Domestic manufacturers target 5G mobile phone LCP antenna modules, and market competition further intensifies

After Apple and Huawei released their 5G blockbuster models and sold them out, it also announced the arrival of the 5G phone replacement wave.

According to data from the China Academy of Information and Communications Technology, the domestic market shipments of 5G mobile phones exceeded 100 million units in the first nine months of this year, and 5G mobile phone shipments accounted for more than 60% of domestic new phone shipments for four consecutive months. The market predicts that in the next five years, China's 5G mobile phone shipments will continue to account for about half of the global market share.

Despite the impact of the Sino-US trade war and the global epidemic, 5G mobile phone shipments are still growing rapidly. Among them, antennas are the first link in the 5G industry chain to undergo process innovation and demand growth. Under the high-frequency and high-speed transmission requirements of 5G, LCP antennas have become the mainstream process for 5G mobile phone antennas. Based on the current demand for 5G mobile phones, domestic related industry chain manufacturers have also targeted the blue ocean market in this field, and market competition has intensified.

Process constraints

As is well known in the industry, the LCP antenna industry chain consists of raw materials, flexible board manufacturers, downstream module manufacturers and terminal manufacturers, etc. Among them, the middle and upper reaches are dominated by Japanese and American manufacturers, and domestic manufacturers participate in module manufacturing.

According to relevant data, in the LCP antenna industry chain, the module link accounts for about 30% of the value of the LCP antenna, and the soft board link accounts for about 70%. The value of LCP materials accounts for 15% of the cost of LCP soft boards.

It is obvious that domestic manufacturers are still in a relatively weak link in the LCP antenna industry chain.

"Apple uses LCP antennas in a series of products such as mobile phones, tablets, headphones and watches to improve transmission efficiency. Its annual procurement amount is as high as several billion US dollars. In addition, Samsung, Huawei and others have also followed suit and adopted LCP antennas. The overall market demand still has a lot of room for growth. However, at present, there are not many domestic manufacturers that can participate in the module manufacturing link, and none of them have been able to become Apple's LCP suppliers." Industry insiders analyzed.

Under this circumstance, based on the driving effect of Apple, Huawei, Samsung, etc., and the gradual application of millimeter waves, the penetration rate of domestic first-tier terminal manufacturers in LCP antennas will gradually increase. However, due to its high process barriers, low yield, and high cost of a single LCP antenna module, domestic terminal manufacturers have not followed up significantly. On the contrary, module manufacturers and material manufacturers have made relatively early layouts, and some manufacturers are trying to break through in the process or material links to accelerate localization.

Jiwei.com learned that in order to achieve one-stop service for LCP antenna modules, Xinwei Communication has built a medium-scale LCP production line covering front-end and back-end processes, making a breakthrough in process technology.

In contrast, its old rival, Micro-Bio, is focused on holding on, continuing to focus on back-end processes, and strengthening strategic cooperation with domestic manufacturers in the raw materials segment to accelerate domestic substitution.

“For current domestic antenna module suppliers, it is still quite challenging to break through in the front-end process,” the above-mentioned industry insider admitted.

Indeed, in the current LCP field, in addition to technological constraints, cost pressure in the raw materials link is also a major obstacle to the development of the domestic LCP antenna module market.

Material barriers

As mentioned above, "LCP material value accounts for 15% of the cost of LCP soft boards". However, there are not many resin suppliers that can mass-produce LCP films for antenna modules. High-end film-grade resins are concentrated in companies in the United States and Japan. Domestic manufacturers rely on outsourcing from Taiwanese, Japanese and American manufacturers.

"Not only is it dependent on imports, the price of LCP materials has also remained high for a long time. Especially since the second half of this year, the price of LCP has been relatively around 60,000 to 70,000 yuan per ton. Under the dual stimulation of price and demand, domestic LCP material manufacturers have also seen opportunities." said an industry insider.

Looking at the domestic market, domestic LCP material manufacturers are dominated by Water Holdings, Kingfa Technology, and Polylite, which are able to achieve large-scale mass production of resins, and these manufacturers have also continued to increase their LCP material production capacity in recent times.

It is reported that Water Holdings recently announced that a project to produce 5,000 tons of liquid crystal polymer LCP materials annually has been put into production. With the support of this production line, it now has an annual production capacity of 8,000 tons of liquid crystal polymer LCP materials.

At the same time, Kingfa Technology is also vigorously increasing its investment in LCP. In August this year, it added 3,000 tons/year of LCP production capacity, bringing the total capacity to 6,000 tons. Polylite has currently built an annual production capacity of 2,000 tons of LCP pure resin.

It can be said that with the continuous advancement of 5G commercialization, especially after the transition from Sub-6G to millimeter wave, the demand for LCP antenna modules is self-evident, so the continued expansion of production capacity of LCP material manufacturers will also benefit simultaneously.

"With the innovation and iteration of technology, the cost of using LCP will continue to decrease. In addition, the application penetration rate of LCP in terminals is constantly increasing. Domestic module manufacturers are also actively cooperating with material manufacturers to find alternative LCP materials in the domestic market." A module manufacturer told Jiwei.com.