Domestic filters are accelerating their breakthroughs as investment layout is welcoming the "new trend"

Jiwei.com reported that under the background of the rapid development of 5G and the increasing uncertainty in Sino-US relations, RF filters are important components of RF front-ends, and the industry is in urgent need of domestic substitution of filter products.

In the past two years, Huawei and Xiaomi have entered the market one after another. In January 2020, Huawei's Habo Investment acquired a stake in Wuxi Haoda Electronics Co., Ltd., a domestic filter manufacturer. In June of the same year, Huawei acquired a stake in China Electronics Technology Deqing Huaying Electronics Co., Ltd. As early as 2018, Haoda Electronics also received investment from Hubei Xiaomi Changjiang Industrial Fund Partnership (Limited Partnership) under Xiaomi Group.

The filter market has a broad space, but the technology is relatively weak

Due to different requirements of application scenarios on cost, production process, technology and reliability. Filters can be divided into LC filters, cavity filters, acoustic filters (SAW filters, BAW filters), dielectric filters, etc. According to the application scenario classification, filters can be mainly divided into communication base station filters and mobile phone filters. At present, mobile phone RF filters are mainly divided into two categories: SAW filters and BAW/FBAR filters; base station RF filters are mainly divided into metal cavity filters and dielectric filters.

Mobile phones and other mobile smart terminals are currently the largest application market for RF filters. According to Yole Development's report, the global mobile phone RF front-end market size was approximately US$15 billion in 2017, and is expected to reach US$35.2 billion in 2023, with a compound annual growth rate of 14% from 2017 to 2023. The filter market size in 2017 has reached US$8 billion, and by 2023, the global filter market size will reach US$22.5 billion, reaching an annual compound growth rate of 18.81%.

The industry leaders in the United States and Japan continue to increase their mergers and acquisitions, and related RF front-end companies have built an ecosystem consisting of internal capabilities, intellectual property blocks and foundry services. Relevant data shows that the filter market share of Broadcom, Qualcomm, Qorvo and Skyworks in the United States, and Murata and Taiyo Yuden in Japan total more than 90%. The acoustic filter market is mainly dominated by manufacturers in the United States and Japan, among which the United States has an advantage in BAW filters, and Japan is relatively leading in SAW filters.

Among them, Skyworks has a relatively complete product layout in the RF front-end, is at the forefront of modular capability development, and has a leading share in the PA and RF switch fields; Qorvo has leading technology in the BAW filter direction, and its layout in the RF front-end is also relatively comprehensive, with a certain share in each segment; Broadcom mainly occupies an absolute leading share in BAW filters and has the most competitive product portfolio. The BAW filters it launched also dominate the high-end smartphone application market; Murata provides a variety of RF chips and has a leading share in SAW filters.

With the arrival of the 5G era, communication standards have been upgraded and frequency bands have increased. Higher-level communication systems must be backward compatible. The increase in the number of frequency bands will directly increase the number of RF front-end power amplifiers, switches, and filter chips. To achieve 5G+4G global access, a 5G mobile phone in the future may require more than 90 filters.

According to TDK's forecast, 5G mobile phone sales will grow by 570% in 2021, cellular wide-area low-power IoT products will grow by 65%, and the more networked new energy vehicle industry will grow by 53%, driving the rapid growth of the RF front-end market such as filters. At the same time, among the top seven global smartphone manufacturers, five are Chinese manufacturers, with a combined share of more than 50%, providing broad space for domestic filter companies to replace domestic products.

Chinese manufacturers mainly focus on SAW filters, and few companies are involved in BAW filters. The main domestic SAW manufacturers include Haoda Electronics, Maxtech Technology, Deqing Huaying, China Electronics 26th Institute, China Electronics 55th Institute, etc. In the field of BAW filters, domestic companies are mainly Tianjin North, Kaiyuan Communication, Hantianxia, ​​etc. At present, Chinese companies have very weak technology in BAW filters.

It is understood that at present, SAW is mainly used in low-end and mid-range mobile phones, accounting for about 70% of the filter market, and BAW is mainly used in high-end mobile phones, accounting for about 30% of the market. With the increase of 5G high-frequency applications, the share of BAW filters is expected to increase. Domestic manufacturers can use this to penetrate the low-end and mid-range SAW layout and gradually enhance their voice in the filter industry.

Becoming a new investment outlet, local breakthroughs are expected

Under such circumstances, driven by demand, the domestic filter market is becoming a new investment outlet, with many companies entering the market and increasing their investment.

In September 2020, 5G RF filter chip design and manufacturing company Zhouxun Technology announced the completion of nearly 100 million yuan in Series A financing. Zhouxun Technology was founded in 2015 and has fully mastered the key core technologies of SAW and BAW, and has independent intellectual property rights. Its products can fully cover all frequency bands of 5G applications (2.6GHz, 3.5GHz, 4.9GHz).

Also in 2020, Anhui Yunta Electronic Technology Co., Ltd. completed a strategic A1 round of equity financing of 100 million yuan. In more than three years since its establishment, the company has finalized more than 70 filter products and launched them one after another. It has accumulated technology in the fields of ultra-high performance integrated passive devices (SPD), low temperature co-fired ceramics (LTCC), surface acoustic wave (SAW) and bulk acoustic wave (BAW), becoming a company with the ability to develop and supply all types of filters. Hybrid filter products, in particular, are expected to become standard devices for wireless terminals.

Suzhou Hantianxia Electronics Co., Ltd., founded in 2015, also completed a new round of financing in 2020. The company is mainly engaged in the research and development of RF filters and related RF chips and devices. It has a number of core technologies for RF MEMS resonators, filters, and oscillators. It is the first company in China to fully master the mass production technology of RF MEMS filters (BAW).

In January this year, Qian Yongxue, chairman of Beijing Onrui Microelectronics Technology Co., Ltd., said in an interview with Jiwei.com reporter that domestic filters are a shortcoming, especially high-performance filters. It generally takes more than a year for domestic high-performance filters to be mass-produced.

my country's filters have also made some breakthroughs in some niche areas, and companies in the filter industry chain are also stepping up the layout of related production lines.

Sunway Communication has currently independently designed dozens of filter products, including SAW, TC-SAW, and BAW, which basically cover the frequency bands from 2G communication to 5G communication. Some products have been delivered in small batches to domestic customers, and the products have been recognized by some ODM manufacturers and brand manufacturers.

Since 2016, Zuolan Microelectronics has been deeply involved in RF front-end devices, especially in the filter segment. The TC-SAW filter developed by the Zuolan Microelectronics team has successfully passed the verification of relevant technical key points, smoothly solving the problems of poor temperature characteristics and severe frequency drift of conventional surface acoustic wave filters, and filling the domestic TC-SAW technology gap.

On November 28, 2020, Zhuoshengwei announced that it plans to invest 800 million yuan to build a SAW filter wafer production and RF module packaging and testing production line in Wuxi. After the project is completed, it will enhance the company's overall process technology capabilities and module mass production capabilities in the field of RF SAW filters, and realize the full industrial chain layout of RF SAW filter chips and RF modules.

Recently, the second phase of the 5G RF filter, a major project of the "China Nano Valley" led by Zhao Yuliang, an academician of the Chinese Academy of Sciences, has also received good news about the start of expansion. The project has independent intellectual property rights for filters, and the construction includes wafer front-end and back-end production lines. It will further expand the production of 5G surface acoustic wave filters and help solve the national key technical problems of 5G communication RF front-end.

On March 2 this year, Zhejiang Haining Tiantong Ruihong's annual production of 1.2 billion 5G smartphone filters project was completed (put into production). The total investment in the first phase of the project is 209 million yuan. It will form an annual production capacity of 1.2 billion series of acoustic surface filters for 5G smartphones. After production, it is expected to achieve an output value of 360 million yuan.