5G Mobile Phone Cooling Demand Upgrade: Graphite Heat Conductive Material Market is in the Ascendant

On August 16, Huawei released Mate 20X 5G mobile phone. Within a minute, all major sales platforms have shown "no goods." According to the data of the day before the official seal, the number of reservations for this mobile phone exceeded 1 million.

Higher speed is one of the reasons why 5G mobile phones are so popular. Compared to 4G, the download speed will increase by more than 9 times. To have higher speed, large bandwidth and low latency characteristics, the core components of the 5G handset require more computation, while larger computation means more heat.

Tests have shown that with the temperature increase of every 2 °C on electronic component, its reliability reduces by 10%; when the temperature rises by 50 °C, its lifetime is only 1/6 when the temperature rises by 25 °C. The heat dissipation problem has become an urgent problem for electronic equipment industry.

At present, there are two ways to solve the heat overload, either to reduce the heat generation or to accelerate the heat conduction.

Reducing heat generation, that is, optimizing the calculation method, the technical barrier to greatly reduce heat generation is too high, so it would not become a mainstream solution.

And there are two ways to accelerate the heat dissipation. One is to accelerate the convection, which can be realized by a fan; the other is to dissipate heat through the heat-conducting material such as heat sink, heat pipe and heat equalizing plate. Considering the size of mobile phones, heat dissipation through thermal materials is the mainstream choice of mobile phone manufacturers.

Graphite Thermal Material: the first choice for 5G mobile phone cooling

Graphite has very good planar thermal conductivity, and its thermal conductivity in the sheet form is much better than that of ordinary pure copper. Therefore, graphite is often used in the form of a diaphragm when used as a heat conductive material. In addition, its graphite density is low, which meets the lightweight requirement of mobile phones. The higher specific heat capacity means that the graphite heat conductive material has strong heat resistance and has longer service life.


Characteristic Advantages of Graphite




There are mainly three types of graphite thermal conductive material products: the single-layer thermally conductive graphite film, the multi-layer thermally conductive graphite film, and the composite thermal conductive graphite film.

Products of these three forms all have superior thermal conductivity, but the value of single-layer ones are slightly lower, and their function is relatively simple. The possibility of using multi-layer thermal conductive graphite film and composite thermal conductive graphite film for mobile phone manufacturing is greater. The multi-layer thermal conductive graphite film is a composite of single layer graphite films, which has heat storage capacity in addition to heat conduction. The composite thermal conductive graphite film is filled with metal sheet, thermal conductive gel or others, so it not only conducts heat, stores heat, but also shields part of the radiation.

5G Creates Long-term Development Space

5G is still in the initial stage of construction. In 2019, the penetration rate of 5G mobile phones is expected to be around 0.3%. According to the development of 3G and 4G, the popularity of 5G will take more than 5 years, and related industries will develop slowly in twists and turns. By 2025, the penetration rate of 5G mobile phones is expected to exceed 90%.

Forecast of Smartphone Sales and 5G Smartphone Penetration



The heat dissipation requirements of 5G mobile phones far exceed those of 4G mobile phones, and the standard of thermal conductive materials is also higher. In order to improve the heat dissipation effect, the thickness of the graphite material will be increased, the composite type and the multilayer heat conductive film will be widely used, and the price of the graphite heat conductive material will also be increased by 2 to 3 times. When the penetration of 5G mobile phones exceeds 18%, it will create more than $1 billion of market value for the graphite thermal conductivity market.

Market Scale shall Increase with Average Price



A Great Chance for Chinese Enterprises

The thermal conductive graphite film was first used in consumer electronics in 2009, and began to be used on a large scale in smartphone manufacturing in 2011. The graphite thermal conductive material industry is technology-intensive and has a high concentration. Main manufacturers are Japan’ Panasonic and KANEKA, America’s GrafTech, and China’s Tanyuan Technology and Jones Technology.

The main downstream customers of thermal conductive graphite films are large consumer electronics manufacturers such as Huawei, Samsung, and Apple.

These companies have very high selection criteria for suppliers, and the evaluation period generally exceeds 2 years. But as of the first quarter of 2019, the smartphone market has fallen for six consecutive quarters, and the downstream cost pressures have forced these companies to look for more cost-effective suppliers. China's thermal conductive materials company Tanyuan Technology has passed the evaluation of some famous mobile phone companies such as Samsung, Huawei and OPPO. Jones Technology has also got certifications from Huawei and Samsung.

Affected by the global economic environment, the average gross profit of graphite thermal conductive material enterprises in 2019 has declined to varying degrees, and the revenue of most enterprises has also declined. The first quarter financial report of 2019 showed that the growth of Jones was not obvious, and Tanyuan even suffered losses.

Sales Revenue of Tanyuan and Jones Both Decreased



Tanyuan Had a Loss in 2019 Q1



Affected by large enterprises’actively deploying mass production of 5G mobile phones, the revenues of Jones Technology and Tanyuan Technology in the second quarter increased.

Related Companies Benefited from the Development of 5G



In the future competition among suppliers of 5G mobile phone companies, Research & Development capability will become an important weapon.

R&D Investment is for the Innovation of an Enterprise



The R&D cost of Tanyuan Technology in 2019 is expected to account for about 8% of the total operating costs, which is nearly 3 percentage points higher than the 5% in 2018. This R&D cost is comparable to that of Jones Technology, and will benefit the sustainable development of Tanyuan technology in the years to come.

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