Mobile phone brands prepare for 5G business opportunities, and the three major GaAs manufacturers are entering the peak season

As we enter the peak season for consumer electronics in the second half of the year, the market expects that Apple will release the next-generation smartphone iPhone 13 (tentative name) in September. At the same time, Android camps such as Samsung, Xiaomi, OPPO, vivo, and Sony will also launch flagship phones to compete. The three major gallium arsenide giants, WIN Semiconductors, Suning, and Macronix, will benefit from the increase in demand for mobile phone PAs and usher in the industry's peak season.

As the global 5G network begins to be commercialized, it is expected that most flagship new models of mobile phone brands this year will fully support 5G network services. The number of mobile phone PAs (power amplifiers) used in 5G mobile phones is on average 2-5 more than that of 4G mobile phones, and the unit price is also higher, which is beneficial to the operation of gallium arsenide factories.

Win Semiconductors is the main supplier of PA for Apple's iPhone. Although Apple delayed the launch of its new phone until the fourth quarter last year due to the epidemic, the market generally believes that Apple will return to previous years this year and release a new smartphone, the iPhone 13, in September. The supply chain will also enter the traditional peak season for goods in July and August. By then, Win Semiconductors' capacity utilization rate is expected to increase further than about 80% in the second quarter.

Macronix has a certain market share in the global 4G mobile phone PA market and maintained stable shipments in the first half of the year. In response to the 5G mobile phone business opportunities, Macronix began to enter the market last year, locking in existing customers in the United States, Japan, mainland China, etc. As customer verification is completed, 5G PA will gradually increase shipments in the second half of the year.

In terms of production capacity, Win Semiconductors and Macronix have continued to expand their production capacity in recent years in response to demand. Win Semiconductors completed the opening of 5,000 new production capacities last year, and its current monthly production capacity can reach 41,000 pieces. Macronix also expects that after the equipment is in place in July this year, the monthly production capacity is expected to increase from the current 12,000-13,000 pieces to 15,000 pieces, and further increase to 20,000 pieces by the end of the year.

Xinxin is an upstream manufacturer of WIN Semiconductors and Macronix. In recent years, it has continued to deepen its roots in the two major application fields of microwaves and optical communications. It believes that with the increase in 5G penetration, the application of WiFi 6, the gradual increase in 5G PA volume, and the recovery of 3D sensing VCSEL momentum, operations will gradually heat up. In response to demand, Xinxin also plans to purchase another 5-10 MOCVD machines this year, which are expected to arrive by the end of the year at the earliest.