Market Brief - China - Monthly - April 2020| May 2020 Appendix Further reading Mobile Phones & Electronics Market Tracker - China OEM Semiconductor Spend Tracker Application Market Forecast Tool AMFT - China Local Design IC Design Industry Market Tracker - China Author Hui He, Principle Analyst, China Intelligent Service askananalyst@omdia.com Omdia Consulting We hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, Omdia’s consulting team may be able to help you. For more information about Omdia’s consulting capabilities, please contact us directly at consulting@omdia.com. Citation Policy Request external citation and usage of Omdia research and data via citations@omdia.com. Page 10 © 2020 Omdia
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