I. 5G comprehensively drives industrial innovation

1.1 Technology upgrades in the past decade

We innovatively propose the innovation cycle model of the electronics industry: a complete industry innovation cycle can be divided into innovation period, penetration period and stability period.

1) Innovation period: For the initial stage of the industry cycle, the industry driver is the ASP upgrade caused by new product development. Due to the low penetration rate in the short term, the company's performance is not obvious at this stage, but the industry valuation has rebounded significantly, and the R&D-driven enterprises are the first to benefit.

2) Infiltration period: With the maturity of technology and cost reduction, the industrialization level of innovative products is gradually improved. Although the new product ASP declines, but under the impetus of the rapid increase of new product penetration rate and shortened replacement period, the enterprise still reflects its operation. In order to increase the volume and price, the performance is released rapidly, and the valuation is further advanced. The enterprising enterprises with strong expansion ability are expected to perform best.

3) Stabilization period: The overall technological progress of the industry slowed down, the concentration began to increase, the management of the supply chain was strengthened by customers, and the enterprises with strong cost control/fine management ability gained a larger share. At the same time, due to the decline of the industry growth rate, the overall estimate The value is shifted down.

Historically, each round of the electronics industry innovation cycle is mainly driven by the intergenerational upgrade of communications, which lasted 5-8 years. We believe that 2017-18 is a stable maturity period in the 4G era. In 2019, operators will accelerate their investment in 5G network construction. Electronic terminal products are also expected to usher in a new round of innovation cycle driven by operators and brand factories.

From the perspective of products and application scenarios, iPhone X leads innovation in materials, design and interaction (including high-frequency materials, 3D optics, etc.), which is essentially an early exploration of the 4G to 5G transition period. It is expected that in 2019, the Android camp will launch a variety of 5G mobile phones, which will become the starting point of 5G terminals, while Apple will launch the 5G version of the iPhone in 2020, and new terminals such as smart cars and AR glasses are expected to increase the volume, which will greatly increase the penetration rate of 5G terminals. . The accumulation of terminal ownership with innovative configuration will also enable new application scenarios such as AI and AR to have greater promotion possibilities. It is hoped that the mutual promotion and benign cycle between applications and hardware will be seen again.

1.2 5G commercial has entered the all-round sprint phase

1.2.1 5G standards, operators, chips, terminals progressed

In 2018, the 4G LTE network has entered the second half of the decade of deployment. With the construction of LTE-A and LTE-A Pro networks, the communication network has gradually transitioned from 4.5G to the Pre-5G era. The upgrade of the communication network will greatly enhance the user experience and expand the application scenario. According to Ericsson, global mobile data traffic is growing rapidly, with CAGR expected to exceed 40% from 2017 to 2022. The upgrade of the 5G network will greatly increase the network speed, thereby promoting the application of high-traffic video, VR/AR and other high-traffic requirements. In addition, 5G will extend the application landscape on the Internet of Things and mission-critical services.

5G network standards and specifications are gradually being completed, and pre-standard 5G commercial deployments will be launched earlier. The 5G standard is developed by the ITU, 3GPP and other communication industry organizations. At present, 3GPP has completed the 5G NR standard in advance, the ITU will submit the 5G proposal, and the IMT-2020 specification will be completed in 2020, and some operators can implement commercial deployment in 2019. Globally, the four major US operators have announced that they will provide 5G services between the end of 2018 and 2019. South Korea, Japan, and China will also deploy early 5G networks in 2019, while large-scale deployment of 5G networks will start in 2020. We believe that 5G commercialization will affect the electronics industry in stages. From the commercial stage, the 5G network standard is first, and the chip is followed by the terminal's R&D test. At this stage, operators, terminal manufacturers, and chip manufacturers have entered the prototype test intensive period, and 5G commercials have entered the all-round sprint phase.

Some 5G baseband chips have entered the shipping phase, and more basebands will be available in 2019. On October 17, 2018, Qualcomm released the first 5G baseband chip X50. The baseband uses a 28nm process with a peak of 5Gbps, supports millimeter wave and China's planned Sub-6GHz IF; it will also support the Snapdragon 835, 845 and 8150 flagship chips in a plug-in form. In addition to Apple and Huawei, 18 major Android phone manufacturers such as OPPO, vivo and Xiaomi are all involved in Qualcomm's 5G chip cooperation. In addition to Qualcomm, Intel, Samsung, Huawei, and MTK have also launched 5G baseband chips. In terms of shipment progress, Qualcomm X50 5G baseband has been shipped, Samsung Exynos 5100 baseband is scheduled to ship after the end of 2018, Huawei Balong 5000 baseband chip plans to ship in the first half of 2019, MTK Helio M70 baseband plan 2019 shipped in the first half, Intel The XMM 8160 baseband is scheduled to ship at the end of 2019. We believe that the major baseband manufacturers as the core suppliers of 5G terminal equipment are progressing smoothly, laying a good foundation for the terminal manufacturers' 5G commercial plans.

5G terminal commercial enters the sprint phase, and will be the first year of 5G mobile phone commercial use in 2019. According to the Ericsson 2018 report, 5G commercial development of terminals such as smartphones, routers, CPEs, and tablets will be promoted in stages. The earliest 5G commercial terminals were mainly fixed wireless devices (FWA) and data connection devices, including network devices such as CPE and routers. Such terminals will provide traffic entry for 5G networks and are expected to be available by the end of 2018. In terms of mobile phones, it is expected that the industry will launch 5G commercial machines supporting mid-range in the first half of 2019, and 5G commercial machines supporting millimeter-wave in mid- or late-half of 2019. In addition, 5G will provide new use cases for more industries. It is expected to be the first commercial support ultra-low latency 5G IoT module for industrial monitoring in 2020. In terms of network connection, the penetration rate of 5G commercial early stage is low, but with the cost of network and chip lower, and the price of terminal equipment is lower, it is expected that 5G terminal will usher in rapid growth in 2020-2023, and it is expected to be global in 2023. There will be 1 billion terminal devices supporting 5G enhanced mobile broadband.

At present, major terminal manufacturers are actively deploying 5G mobile phones, and mainstream Android manufacturers are planning to launch 5G pre-commercial mobile phones in 2019. For example, OPPO, vivo, and Xiaomi have announced functional tests such as 5G signaling links and data link link tests. Samsung and Huawei also plan to launch 5G commercial phones in 2019. In addition, Apple and Intel and other baseband chip manufacturers in the 5G cooperation, plans to launch the 5G version of the iPhone in 2020.

1.2.2 5G commercial will shorten the replacement cycle, and it is expected to start a new wave of change in 2020-2023

Looking back at the history of communication terminal upgrades in the past, we found that the 2-5 years after the first-generation communication terminal was put into use for the first time was its fastest growing period. In 2008, 3G mobile phones were first commercialized, and mobile terminals entered the Internet era. Words, pictures and basic Internet services have become consumers' hotspots. In the subsequent period of 2009-2012, the penetration rate of 3G mobile phones increased rapidly, and the penetration rate reached 73.9% in 2012. In 2010, 4G mobile phones were first commercialized, and mobile terminals entered the Internet+ era. Higher speed and ubiquitous network connections made video, Internet services and O2O a hot spot for consumers. In 2011-2014, the penetration rate of 4G mobile phones increased rapidly, and the penetration rate reached 37.9% in 2014. We believe that the essence of the change is the improvement of the network application ecosystem and the improvement of the service experience. The driving force behind this is the synergy between operators, equipment vendors, terminal vendors, chip vendors and supporting manufacturers.

In the post 4G era, the replacement cycle is extended, and 5G will shorten the replacement cycle. According to IDC statistics, since 2014, the change cycle has been extended. The internal reason is the improvement of mobile phone quality and life extension. The external reason is that the application innovation and service innovation that 4G can carry are gradually saturated, and the non-revolutionary local innovation is difficult to stimulate users. Change the machine needs. With the acceleration of 5G commercialization, the rise of innovative applications and innovation ecosystems such as HD video, VR/AR, and 5G Internet of Things, application and service experience innovation will greatly enhance the user experience. At present, some Android manufacturers have clearly stated that they will commercialize 5G mobile phones for the first time in 2019. We believe that 2019 will be the first year of 5G mobile phone innovation, and 5G+AI+ folding screen innovation will ignite a new round of replacement needs. Since the technology and services are still in the groping phase due to the 5G pre-commercial phase in 2019, 5G handset shipments are limited. We expect a new wave of exchanges to start in 2020-2023.

1.3 5G application scenarios are more abundant, driving segment market growth

1.3.1 5G network/application system and its driving to downstream industries

5G applications revolve around the four-tier system, from terminal intelligence to network efficiency to information and data, and finally closely integrate with traditional industries, foster 5G-based emerging information products and services, and reshape the industry development model. The 5G communication module enables traditional terminals to have powerful sensing, feedback, and control capabilities to enable intelligent interaction on emerging terminals. At the network level, 5G high-capacity, large-connection, low-latency features can be applied in eMBB, uRLLC, mMTC and other scenarios to achieve end-to-end massive information transmission. The powerful data transmission capability combines 5G with cutting-edge science such as big data and cloud computing to further unlock the potential of artificial intelligence in various industries, and these calculations and analysis provide a platform-based solution for 5G applications. In the end, the innovation of terminals, networks and data will drive the development of traditional fields into intelligent data, and realize the interconnection of all things.

5G can realize three types of services: enhanced mobile broadband, massive Internet of Things, and mission-critical services, which will greatly expand the application scenarios of wireless communication. (1) Enhanced Mobile Broadband (eMBB) based on the 5G IF and millimeter wave bands will enable a wider and faster wireless connection. (2) Massive Internet of Things (MIoT) based on the 5G Sub-1 GHz band, with early IoT and machine-to-machine communication technologies, will connect tens of billions of terminals and trillions of dollars at low power and low cost Provide wireless support. (3) Mission-critical services (MCS) based on the 5G millimeter-wave band will support high-security, high-availability applications with highly reliable, ultra-low latency network connections. According to IHS Markit, the potential sales generated by 5G in the world will reach 12.3 trillion US dollars in 2035, accounting for 4.6% of the total global output in 2035, and will span multiple industrial sectors.

The 5G ecosystem is an organic whole, but the 5G frequency bands have different application scenarios and electronic system design. The 5G Sub-1GHz spectrum is narrow, which is better for IoT applications with low power consumption, low cost, and slow network speed. 5G Sub-6 GHz is an extension of the current LTE network to the 5G network. It is suitable for high-definition video, VR/AR and other applications that require higher network speed. 5G millimeter wave is usually used for short-distance high-speed transmission, and is suitable for large-bandwidth and low-latency application scenarios such as vehicle networking, autonomous driving, and medical robots. The 5G ecosystem is based on the parallel development of 5G Internet of Things, Sub-6GHz, and millimeter wave technology. At the same time, the connection between the three major frequency bands integrates 5G into an organic whole. In addition, for terminal radio systems such as mobile phones, the 5G IoT and 5G Sub-6GHz electronic packages maintain the structural modules of the 3G/4G era, which are divided into four system-level packages and modules: antenna, RF front-end, transceiver and baseband. group. For the 5G millimeter wave band, the antenna, RF front end and transceiver will be integrated into a single system-in-package.

5G will become the long-term growth engine of the electronics industry, optimistic about automotive electronics, VR / AR, Internet of Things and other market segments. According to IC Insights data, the global electronic components output value will reach 1.68 trillion US dollars in 2019, an increase of 3.5%. In terms of the application market, automotive electronics, communications electronics, and industrial/medical electronics will be the fastest growing application markets in 2019 and the next three years. In terms of 5G segmentation industry, smartphones will be the 5G preferred platform with traffic entry status. In addition, new applications such as VR/AR, car networking, and autopilot will also benefit from the maturity of 5G technology. We believe that automotive electronics, VR/AR, and IoT electronics will be 5G priority beneficiaries, and it is expected to drive upstream related electronic components market.

1.3.2 5G accelerates automotive electronics, is expected to improve automotive electronics and automotive semiconductor ASP

The automotive industry is in the early stages of intelligent development, and its ultimate goal is to achieve fully automated, networked smart cars. The high-speed and low-latency 5G will accelerate the trend of car networking, smart driving, driverless, car entertainment, electric vehicles, and intelligently improve the degree of electronic electronics and automotive electronics ASP. We believe that the benefits of 5G automotive electronics are comprehensive, including Wi-Fi, Bluetooth, cellular modules, millimeter wave radar, millimeter wave antennas, wireless charging and other RF electronics, as well as displays, cameras, acoustics, sensors, controllers, power Devices, passive components, PCBs, etc.

根据IHS数据，2016-2022年汽车电子ASP保持5.6%年均增长，2022年汽车电子ASP达1500美元，2022年全球汽车电子价值达1600亿美元。具体到汽车半导体，2016-2022年汽车半导体市场保持7.1%年均增长，2022年市场空间达580亿美元，占汽车电子的36%。根据McKinsey数据，典型中等汽车的汽车半导体ASP为350美元，对于混合动力/豪华汽车其汽车半导体ASP可高达600-1000美元。我们预计，随着电动汽车产量增长和自动驾驶逐渐成熟，2020年后汽车电子/汽车半导体市场将加速增长，看好MCU、模拟IC等细分行业。

1.3.3 Accelerate VR/AR applications and drive the growth of downstream electronic components

VR/AR enhances the user experience through virtual reality, and has great prospects in games, video, education, display, marketing, mapping, navigation and other applications. The combination of VR/AR and low-latency and high-speed 5G networks can further expand its interactivity and immersive experience, and is expected to be widely used by general-purpose applications in various industries. According to ABI Research, VR will continue to be popular in the next few years. By 2022, VR users will reach 256 million, and the VR market will exceed 60 billion US dollars. In addition, VR/AR will continue to merge in the future. With the rise of the VR/AR market, the demand for electronic components will also be released, and the demand for processors, memories, PCBs, cameras, OLEDs, acoustic devices, optical devices, sensors, etc. will grow. For example, for VR display, AM OLED is accelerating to replace traditional LCD screen with its unique advantages, and VR/AR OLED demand will achieve an average annual compound growth of 112% in 2017-2021. For sensors for VR/AR and AI applications, the market space in 2017 is approximately US$97 billion. The market space in 2017-2022 will achieve an average annual compound growth of 11%. In 2022, the sensor market space for VR/AR and AI applications will reach 160 billion US dollars.

1.3.4 5G IoT will drive long-term growth in the electronics/semiconductor industry

The 5G IoT can better meet the low-power, low-cost, and slow Internet IoT applications, and will benefit from the 5GSub-1GHz network connection. 5G IoT is accelerating deployment on a global scale, and more than 60 Cat-M1 and NB-IoT standard cellular IoTs are commercially deployed worldwide. For example, in China, NB-IoT technology has been deployed nationwide and supports use cases such as smart cities and smart agriculture. We believe that the large-scale deployment of these two IoT technologies and the resulting high-volume chipsets are expected to reduce chipset prices and further accelerate cellular IoT connectivity. As the 5GIoT standard gradually falls, the chip is gradually improved, the cost is continuously reduced, and the number of cellular IoT connections is expected to usher in an explosive growth in 2019-2023. According to Ericsson's forecast, the number of cellular IoT connections in 2017 will be 700 million, and in 2023 it is expected to reach 3.5 billion, with a compound annual growth rate of 30%.

As a semiconductor sub-sector, IoT devices have typical economies of scale. We believe that the improvement of technology maturity and the improvement of application ecology will significantly reduce the cost of IoT devices and accelerate the transition of the Internet of Things from the current large and scattered application ecosystem to economies of scale. We believe that 5G IoT will drive the long-term growth of the semiconductor industry, mainly benefiting from connected devices (wireless and wired communication devices), sensing devices and processors (AP, MCU, DSP, etc.). According to IHS data, shipments of IoT semiconductor devices will increase from 32.4 billion in 2016 to 74.1 billion in 2025, with an average annual compound growth of 9.6%. In terms of market value, the IoT semiconductor device market will grow from $94 billion in 2016 to $172.8 billion in 2025.

Second, 5G innovation drives the full benefits of components

2.1 LCP/MPI antenna: benefiting from 5G high-frequency high-speed and miniaturization trend

2.1.1 Apple leads the LCP/MPI antenna wave

In 2017, Apple first used the LCP antenna in the iPhone X/8/8Plus to open the commercial boom of LCP in electronic devices. The traditional antenna soft board uses a PI substrate, while the iPhone X uses an LCP substrate (liquid crystal polymer) antenna to improve the high-frequency and high-speed performance of the antenna and reduce space occupation. According to the industry dismantling, the iPhone X uses two LCP antennas, and the iPhone 8/8 Plus uses a partial LCP-based antenna. In the new 2018, the iPhone XS/XS Max uses three LCP antennas, and the iPhone XR uses two LCP antennas, and the penetration rate continues to increase. In terms of value, the iPhone X single-root LCP antenna is about 4-5 dollars, 2 pieces are 8-10 dollars in total; the iPhone 7 PI antenna is worth about 0.4 US dollars, and the value of the single machine from the PI antenna to the LCP antenna is about 20 times higher. In addition, the iPhone X uses LCP materials in trunks and 3D Sensing camera modules to improve high-frequency, high-speed performance and module miniaturization of signal transmission. We believe that the first use of LCP soft board for iPhone X is significant, which can be interpreted as Apple's 5G layout and verification. For the electronics industry, LCP soft board is becoming a new wave of soft board technology under the trend of high frequency and high speed.

2.1.2 Under the trend of high frequency and high speed, LCP/MPI will replace traditional PI soft board/module

With the rise of high-frequency high-speed applications, LCP/MPI will replace PI as a new soft board process. Under the 5G trend, communication frequencies and network bandwidth are getting higher and higher. In order to adapt to the high-frequency and high-speed trend of networks and terminals, traditional PI soft boards are encountering performance bottlenecks as antennas and transmission lines of terminal equipment. LCP-based LCP flexible boards can be used for high-frequency and high-speed data transmission as well as high-frequency packaging materials due to their advantages in transmission loss, bendability, dimensional stability, and hygroscopicity. An excellent alternative to traditional PI soft boards under high frequency and high speed trends. In addition, with the maturity of MPI (modified PI, an improved PI) technology, the overall performance of MPI is also close to LCP in the frequency range below 15 GHz.

LCP/MPI is expected to coexist in the 5G era, but LCP is the protagonist. With the maturity of MPI technology, MPI performance is comparable to LCP for 1-4 layers of simple soft boards operating at frequencies below 15 GHz. Therefore, due to supplier ecology, capacity, yield and cost considerations, we judge that in 2019, Apple may partially adopt MPI instead of LCP (new antenna modules may integrate more functions). Despite this, LCP is still the future trend, and LCP is a better choice for applications above 15 GHz or complex soft boards with more than 4 layers. We believe that MPI is a 5G Sub-6GHz transition technology and cannot completely replace LCP. LCP is the most important high-frequency high-speed soft board in 5G terminals. Its most important application will be millimeter-wave antenna module, industry leader Qualcomm. Murata is actively in the layout.

The LCP/MPI soft board replaces the PI soft board and coaxial cable for a higher degree of miniaturization. Under the trend of space compression, mobile phone manufacturers are increasingly demanding miniaturized antenna modules and connectors/wires. The LCP/MPI soft board has better flexibility than the PI soft board and can be freely designed in shape, so it can make full use of the narrow space in the mobile phone, and has better space utilization efficiency and bending reliability. Take the soft board cable across the battery as an example. The traditional soft board can't fit the battery surface well under the rebound effect, and Murata's MetroCirc (an LCP soft board) can perfectly fit the battery to save the cable, thus saving More space. In addition, for antenna transmission line applications, LCP flexible boards can further improve space efficiency compared to traditional coaxial cable solutions. The LCP flexible board has the same excellent transmission loss as coaxial cable and can accommodate several coaxial cables in a 0.2 mm 3-layer structure, replacing the thick coaxial cable and coaxial connector and reducing it by 65%. Thickness, with higher space efficiency.

LCP can realize flexible embedded circuit of RF circuit, which has higher value and is expected to be the best packaging solution for 5G RF circuit. The LCP package consists of two different melting point LCP materials, a high melting point temperature LCP (315oC) is used as the core layer, a low melting point temperature LCP (290oC) is used as the bonding layer, and passive devices and active devices are buried between the layers. And interconnected by metal vias to form a multilayer circuit structure. For example, Murata has developed the MetroP multilayer substrate product MetroCirc that integrates MLCC and RF front-end. We believe that LCP has undergone qualitative changes from soft board to packaged modules. Its product attributes have been extended from early antennas and transmission lines to flexible carrier boards with module packaging capabilities, and the added value of products will be greatly improved.

Under the trend of high-frequency high-speed and miniaturization, LCP/MPI will completely replace transmission lines. The LCP/MPI soft board has the same high-frequency performance as the transmission line, so it is expected to replace the antenna transmission line with better space efficiency. At present, Murata and Sumitomo Electric have launched LCP antennas with antenna transmission lines. Apple has also commercialized LCP antennas with antenna transmission lines in the iPhone X/XS. We believe that the replacement of antenna transmission lines by LCP soft boards is a future trend under the demand of miniaturization; under the demonstration effect of Apple, the Android camp is also expected to adopt LCP antennas with transmission line function.

In addition to the antenna transmission line, the LCP/MPI soft board will replace the high-speed interface transmission line. As end-applications and network speeds continue to increase, data transfer rates between devices have increased from a few hundred Mbps to a few Gbps. Normally, the motherboard and high-speed interface are connected by a bulky coaxial cable. As the data rate of the new standard becomes higher and higher, transmission losses become more and more serious. In order to further increase the transmission speed of the data interface and reduce the space occupation, the LCP/MPI soft board with good high frequency characteristics can be used instead of the traditional interface cable. We believe that in the trend of high speed data interface, the replacement requirements of LCP/MPI soft boards for terminal antennas, high-speed interface transmission lines and internal transmission lines of servers are increasing, which constitutes an alternative logic to traditional transmission lines.

The LCP package is expected to become the ultimate solution for antenna and RF front-end integration. After the arrival of 5G, the incremental logic of the antenna market will shift from the price of the antenna soft board to the value of the high-density LCP package. At this stage, mobile phone antennas mainly use soft board technology and gradually infiltrate from 2x2 MIMO to 4x4 MIMO. After the arrival of 5G, the terminal will adopt a larger number of array antenna frames with smaller area, and the antenna technology is expected to turn to the LCP package. We believe that from the perspective of RF systems, the increase in the antenna market from 2018 to 2020 will come from the price and price of the antenna soft board. After 2020, the 5G RF will undergo a qualitative change, and the antenna and RF front end are expected to be integrated into the package module. At that time, its value may be determined by the number and packing density of 5G RF modules.

2.1.3 Short-term demand is determined, long-term growth is worry-free, LCP/MPI market enters rapid growth period

We see that the application of the LCP/MPI soft board is not limited to the terminal antenna and the 3D Sensing camera soft board, which is essentially a miniaturized high-frequency high-speed soft board. From the logic of miniaturized high-frequency high-speed soft boards, LCP/MPI soft board applications include antennas, camera soft boards, high-frequency connectors/wires, high-speed transmission lines, display panel soft boards, SSD soft boards, COF boards, Communication cables, millimeter wave radars, high-frequency circuit boards, multi-layer boards, IC packages, u-BGAs, speaker boards and other sub-areas will benefit from 5G frequency and bandwidth enhancements and large-capacity communication requirements such as VR/AR. We believe that the LCP/MPI soft board will benefit from the iPhone LCP antenna penetration increase in the short term; from 218 to 2020, benefit from MIMO to increase the incremental demand for antennas, and the Android camp's replacement demand for LCP/MPI antennas and high-speed transmission lines; 2020 After that, LCP/MPI is expected to become the mainstream, benefiting from the demand for miniaturized high-frequency high-speed flexible boards and LCP package modules in the 5G market.

The iPhone LCP/MPI antenna market broke out first. IDC predicts that smartphone shipments will increase from 1.517 billion to 1.743 billion in 2017-2021. We estimate that the penetration rate of mobile phone LCP/MPI antenna will increase from 6% to 25% in 2017-2021. The market space is expected to increase from 370 million US dollars to 2.92 billion US dollars, with an average annual compound growth of 57%. In addition, 2018 models of iPhone XS/XS Max/XR use 3/3/2 LCP antennas, and penetration continues to increase. In terms of value, the iPhone XS/XS Max/XR LCP antenna is $2.5-4.5 per unit, and the stand-alone value is $6-10. Considering that some LCP antennas may be replaced with MPI antennas in 2019, and MPI antennas may be integrated with dock soft boards, we expect 2019 iPhone LCP/MPI antennas to be worth about $8, and 2017-2019 iPhone LCP/MPI antennas have a market space of 3.66. , 8.75, 1.12 billion US dollars.

The value of the LCP/MPI antenna is mainly in the soft board, and the module has a value of about 3-4%. In terms of market segments, we estimate that the antenna value of the LCP module is about 30%, and the value of the soft board is about 70%. Then, the cost of the flexible board is split. According to the LCP resin material and the copper foil, the cost of the soft board is 15%. In addition, the MPI material cost is 70% of the LCP material cost, and the proportion of LCP/MPI antenna shipments is assumed to be 1 in 2019. :1. We expect that the iPhone LCP/MPI module link value will reach 1.10, 2.63, 341 million USD in 2017-2019, the soft board value will reach 2.56, 6.13, 779 million USD, and the LCP/MPI material value will reach 0.38, 0.92. With a value of $102 million, the value of copper foil can reach 0.38, 0.92, and $119 million.

2.1.4 产业链日趋成熟，大陆厂商迎来机会，立讯率先切入

In 2018, the LCP/MPI antenna industry chain was initially formed: 1) The material link, LCP resin/film is still one of the difficulties in the industrial chain. Considering the exclusive agreement between Apple and Murata, we judge that the field will be continued for 18 years. 2) The soft board segment is expected to form a decentralized supply trend, but since the LCP antenna requires special materials, formulations, designs, processes, equipment and test solutions, and LCP FCCL has high temperature liquefaction problems (laser drilling and heat generation), soft board manufacturers A difficult learning curve. At present, the industry chain only has Murata and Jialianyi. It is expected that manufacturers such as MSI will have a chance to enter this year. 3) The antenna module link, Murata has confirmed the withdrawal, we judge that in addition to Amphenol, Apple has introduced Lixun Precision, and will not rule out the cultivation of companies such as Wei Ding in the future. From the point of view of the share, we judge that Lixun has replaced Murata as the main supplier of the iPhone LCP antenna, and is expected to gain about 35% of the iPhone LCP antenna in 2018. In the soft board link, if you do not consider potential manufacturers such as Yu Ding, the orders in 2018 are still dominated by Murata, supplemented by Jialianyi.

The industrial chain is becoming more and more perfect, and mainland companies are expected to benefit. With the acceleration of 5G commercialization, the demand for LCP/MPI continues to expand, and the domestic industrial chain is increasingly perfect. At present, domestic manufacturers have developed and expanded in the fields of LCP antennas, LCP package modules, LCP connectors/wires, LCP multilayer boards, and LCP flexible boards. In the commercial development of LCP, Lixun Precision has already entered the supply of Apple antenna modules. We are optimistic about the increase in the share of Lexun's precision LCP antenna modules. In the long run, Lixun will also benefit from new applications such as LCP transmission lines/connectors. Xinwei Communication's LCP business is expected to usher in new growth opportunities from material to package. The multi-layer LCP of Xinwei can not only realize the integrated design of single or multiple transmission lines, but also realize the RF front end of the integrated antenna. We are optimistic about the company's "front-end materials + mid-end design and integration + back-end manufacturing" integrated solutions and its growth opportunities.

2.2 RF front-end: When 5G is commercialized, the localization of RF front-end chips is justified.

2.2.1 Network and terminal innovation drive RF front-end demand and value

The RF front-end is the core of the communication device, which plays an important role in transmitting and receiving RF signals, and determines many communication indicators such as communication quality, signal power, signal bandwidth, and network connection speed. Represented by a typical smartphone, it includes Cellular (cellular network), BT (Bluetooth), Wi-Fi, GPS, NFC and other RF front-end modules for text/voice/video communication, Internet access, high-definition audio and video, positioning, file transfer. Application services such as swiping cards can be realized. For communication terminal equipment such as smartphones, all components located between the antenna and the RF transceiver are collectively referred to as a radio frequency front end.

iPhone X uses 6-7 front-end modules to achieve high, medium and low frequency full coverage, and the modularization is unprecedented. The Broadcom AFEM-8072 PAMiD in the iPhone X A1865 & A1902 is a mid-to-high-frequency transmitter module that integrates three RF switches, four analog ICs and duplexers, FBAR filters, etc.; Skyworks SKY 78140 PAMiD acts as a low-frequency transmitter module. It integrates 2 RF switches, 2 analog ICs and duplexers. The highly modular RF front-end not only helps reduce the area ratio, but also effectively reduces the complexity of the RF system design and improves the efficiency of the supply chain.

The iPhone RF front-end ASP has reached $30 and will continue to grow in the future. According to foreign media data, the iPhone RF front-end ASP increased from US$14.7 to US$30.2 in 2013-2018, with an average annual compound growth of 15.5%. The iPhone XS/Max RF front-end ASP is about $35 and continues to break through. We believe that the growth of RF front-end value is mainly due to data demand improvement and network upgrade. Under the 5G innovation trend, its value will continue to grow.

The value of the RF front-end is unevenly distributed, and the filter, RF switch, and PA share 90%. A typical smartphone contains 6 to dozens of front-end modules, but due to the large number of devices integrated in the module, the actual number of stand-alone devices may be as many as 50-100. On average, the high-end mobile phone RF front-end ASP is 14-28 US dollars, of which the filter, PA, and RF switches are the most valuable, accounting for 90% of the front-end stand-alone value. With the MIMO upgrade and 5G RF front-end reconstruction, and the high transmit power requirements for power consumption, the demand for antenna tuning, LNA, and envelope chips is also growing, with a stand-alone value of $2-3.

Factors such as data outbreaks, communication technology upgrades, and terminal design innovations are driving the rapid increase in RF front-end demand and value. According to the IHS Wireless Semiconductor Competition Report, the mobile RF front-end market has grown from $4.3 billion in 2010 to $13.4 billion in 2017 over the past seven years, with a compound annual growth rate of more than 17.7%, which is five times faster than the entire semiconductor market. According to YOLE data, the mobile phone RF front-end market in 2017 is 16 billion US dollars, and is expected to grow to 35.2 billion US dollars by 2023. The compound growth rate will reach 14% in the next 6 years, which is still the fastest growing sub-market of the semiconductor industry.

We believe that the growth of the RF front-end in 2019-2023 is mainly divided into two phases: (1) Early growth comes from the innovative demand for RF front-end from LTE-A Pro, but the most important growth comes from the mid-term 5G NSA. At the end of 2017, the 5G NSA defined in 3GPP R15 will integrate 5G NR (new spectrum) into the LTE network to build a 5G transition network, so the dual network connection constructed by it will promote the RF front-end architecture innovation to a greater extent. (2) The 5G frequency band will be upgraded from LTE frequency band to Sub-6GHz in stages, and will be upgraded to the millimeter wave frequency band in the future. Therefore, the market will add a millimeter wave RF front end to the original. According to YOLE, the market for RF front-end modules for the millimeter band will reach $423 million in 2023.

The 5G spectrum cut-off has been comprehensively upgraded, and high-frequency has promoted the evolution of the front-end process. The 5G spectrum is divided into Sub-1GHz, Sub-6GHz and millimeter wave bands, and spectrum cuts are comprehensively improved. Sub-1GHz is suitable for 5G large-scale IoT communication, Sub-6GHz is suitable for enhanced mobile bandwidth service with 100MHz bandwidth, and millimeter wave band is suitable for 5G fixed wireless connection and enhanced mobile bandwidth connection. At high frequency trends, RF front-end processes face challenges, such as acoustic filters that are not suitable for the millimeter band. In addition, under high frequency trends, multiple devices such as PAs, LNAs, and switches may turn to the SOI process.

The complexity of the RF front-end continues to increase, and the modularization trend is significant. The RF front-end complexity increases with the number of supported frequency bands, usually related to the number of antennas and the number of supported data streams, but with the overall screen, more functional components, larger battery capacity, etc., the design continues to compress the motherboard space, leaving on the motherboard The space given to this ribbon is further compressed. As a result, the difficulty and cost of the development side continues to increase, and the demand for highly integrated RF front-end modules is also growing. At present, according to the level of module integration, it can be divided into low-end modules, mid-end modules and high-end modules. The highly modular RF front-end is becoming more competitive with the trend of supporting Global Access.

The mid- to high-end models are more modular and their RF front-ends are more valuable. As the number of frequency bands supported by the smart phone increases sharply, the communication modes and frequency bands are different in different regions, and the multi-model becomes the product strategy of the terminal manufacturer. The flagship machine tends to support the global frequency band, so it has a highly modular RF front-end; while the mid-range machine usually uses a regional model to optimize costs, with a low degree of modularity. In terms of value, the value of the RF front-end is positively related to its modularity. For example, the RF module used in the 2012 Galaxy S III is 6%, accounting for 26% of the cost; the 2017 Galaxy S8 Plus RF module is increased to 32%. The cost ratio is 87%.

2.2.2 Under the barrier of multi-layer industry, the high-end market is temporarily monopolized by US and Japanese manufacturers.

After the merger and acquisition, the US and Japanese manufacturers formed an oligopoly, which together accounted for nearly 90% of the market. American manufacturers Broadcom, Qorvo, and Skyworks have divided the high-end market as the first camp. Japanese manufacturers Murata, TDK, and Taiyo Yuden have occupied the mid-market as the second camp. Hantai Luchang is the third camp to focus on the low-end market, and strives to High-end market penetration. In the flagship of 2017, the RF front-end of the first two camps accounted for 10%-25% of the motherboard area. According to SystemPlus, among the flagship machines of the same generation, the Broadcom, Qorvo, and Skyworks RF front-end motherboards accounted for the highest proportion, followed by Japanese manufacturers Murata and TDK. In addition, the above five manufacturers also continue to maintain Apple's RF front-end core supplier status. We believe that due to the high technical barriers of high-end products, the supply pattern in the flagship RF front-end of Apple and other companies is relatively stable, and there will be no major changes in a short period of time.

The front-end manufacturers are divided into complete production lines and single production lines, with or without baseband voice, IDM and fabless, and modules. The production line is complete to build the first floor barrier. The RF front-end as a systems engineering, the supplier's comprehensive product offerings and service capabilities are critical. A complete production line brings significant advantages to manufacturers, which not only improves customer service capabilities and customer stickiness, but also facilitates layout barriers and higher value module products. At present, Qualcomm is the only manufacturer covering the entire RF system including RF front-end and baseband. Other international manufacturers have basically covered multiple production lines. Most of the domestic manufacturers, except Ziguang Zhanrui, still focus on single products. The device will seize the low-end market by selling discrete devices or supplying module manufacturers.

由于基带Collaboration with the RF front-end is critical, so baseband vendors have a greater influence on the front-end market, and baseband voices form a second barrier. According to Strategy Analytics data, the global baseband market reached $21.2 billion in 2017, with Qualcomm being the only one with a 53% share. In terms of shipments, the domestic manufacturer Ziguang Zhanrui has a 27% share with Qualcomm and MTK. Since the baseband determines the mode, frequency, etc. supported by the RF front end, there is a global impact on the RF front end from the bottom layer. For example, Qualcomm can bundle PAs with baseband and subsidize prices to seize the market.

As the semiconductor sub-sector, the RF front-end is still dominated by IDM, and its manufacturing and packaging testing capabilities are the third-tier barrier. As the standardization of silicon-based semiconductor processes has increased, semiconductor companies have gradually differentiated in the heavy assets such as stripping production and are popular with the fabless+foundry(fab) model. However, in the field of RF front-end, since the filter, PA, LNA, RF switch, antenna tuning, etc. are not standardized silicon-based processes, and non-standard silicon-based processes such as MEMS, compound semiconductor, SOI, and SiGe are used, the fabless ecology imperfect. The RF front-end industry has problems such as high OEM barriers and insufficient supply of advanced capacity. We believe that domestic manufacturers with manufacturing capabilities or reliable fab partners will be more competitive in the market.

Module manufacturers win the game and build the fourth layer of barriers. The merger and acquisition integration has enabled the front-end market to form a new pattern in the fields of discrete devices and front-end modules. The discrete devices are highly competitive, and the market segments such as filters, RF switches, PA, LNA, and antenna tuning are low in concentration, and there are many manufacturers. There are five leading companies in the front-end module market, such as Broadcom, Qorvo, Skyworks, Murata, TDK, etc. The production line is complete, with the ability to design, manufacture, seal and test the whole chain, and also competitive in the field of discrete devices. In terms of segmentation, US and Japanese manufacturers are absolutely leading in the design field, with the best module capabilities and products; Taiwanese companies occupy an important position in the middle and downstream links of foundry, packaging and testing; mainland manufacturers due to technology, patents The process is inferior, so it is concentrated in the field of fabless design, mainly supplying medium and low-end PA, SAW filters, SOI switches and other products, which is highly competitive.

2.2.3 5G will promote the reshuffle of the market, some domestic manufacturers are expected to break through

5G re-shuffled the RF front-end market, and the international leader in the Sub-6GHz field took the lead in adjusting its strategy. (1) Broadcom prepares for the 5G ultra-high frequency band (UHB) by merging the mid-high frequency bands together. With FBAR BAW filter technology, Broadcom also has high-end (HB) and ultra-high frequency band main front-end modules. (2) Skyworks' mid-end products have obtained the majority share of domestic OEM HMOV, and are leading in the high-end module field with SkyOne® LTE front-end solution. For 5G, Skyworks has set its strategic focus on the 5G UHF market with the newly released Sky5TM platform. (3) Qorvo uses a similar approach to provide a broad portfolio of high-end and low-end markets through the RF Fusion TM and RF Flex TM platforms, and its superior package testing capabilities reduce market response time and continually improve products. In terms of 5G layout, Qorvo is the first to introduce UHF front-end modules. (4) Murata's front-end products mainly cover the low frequency band, but are very suitable for the growing diversified module market. (5) Qualcomm is a new entrant in the front-end market with a complete solution from modem to antenna. By integrating TDK's filter technology and bundling baseband and front end with price subsidies, Qualcomm quickly captures the market in the front-end segment.

Beyond Sub-6GHz, millimeter-wave front-end modules may refactor the front-end industry to a greater degree. The millimeter wave front end opens up new avenues for high-speed wireless connectivity and may have a different technology path than traditional RF front ends. At this stage, in addition to Qualcomm clearly located in the 5G millimeter wave RF front-end, other top platforms Intel, Samsung, MTK, and HiSilicon are also actively exploring this field.

From the 4G to 5G Sub-6GHz era, the RF front-end market pattern will continue; from the Sub-6GHz to the millimeter wave era, the high-end market landscape may usher in tremendous changes. We believe that as the giants deploy the next-generation RF front-end, the international competition in the traditional mid-high frequency sector may be reduced. For example, in the upgrade phase from 3G to 4G, international giants have withdrawn from the low-end PA market, and domestic manufacturers have entered the trend, but have maintained a higher gross profit. Therefore, at the time of industrial upgrading, not only the international giants will realize the development of profit-making high points, but also domestic manufacturers can break through in the traditional high-end areas.

At the time of industrial upgrading, domestic manufacturers are expected to break through. Although the RF front-end is completely monopolized by international manufacturers in the high-end market, in the low-end market, the progress of domestic manufacturers in recent years is remarkable. With the development of China's consumer electronics market and OEMs, a number of competitive RF front-end manufacturers have emerged in China, including processor manufacturers Huawei Hisilicon, Ziguang Zhanrui, etc., including filters, PAs, RF switches, etc. RF device manufacturers. These manufacturers rely on cost advantages to cut into the low-end market, and quickly expand to the mid-to-high-end product line after extruding international companies.

We believe that after the arrival of 5G, the mid-to-high-end market in the 4G era will be downgraded to the low-end market, and some domestic manufacturers will still use the above strategies to seize the market share. In addition, if domestic manufacturers can better grasp the trend of RF front-end modularization and provide complete RF system solutions based on existing technology resources, it is expected to fully enter the high-end market. For example, the baseband and RF front-end purple light can be provided, as well as the RF solution provider Xinwei communication including the antenna. Such manufacturers' product lines are highly coordinated, and increased customer stickiness will bring significant improvements in their overall competitiveness. We are optimistic about compound semiconductor manufacturing leader Sanan Optoelectronics, RF solution platform manufacturer Xinwei Communication, RF device manufacturer Weil shares, Tiantong shares, Maijie Technology, non-listed companies suggest to pay attention to Ziguang Zhanrui, Zhongkehan Tianxia, Feiyi Technology , Weijie Chuangxin, Zhuoshengwei, Haoda Electronics, Zhongdian 26, CLP 55 and so on.

2.3 High-frequency high-speed PCB/CCL: 5G macro base station architecture/quantity change brings high-frequency high-speed substrate demand explosion

The application of millimeter wave, small base station, Massive MIMO multi-antenna technology, beamforming and other technologies make 5G communication equipment have higher performance requirements for PCB and CCL materials, and the demand will be larger. Among them, 5G macro base station is low in the early 5G. The key points of the frequency band construction, after being officially commercialized in 2020, it is expected that the more mature small base station construction plan will be used for the 5G high frequency band, and the number of small base stations is expected to usher in an explosive growth.

2.3.1 5G macro base station has a large increase in coverage density, which requires higher performance for high-frequency and high-speed materials.

A wireless network transmits information by radio waves, and radio waves have different frequencies, and each frequency range can be divided into one frequency band (spectrum). The higher the frequency, the worse the penetration ability, the smaller the coverage; the larger the frequency range, the faster the transmission rate. According to the latest report released by GSA in August, globally, 700MHz, 3400MHz-3800MHz, and 24GHz-29.5GHz are the mainstream 5G frequency bands in the world, of which 3400MHz-3800MHz is the most mainstream.

2017年11月，工信部发文明确我国5G将使用3300MHz-The 3600MHz and 4800MHz-5000MHz frequency bands, of which the 3300MHz-3400MHz frequency band is used in the upper limit. In the 5G low frequency range of 3300MHz-3600MHz and below, the low frequency resources are mainly used for application scenarios such as continuous wide coverage, low delay, high reliability, low power consumption and large connection, and the main carrier is a 5G macro base station.

Compared with 4G, the frequency band of 5G is higher than 4G, and the penetration of electromagnetic waves is poor and the attenuation is large. Under the condition of no other factors, the coverage of the base station is smaller than that of the 4G base station, and the construction density is smaller. Bigger. According to the Ministry of Industry and Information Technology, the number of 4G base stations in China in December 2017 was about 3.28 million. The plans for 4G in the three major operators in 2018 include: 1) China Mobile: In 2017, 360,000 new 4G base stations will be added. In 2018, the construction of new stations will be controlled. It is estimated that the number of new base stations will be less than 80,000. 2) China Telecom: 4G base stations will add 280,000 to 1.17 million in 2017 and 200,000 in 2018 to improve user experience and coverage quality. 3) China Unicom: In 2017, the number of 4G base stations will increase by 110,000. The number of new additions in 2018 is expected to be equivalent to that of 2017, and the expansion of key regional networks will be carried out. The above total is expected to reach 3.67 million 4G base stations by the end of 2018. By 2020, the total number of domestic 4G macro base stations will reach 4 million.

Considering the coverage enhancement brought by 5G spectrum allocation, large-scale antenna and uplink and downlink decoupling, we expect that the density of China's 5G macro-building stations will be at least 1.5 times that of 4G base stations, and the total number will reach 6 million. According to China Telecomtsu's data, as of In Q18, in 2018, the number of 4G base stations in China reached 3.393 million, and the scale of 4G networks ranked first in the world. The number of 4G base stations in the world is more than 5 million, and China accounts for about 60%. It is assumed that China will continue to have advantages in 5G era, 5G. The number of macro base station construction accounts for 60% of the world, and the total scale of global 5G macro base station construction is expected to reach 10 million.

The 5G high-band resources mainly correspond to hotspots and high-capacity (high-frequency means that more bandwidth can be allocated), and the high-frequency for the macro base station, the coverage is too small, the cost is too high, and the macro base station is difficult to deploy, and the site resources are It is not easy to obtain, so the 5G high-band resources will no longer use the macro base station, and the micro-cell will become the mainstream. The form is based on the small base station as the basic unit for ultra-dense networking, that is, the dense deployment of small base stations (it is expected that the domestic small base stations will be more More based on 4.9GHz and millimeter wave construction). In the 5G ultra-dense networking scenario, the spacing between small base stations is small (10-20 meters), and the shortest spacing of the comparison macro base stations is also 500 meters. It can be seen that the small base stations need to achieve continuous coverage, and the number of them will be It is much higher than the macro base station, but at present, the volume and scale construction time points are difficult to estimate. We focus on the discussion of 5G macro base stations.

5G communication equipment will have more stringent performance requirements for high-frequency communication materials, and can maintain stable and high-quality dielectric constant under the condition of minimizing dielectric loss, which is an important basis for high-frequency operation. The increase in the number of 5G macro base stations will drive the increase in the use of high-frequency and high-speed materials. Secondly, small and micro base stations, indoor base stations and millimeter-wave base stations will be potential future increments.

2.3.2 5G macro base station architecture changes from BBU+RRU+ antenna to AAU+BU/CU

A conventional 3G/4G base station is usually a baseband processing unit (BBU), a radio remote unit (RRU), and an antenna feeder system.

After the convergence of 5G core network technologies, the base station architecture will undergo major changes compared to 4G base stations:

Reconstruction of BBU to CU+DU: According to China Mobile C-RAN White Paper “Towards 5G C-RAN: Requirements, Architecture and Challenges”, the 5G BBU function will be reconstructed into CU (Central Unit) and DU (Distributed Unit) Two functional entities. The CU and DU functions are distinguished by the real-time nature of the processing content. The CU device mainly includes the non-real-time wireless high-layer protocol stack function, and also supports the deployment of some core network functions sinking and edge application services, while the DU device mainly processes Layer 2 functions of physical layer functions and real-time requirements, considering saving transmission resources between RRU and DU, some physical layer functions can also be moved up to RRU implementation.

The RRU and the antenna are fused into the AAU: the RRU of the 4G base station is independent of the antenna, and the feeder is connected. If the 5G base station under Massive MIMO technology continues to adopt the traditional antenna architecture, each transceiver unit must feed the line, and the base station side will bear huge Pressure, the AAU active antenna that integrates the RRU with the antenna can reduce feeders and reduce losses, and is expected to become the mainstream choice.

After the convergence of 5G core network technologies, the base station architecture will undergo major changes compared to 4G base stations:

The antenna RF board of the 4G base station and the RRU board generally use a high-frequency PCB board (the upstream material is a high-frequency copper-clad board), wherein the RRU is equipped with a PA (power amplifier), a filter, etc., and we expect the PCB of the RRU+ antenna of a single base station to be used. The area is about 2.26 square meters, and the total value of the PCB of the RRU+ antenna of a single base station is 5224 yuan, which are all high-frequency PCB boards.

Under the trend of 5G base station antenna activation, the antenna + RRU + BBU becomes the architecture of AAU + BBU (CU / DU), and a single base station will bring greater demand for high-frequency high-speed PCB and its upstream materials. In the 5G base station AAU scheme, the antenna oscillator and the micro transceiver unit array are directly connected to a PCB board, and the digital signal processing module (DSP), digital-to-analog (DAC)/analog-to-digital (ADC) converter is integrated in the micro transceiver unit array. , amplifier (PA), low noise amplifier (LNA), filter (Filter) and other devices, as a 4G base station RRU function. The antenna board and the vibrator in the AAU are integrated on one PCB (area separately), and the transceiver unit array and the PA are integrated on one PCB (area separately). We expect the AAU (antenna + RRU) PCB of the 5G base station. The area is 2.22 square meters, in which the micro transceiver unit array adopts high speed board, PA is high frequency board, antenna radio frequency board is higher end high frequency board, and antenna vibrator uses ordinary high speed board; it is expected that AAU PCB total value of single 5G base station It is 10,911 yuan, all of which are high frequency or high speed PCB boards.

(2) 4G base station BBU vs. 5G base station BBU

Compared with the 4G base station, the BBU of the 5G macro base station does not change much in size and quantity. However, due to the signal transmission speed and the capacity requirement, the number of layers of the backplane and the board will be increased from 18-20 layers of 4G to 20G of 5G. The 30-layer, the copper clad plate needs to be upgraded from the traditional FR-4 to a higher-performance high-speed material, such as Panasonic's M4/6/7 high-speed copper clad material, so the price per square meter has increased. We expect the PCB area of the 5G base station BBU to be approximately 0.47 square meters, which is roughly the same as that of the 4G base station. The PCB value of a single 5G base station BBU is about 5112 yuan, and 4G is 2750 yuan.

According to calculations, the value of a single 4G base station PCB is about 0.79 million, of which the high-frequency/high-speed PCB value is about 0.59 million yuan; the single 5G base station has a PCB value of about 16,000 yuan, both high-frequency/high-speed materials, high-frequency/high-speed The value of PCB has increased by 167% from 4G to 5G single base stations. Assume that the 5G construction period is extended to 2019-2026, the total construction of domestic macro base stations is 5.7 million stations, accounting for 60% of the world, and the total construction of global 5G macro base stations is about 9.5 million stations. According to our calculations, the peak value of PCB value of 5G macro base station is expected to reach 27.9 billion yuan in 2022.

The above is the measurement of the value of PCB, upstream high-frequency / high-speed materials, in the field of 4G base station antenna, the current market-related PTFE high-frequency copper-clad board purchase price accounted for about 50%-60% of the antenna high-frequency PCB price, general communication The purchase price of FR-4 CCL in PCB-like PCBs accounts for about 17% of PCB sales price, assuming that the average value of 4G base station high-frequency/high-speed CCL in PCB is 30%, considering the downstream customer groups in the field of communication base stations. The status of the industrial chain and the particularity of the bidding business model, the high-tech high-speed PCB and CCL product technology threshold, assuming that the value of the 5G base station high-frequency / high-speed copper clad in the PCB is relatively higher in the years before the 5G base station construction. After the gradual reduction, assume 50% -30%. Based on this, it is estimated that the peak period of 5G macro base station construction will be 2022, and the total demand for high-frequency/high-speed CCL will be about 9.8 billion yuan.

5G brings a decade of opportunity to the IC industry