On the evening of November 29th, JSZS Microelectronics Technology Group, China's leading RF chip technology leader, issued an announcement stating that the company plans to invest in the construction of Xinzhuo's semiconductor industrialization project. The project is expected to have a total investment of 1.8 billion yuan.
JSZS said that through the construction of wafer manufacturing and packaging and testing production lines, after the project is completed, the entire industry chain layout of RF SAW filter chips and RF modules will be realized, and the domestic substitution of RF SAW filter chips and RF modules will eventually be realized.
Affected by the news, JSZS stock price rose 4.72% as of the close.
Leading RF front-end expands product line
The RF front-end mainly plays the role of receiving and sending RF signals, including five components: RF switch, low noise amplifier (LNA), filter, power amplifier (PA) and duplexer.
As the leading RF front-end chip in China, JSZS's main source of revenue is RF switches (about 85%), and it is the world's fifth largest RF switch design company (with a market share of 5%) and LNA (about 12%). One of the first companies to launch single-chip products integrating RF low-noise amplifiers and switches, has taken the lead in enjoying the dividends of domestic substitution of RF switches and LNAs.
JSZS mainly provides product supply for Samsung, Xiaomi, Huawei, Lenovo and other mobile smart terminal manufacturers, and it is currently in the stage of rapid increase in its share.
In addition to RF switches and LNAs, JSZS is currently expanding its product line from the original device to modularization. This project is not the first move of JSZS to get involved in wafer manufacturing. As early as May, JSZS planned to raise an additional 3 billion yuan to develop and industrialize high-end RF filter chips and modules, 5G communication base station RF devices, and Foundry foundry partners to establish production lines.
Prior to this, JSZS had always adopted the Fabless model (design only, not manufacturing), and did not directly engage in the production of chip products. The production and manufacturing links such as wafer manufacturing, inspection, packaging, and testing were all completed by outsourcing. But this year's actions may mean that JSZS will start to try the IDM model (designed and manufactured by itself).
Low domestic participation
With the increasing demand for terminals such as 5G and AIoT, the RF front-end chip market will be further expanded. According to Yole Development’s forecast, the mobile phone RF front-end market will grow to 35 billion U.S. dollars in 2023, with filters occupying the largest share. It is expected to grow from 8 billion U.S. dollars in 2017 to 22.5 billion U.S. dollars in 2023, while RF switches are only 300 million US dollars, LNA is only 60 million US dollars.
In the entire RF front-end chip/module industry chain, China's participation in it is still very low. Taking wave filters as an example, wave filters are divided into BAW/FBAR and SAW. The traditional SAW market is mainly occupied by Japanese manufacturers (Murata, TDK, Taiyo Yuden); the BAW filter market as an upgraded alternative product is also occupied by Singapore`s Avago 87 % (Acquired Broadcom) and Qorvo (merger of US RFMD and TriQuint).
With the development of China's mobile communication technology, domestic radio frequency manufacturers have also begun to emerge constantly in an attempt to occupy a position in the cruel market.