Behind the small mobile phone camera, there is an invisible champion of Chinese local chip design.
Recently, Juchen semiconductor Co., Ltd., a smartphone camera EEPROM chip supplier with the largest market share in the world, was listed on the Science and Technology Innovation Board. Its self-designed EEPROM chips have been widely used in major mainstream mobile phone brands, such as Samsung, Huawei, vivo, Xiaomi, OPPO, etc. It can be said that the mainstream models we are using are silently supported by the company’s products.
EEPROM (Erasable Programmable Read-Only Memory) refers to a memory chip that does not lose data after a power failure. Due to its stable data storage and strong versatility, it has been widely used in smartphone camera modules, LCD panels, and Bluetooth modules. , communications, white goods, automotive electronics, industrial control and other fields.
As 5G commercialization drives the replacement of smartphone stock, and the multi-camera application of mobile phone cameras becomes more and more extensive, the market demand for EEPROM chips has increased significantly; at the same time, the requirements for performance will also become higher and higher. So, under this wave, will Juchen Semiconductor still be the biggest beneficiary?
The king of mobile phone camera memory chips
Juchen Semiconductor adopts a Fabless (no factory) business model: the company only engages in chip design and sales, and the rest of the links are entrusted to wafer manufacturing companies and packaging and testing companies.
In this mode, Juchen Semiconductor mainly designs and develops three types of products: EEPROM, smart card chip and voice coil motor driver chip. It is worth noting that since 2017, the revenue brought by EEPROM has accounted for more than 80% of the total revenue.
As a non-volatile memory chip, EEPROM plays an important role in the field of long-term data storage. However, in addition to EEPROM, non-volatile memory chips also include NOR Flash and NAND Flash. This raises doubts: Will EEPROM be replaced when all three categories are suitable for long-term storage of data?
Based on this, the Shanghai Stock Exchange also asked Juchen Semiconductor to “explain the possibility of EEPROM being replaced by the other two major products” in the inquiry.
In the reply, Juchen Semiconductor compared the indicators of these three types of products:
From the above table, it can be found that these three types of products have performance and cost advantages in different fields, and meet the storage requirements of different application scenarios. The possibility of a certain technology being replaced is low.
In the past, the EEPROM market was dominated by European, American and Japanese companies, mainly representing companies such as STMicroelectronics and Microchip Technology. However, these companies are listed companies in the field of large integrated integrated circuits, and EEPROM is only one of many product lines, so their focus in this field is limited. This brings opportunities to domestic brands such as Juchen Semiconductor and Shanghai Fudan. In recent years, domestic brands have begun to emerge in the EEPROM market.
It is worth noting that Juchen Semiconductor and overseas competitors focus on different EEPROM applications. Overseas companies have a high market share in communications, white goods and other fields, especially in the field of automotive-grade EEPROM.
Automotive-grade EEPROMs require more reliable performance than industrial-grade EEPROMs. Taking temperature adaptability as an example, industrial-grade EEPROM adapts to a temperature range of -40°C-85°C, and automotive-grade EEPROM can be divided into 4 grades according to different temperature adaptability: A3 grade (-40°C-85°C). °C), A2 class (-40°C-105°C), A1 class (-40°C-125°C), A0 class (-40°C-145°C). At present, international companies already have A0 level technical level, while Juchen Semiconductor only has A2 level.
According to CCID Consulting’s forecast, the global demand for automotive-grade EEPROM in 2018 will increase by 10.8% year-on-year. Based on this, this fundraising, A1 grade automotive-grade EEPROM will become an important research and development direction of Juchen Semiconductor.
It is undeniable that although there is a gap between Juchen Semiconductor and the international advanced level in the field of automotive-grade EEPROM, Juchen Semiconductor has occupied the first-mover advantage in the application of smartphone camera EEPROM.
Juchen Semiconductor’s EEPROM products have been used in the camera modules of Samsung smartphones since 2012, and have been recognized by Samsung. After tasting the sweetness in the cooperation with Samsung, Juchen Semiconductor has regarded the mobile phone camera as the key application field of EEPROM products.
According to the prospectus, from 2016 to 2018, the sales volume of EEPROM used by Juchen Semiconductor in mobile phone cameras accounted for 78.10%, 84.40% and 89.20% of the total sales volume of EEPROM respectively, and the proportions increased year by year, while the sales volume of EEPROMs increased year by year. The average unit price dropped from 0.37 yuan in 2016 to 0.31 yuan in 2018. It can be seen that the continuous reduction of costs may become the key to its larger market share.
According to CCID Consulting data, in the segment of mobile phone camera EEPROM, Juchen Semiconductor has become the world’s number one EEPROM product supplier in 2018, occupying 40% of the global market, and its EEPROM products have been used in Samsung, Multiple series of mainstream mobile phone brands such as Huawei, Xiaomi, OPPO, vivo, etc. This means that Juchen Semiconductor has found a path suitable for its own development in the wide range of EEPROM applications and has become a leader in this field.
Supporting sales form a differentiated competitive advantage
In terms of business, in addition to EEPROM products, Juchen Semiconductor has developed two major businesses, voice coil motor driver chips and smart card chips, based on existing customers and technology accumulation.
Among them, the voice coil motor driver chip is a device for automatic focusing in the camera module, which is mainly used in the field of smartphone cameras, and is aimed at the same customers as EEPROM products. Smart card chip is a kind of special chip that combines EEPROM technology with downstream specific applications, mainly used in transportation cards, access control cards, campus cards, etc.
In recent years, the revenue share of these two major businesses has begun to decrease year by year. In this regard, Juchen Semiconductor actively explores new sales methods. For example, in response to the decline in the sales of voice coil motor driver chips in 2018, Juchen Semiconductor will sell EEPROM and voice coil motor driver chips to downstream smartphone camera module customers. Compared with other companies in the market, this sales method has formed a differentiated competitive advantage.
According to the prospectus, Juchen Semiconductor has already carried out project cooperation with downstream module manufacturers. The manufacturer predicts that the procurement volume of voice coil motor driver chips under this project will exceed 30 million.
In addition, Juchen Semiconductor closely interacts with high-quality enterprises in the industrial chain: Upstream of the industrial chain, Juchen Semiconductor has established stable cooperative relations with wafer manufacturing plants and packaging and testing plants such as SMIC and Jiangyin Changdian, in order to expand Production provides a solid backing; in the downstream of the industry chain, Juchen Semiconductor’s customers include industry leading companies such as Foxconn, Samsung, BOE, etc. High-quality customer resources can drive the growth of downstream demand and promote the company’s profitability to continue to improve.
The battle for high-capacity chips under the wave of 5G multi-camera
2019 is the first year of 5G commercial use, and major mobile phone manufacturers such as Samsung, Huawei, and Xiaomi have successively released 5G models that can be mass-produced. The full outbreak of 5G is expected to drive the smartphone market to usher in a new “wave of replacement”. According to CCID Consulting, the global smartphone shipments in 2018 were about 1.405 billion units, and it is expected that the global smartphone shipments will reach 1.645 billion units by 2023.
In addition, with the popularity of dual cameras and multi-cameras, a mobile phone will require multiple EEPROM chips. According to CCID Consulting, in 2018, the global dual-camera smartphone accounted for 37.01% of smartphones. It is estimated that by 2020, the global proportion of rear dual-camera smartphones will further increase to 70.62%. The proportion of rear-mounted multi-camera smartphones will rapidly increase from 9.64% in 2019 to 40.73% in 2023.
The outbreak of the 5G “replacement wave” and the popularity of multi-cameras are undoubtedly a “good news” for manufacturers in the upstream and downstream of the camera industry chain. Taking the camera module company Oufei Optical as an example, its mobile phone camera module revenue in 2019H1 increased by 39.68% year-on-year, and its shipments reached 292 million, a year-on-year increase of 23.20%. The growth of the downstream market drives the strong demand for upstream EEPROM products: In 2018, Juchen Semiconductor’s mobile phone camera EEPROM sales reached 8.999 billion, and in 2019, from January to June alone, the sales reached 6.095 billion .
However, in the face of the huge incremental market, in addition to rejoicing, we still need to clearly realize that although the market demand for EEPROM is growing steadily, it also has higher expectations for performance – pixel upgrade of smartphone camera modules , At the same time as the function is improved, more and more data needs to be stored inside the module, and the low-capacity EEPROM will not be able to meet the storage requirements.
At present, the EEPROM capacity used in smartphone camera modules is mainly 64Kbit, and some high-end models have applied high-capacity products such as 128Kbit and 256Kbit. In the future, as consumers’ performance requirements for cameras are gradually upgraded, the market share of high-capacity EEPROMs will continue to increase. It can be said that the first companies to develop cost-effective and high-capacity chips will have a dominant advantage in the wave of 5G and multi-cameras.
However, by comparing the performance indicators of domestic and foreign competitors’ 512Kbit large-capacity EEPROM products, it can be found that there is still a gap between Juchen Semiconductor and STMicroelectronics and other international leading companies in key performance indicators such as data retention time.
Based on this, Juchen Semiconductor plans to invest nearly half of the funds raised on the Science and Technology Innovation Board for the development and iteration of EEPROM, of which high-capacity EEPROM is its key research and development direction.
In the past, Juchen Semiconductor was able to gain a large market share, which has a lot to do with its preemptive occupation of the EEPROM application field of smartphone cameras. Now, under the wave of 5G and multi-camera, Juchen Semiconductor wants to firmly sit on the throne of “the king of mobile phone camera memory chips”, not only relying on “seizing the opportunity”, but more importantly, breaking through the technical bottleneck of high-capacity EEPROM , to meet the higher expectations of consumers for product performance.
Author: Ma Shiqing
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