Intelligent driving will usher in rapid development, and sensors are expected to be fully deployed

Smart driving sensors will be the first to usher in rapid growth, and the industry scale is expected to exceed US$20 billion in the future. The progress and upgrading of active safety technology will promote the rapid development of smart driving, and the penetration speed from high-end cars to low-end cars will increase in the future. The goal time for major global mainstream automobile manufacturers to achieve the commercialization of driverless driving is concentrated in 2020, and China's relevant policies on smart driving are expected to be implemented at an accelerated pace. Guanyan Tianxia predicts that ADAS is expected to reach the Level 3 highly automated driving stage in 2020, and the penetration rate of Level 2 assisted driving will reach more than 40%. Based on the above reasons, we believe that the development of smart driving will promote the rapid growth of sensor demand, and there is a large room for growth in the future. It is estimated that the scale of the sensor industry will reach US$23 billion in 2022, and three major sensors will usher in good investment opportunities: vehicle-mounted cameras, millimeter-wave radars and lidars. The market scale is expected to grow to US$7.7 billion, US$6.2 billion and US$1.4 billion in 2022, respectively.

The three sensors complement each other in terms of functions. In the short term, on-board cameras and millimeter-wave radars are easier to scale up. To achieve higher-performance intelligent driving, multiple sensors must jointly form a perception system, and different sensors meet different requirements. Cameras are low-cost, widely used, and have mature technology. They can achieve image recognition and are currently the field with the fastest breakthroughs and growth. Millimeter-wave radars have great advantages in speed and distance measurement, and the market is basically monopolized by foreign countries. However, with the continuous breakthroughs in domestic technology, related companies will have growth opportunities; LiDAR is powerful and is the best solution for future driverless driving, but the current cost is too high to be scaled up. We judge that it will achieve rapid growth after 2025.

The compound annual growth rate of the vehicle camera market exceeds 30%, and the compound annual growth rate of the millimeter wave radar market reaches 25%. According to a report released by IHS Automotive, a professional automotive research company in the United States, the compound annual growth rate of vehicle cameras in China from 2015 to 2020 will exceed 30%. With the advent of the Level 3 stage after 2020 and the rapid penetration of ADAS, the demand for vehicle cameras will increase from 3-4 per car to a maximum of 22, and the market will show geometric growth. Before the ultimate driverless era arrives, millimeter wave radar (RaDAR) will be the mainstream of vehicle radar in recent years, forming a technical integration with vehicle cameras. To fully realize the functions of ADAS, it generally requires "1 long + 4 medium and short" 5 millimeter wave radars. Millimeter wave radar will usher in accelerated development with the continuous upgrading of ADAS technology. Plunkedt Research predicts that by 2020, the shipment of millimeter wave radars will increase to 72 million, with a compound annual growth rate of 25%.