Recently, CEO of Huawei’s mobile phone business said at the Mate 20X conference that one of the core issues that 5G mobile phone manufacturers need to solve is signal processing problem.
The are many developments of smart phones these years, the integration is increasing, the signal transmission density is increasing, and the distance between internal chips is becoming more and more compact. These features have been upgraded in 5G mobile phones. At the same time, the electromagnetic interference in the internal space of 5G mobile phones is becoming worse. For most cases, electronic products are designed with more electromagnetic shielding devices to solve related problems.
Electromagnetic Shielding Industry Tends to Be Customized
The 5G mobile phone market is in the ascendant, and mobile phone manufacturers are all showing their powers. Also, their positive layouts are only to attract more users. Under the industry trend of “unconventional”, the 5G mobile phones of various manufacturers have great differences in hardware configuration, design and internal space layout, which makes finding a universal electromagnetic shielding solution a fantasy.
A wide variety of 5G mobile phones make electromagnetic shielding materials equally diverse, and the different needs of various brands of mobile phones have made the electromagnetic shielding industry appear to be customized. In recent years, the iterative cycle of smartphones is fast, and the update and upgrade of 5G mobile phones are expected to occur frequently. Huawei’s Mate 20X, which was released recently, was sold through pre-sales, with the first batch of only one million. The production of 5G mobile phones in the future may be small-volume and pre-sale, which will directly lead to the small batch and customized features of the electromagnetic shielding industry.
Market Share of Huawei is Increasing
FRD, Huawei’s current core supplier of electromagnetic shielding materials is expected to be directly benefited and to have a better market performance. In order to expand business in the mobile phone industry, electromagnetic shielding material suppliers must actively establish cooperative relationships with downstream mobile phone manufacturers.
5G Mobile Phone will Accelerate Electromagnetic Shielding Materials Market’s Increasing
Electromagnetic shielding materials and devices include conductive plastic devices, conductive silicone, conductive cloth gaskets, metal shielding devices, absorbing devices and conductive adhesives, etc., mainly used in notebook computers, communication cabinets, mobile phones and other fields.
In 2013, the value of global electromagnetic shielding market was about 5.2 billion USD. In 2016, the market value exceeded 6 billion USD. Based on the market value of 2013, the compound growth rate of global electromagnetic shielding market was approximately 4.89% in 2016.
Since the process requirements for electromagnetic shielding materials used in 5G mobile phones are higher than those used in 4G mobile phones, the value of a single product is expected to increase. Driven by 5G mobile phones’ popularity, the size of the electromagnetic shielding market in 2021 is expected to exceed 7.8 billion USD, with a compound growth rate more than 5.2%.
By 2023, the penetration rate of 5G mobile phones is expected to increase to 18%, which is about 14% higher than the penetration rate in 2021. By then, the size of the electromagnetic shielding market may exceed 9.3 billion USD, and the compound growth rate will increase to around 6%.
5G is Pushing the Electromagnetic Shielding Material Market
Leading Enterprises of Electromagnetic Shielding Material
Laird and the Chomerics Division are the world's leading companies in the field of electromagnetic shielding materials. Laird was founded in 1898, and its main products are electromagnetic shielding materials, thermal interface materials and wireless antennas. These products are widely used in telecommunications, digital communications, mobile phones, computers, general electronic devices, network equipment, aviation, defense, automotive and medical equipment. Among various businesses of Laird, vehicle electronics business accounted for the heaviest, and the proportion of mobile terminal business ranked third among all departments, and it is expected to increase with the application of 5G.
Ratio of Each Department of Laird
The competition in the electromagnetic shielding industry is dominated by research and development capabilities, and Laird's investment in research and development has also increased in recent years. In 2017, proportion of R&D investment in Laird has exceeded 10% of the corporate income.
R&D Investment of Laird Keeps Increasing
The electromagnetic shielding industry in China started at the end of the 20th century. Most of the enterprises have few types of products, serious homogenization and low technical content, which has formed a market environment with fierce price competition.
Only a few companies in China have R&D capabilities, core intellectual property rights, and professional electromagnetic shielding application solutions. Among all the listed companies in China, FRD, Everwin Precision, Jones and Tanyuan Technology are the leading ones.
Founded in 1993, FRD is a leading provider of electromagnetic shielding solutions. Its main business is about electromagnetic shielding materials and devices, thermal materials and devices, and others. Among them, electromagnetic shielding materials and devices are the main business units. In 2018, FRD reported that the revenue of its electromagnetic shielding materials and devices was about 40 million USD, accounting for 50.5% of the total revenue.
Business Income Distribution (M $) of FRD
FRD's customers can be divided into three categories: Huawei, ZTE, Nokia, Cisco and other communication companies; Lenovo, Microsoft, Samsung, Apple, OPPO, vivo and other mobile phones, notebook companies; and other well-known companies such as Foxconn, Flextronics, and BYD. Among them, Huawei is the largest customer of FRD. With the development of 5G, cooperation with Huawei is expected to bring more revenue to FRD.
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