User needs and national investment in two-wheel drive, 5G leads the new era of PCB communications development As early as the 4G era, global mobile Internet traffic broke out. According to statistics from the Ministry of Industry and Information Technology of China, domestic mobile Internet traffic has doubled year after year, much higher than the average global 15% increase. speed. Application scenarios such as high-definition video, Internet of Things (IoT), and VR/AR are gradually emerging, bringing with it a strong demand for enhanced mobile broadband, mass connectivity, low latency and high reliability communication technologies. As a breakthrough mobile communication technology, 5G will lead the new era of communication development under the two-wheel drive of user demand and national investment.

 

 

 

After a period of ten years of mobile communications, China is expected to lead the world in the 5G era after experiencing “2G following, 3G breakthrough, and 4G synchronization.”

 

 

 

The construction of 1G~4G mobile communications in China lags behind the rest of the world, but they continue to overtake them. In 4G era, China's dominant TDD communication standard will become the mainstream 5G system. In the 5G era, China took the initiative to set up an IMT-2020 promotion group to take the power of the entire industry chain and actively promote the development of 5G technical standards, which is expected to achieve dual-leadership in technology and market.

 

 

 

In 2018, China will enter the key turning point for 5G, and the time of business is expected to exceed expectations.

 

 

 

The IMT-2020 promotion team of China is divided into two steps: the technical R&D test (2015~2018) and the product R&D test (2018~2020) for the 5G test plan. In 2017, China has built the world's largest 5G field testing base in Huairou, Beijing. On January 16, 2018, China's IMT-2020 Promotion Team released the "3rd Stage Specification for 5G Technology R&D Experiments." China Mobile announced that it will launch pilot projects in 12 cities across the country. China Unicom has submitted test cities for young people in 7 cities. , And has completed the construction of outfields in Shanghai and Shenzhen. We predict that the domestic large-scale 5G pilots will be launched in the second half of 2018 and will enter the trial commercial phase in 2019, and the issuance of 5G formal commercial licenses may exceed the expectation.

 

 

 

Take history as a mirror, look forward to the future pattern of 5G industry chain from 3G/4G

 

 

 

The upgrading of 5G networks and terminal hardware and software will bring about profound changes in the industrial chain and industry landscape. Operators: The right to speak is tilted toward China. In the 3G/4G era, the global operator market is continuously integrated and concentrated. In the 5G era, Vodafone, China Mobile and other mainstream operators are strong, Hengqiang, and Chinese operators will have a global voice. The main equipment business: strong lead the industry chain, the upstream device ushered in a great opportunity. Huawei, ZTE, Ericsson, and Nokia are all four. In the 5G era, Chinese manufacturers will further squeeze the market share of their European counterparts and bring opportunities for the localization of upstream devices. RF devices: There are many 4G participants, and the gross margin of the traditional RF device industry is lower. 5G Due to Massive MIMO applications, 2/3 of the added value of the antenna will be transferred to the PCB on which the antenna element is mounted. According to the knowledge of Jiepangbang, a global supplier of PCB sample cards, combining ultra-dense networking technology will bring new opportunities for PCB and high-frequency copper-clad laminates. Optical device industry: As the 3G/4G cycle fluctuates, the overall industry concentration continues to decrease. In the 5G era, the cycle of operator network investment and Internet data center investment overlaps, and Chinese manufacturers have emerged as a new force. Optical fiber cable industry chain: It presents a pyramid-type industry structure. Manufacturers with integrated light bar, optical fiber and optical fiber cable production capacity will continue to maintain their competitive advantages and industry concentration will be further enhanced.

 

 

 

Investment Advice

 

 

 

We expect that the 5G scale construction will start in 2019~2020. The scale of 5G investment is expected to exceed 4G, and the capital expenditure of operators will continue to rise after 2019, and will continue to increase as the demand of the 5G market increases. We propose to pay attention to: 1) 5G leader: ZTE; 2) 5G radio frequency leader: Shengyi Technology; 3) 5G optical communication: Fiberhome Communications, Zhongji Xuchuang, Xinyisheng, focusing on Vision Technologies and Hengtong Optoelectronics; 4) 5G radio frequency: Shanghai Electric (PCB), Shennan Circuit (PCB), Dongshan Precision (filter/antenna), Sanan Optoelectronics (PA compound semiconductor), and Flytron (antenna vibrator).

 

 

 

risk warning

 

 

 

The commercial progress of 5G is less than expected, and the risk of market system volatility.