Behind the tight supply of 4G chips: anticipation of high technical requirements

From the beginning of this year to the present, many mobile phone manufacturers have mentioned the problem of tight supply of 4G chips, especially supporting single-chips with five modes. The reasons behind the new mobile phones launched by many mobile phone manufacturers are in short supply and forced to be hungry. The reason behind this is not simple.

Uncertain expectations for 4G demand

One of the reasons for the lack of grasp of the rhythm of China's 4G.

On December 4, 2013, the Ministry of Industry and Information Technology officially issued the first TD-LTE license to China Mobile, China Telecom and China Unicom, which opened the curtain for China's 4G era.

"You guessed it started, but you can't guess what the end is."

For the chip industry chain, the accurate grasp of market demand has always been a problem, and the chip industry has always had a cyclical demand. Everyone knows that China will turn to 4G, but when and how fast, this information is unclear. Considering the development trajectory of domestic 3G, the market expects that the initial demand growth of 4G should be slow.

A related person in charge of Lianxin Technology, who was not willing to be named, said in an interview with C114: "Although domestic 4G talks for many years, this year's demand surge is indeed beyond the expectations and imagination of the industry. Domestic 3G starts at an international level. Last night, it is expected that 3G will continue for a while, but in the first half of the year, the development speed of 4G is beyond the expectations of everyone."

Marvell mobile business sales and marketing director Ai Hezhi said that Marvell has been paying close attention to the Chinese market. Long time ago, it conducted TD-LTE field test with China Mobile, so Marvell's preparation for 4G is still sufficient, but PXA1920 IV The nuclear processor also encountered tight supply problems in the first two or three months of commercial use.

Ai Hezhi stressed that this situation is more common at the beginning of the new market, and Marvell has already solved this problem.

Steve Owen, executive vice president of global sales and marketing at NXP, also said in an interview with C114, "Last year we all know that China will be on LTE, but the demand in the second half of 2013 is almost incomparable with the demand in the first half of 2014. The demand for half a year is four times the original expectation."

According to the 4G user data released by China Mobile in the first half of the year, the number of new users is accelerating on a monthly basis. According to previous reports from C114, the conversion rate of China Mobile 4G terminals to 4G users is now as high as 79%, much higher than 3G. The conversion success rate when it was just on. In particular, after China Mobile lowered its 4G package price in May this year, 4G subscriber growth has entered a fast lane.

Leading operators can accelerate 4G, but chip capacity can not be improved by upgrading. As a result, the semiconductor supply chain itself has the cyclical characteristics of demand. The chip manufacturing equipment used in the consumer electronics industry is very expensive. The investment in equipment is often the largest investment of chip manufacturers. If the equipment is purchased, the demand information is wrong. If the operating rate is insufficient, then the manufacturer may be dragged down. Therefore, chip manufacturers are generally very cautious, to determine the market has a stable demand before investing in equipment.

Second, the chip manufacturers from the purchase of equipment, commissioning to production cycle is generally 3 to 9 months, the chip production cycle is generally 10 to 13 weeks, such a time difference will make it difficult to cope with the sudden surge in demand.

High requirements make Qualcomm a sole responsibility

In addition to the sudden acceleration of schedule and rhythm, the tight supply of 4G chips is also related to the high standards and strict requirements of leading operators.

In 2013, China Mobile's first batch of TD-LTE terminal bidding, insisted on single-chip five-mode ten-frequency at the beginning; earlier this year, China Mobile reiterated its request for 4G customized terminals: since May 31, 2014, the first round of testing The LTE custom handset needs to support five modes (GSM/TD-SCDMA/TD-LTE/WCDMA/FDD LTE).

"There are not many suppliers that can provide 4G sets of chips. They are also Qualcomm, Marvell, MediaTek, Spreadtrum, and Lianxin. However, compared with Qualcomm, other companies are technically and manufacturingly. The scale is not adequately prepared."

This means that the market that was originally supported by the five companies has become a Qualcomm one. There are so many porridges, naturally it is impossible to meet such a large demand.

Shenglinghai, research director of Gartner, a well-known market research institute, said that when 4G just started, Qualcomm accounted for nearly 90% of the market. Qualcomm’s domestic rival, MediaTek’s 4G chip, was not too late, but their first generation The 4G chip is not a single chip, but a combination of an independent baseband chip and an AP. The cost of the two chips is not competitive. It is not very competitive. From the standpoint of MediaTek, it will not More preparation for this dual-chip supply will definitely push the single-chip solution to market as soon as possible, which is one of the most important reasons for the tight MTK chips on the market.

However, Ai Hezhi expressed doubts about this proportion. He quoted data from domestic research institute Sino, saying that “in the first half of 2014, Marvell achieved the top two leading positions in the Chinese market, in the mobile TD-LTE market in China. The share is nearly 30%."

He added that the current Marvell 4G LTE single-chip PXA1920 solution has nearly 50 models in the thousand and thousand dollars, including Coolpad, Lenovo, Samsung, ZTE, Huawei and so on.

In Shenglinghai's view, the share of the first half of the year is not a competition for complete technical strength, but also related to the strategy of chip manufacturers. Because everyone is in the process of alternating old and new 3G and 4G chips, Qualcomm is a new and old exchange, MediaTek is also a new chip just beginning, is undergoing a process from marketing to mass production, so, in the new chip is Before the market is fully accepted, there will definitely be a shortage of their supply.

In addition, there is the listing of the iPhone 6, Sheng Linghai added that Apple transferred the original Samsung OEM to TSMC, which led to tight production capacity of TSMC.

In the case of tight production capacity, enterprises are of course the priority to serve large customers. Lv Qianhao, general manager of ZTE's terminal strategy development department, also confirmed that the 4G chip of mobile phone manufacturers is not tight, mainly determined by three points: one is the size of its 4G products, because the size determines your ability to negotiate with chip manufacturers. Second, the type of product composition, chip manufacturers do not want their products just come up, sell a low price of three or four hundred dollars, so the higher the proportion of your product's high-end composition, the stronger the negotiation ability, chip manufacturers also More willing to work with you.

The situation will be alleviated in the fourth quarter

From the results of China Mobile's TD-LTE collection in the first half of the year, Marvell's share after Qualcomm is a pretty good start.

Ai and Zhi said that in the second half of the year, Marvell will focus on the 64-bit five-mode single-chip solutions PXA1926 and PXA1928, focusing on the entry-level and mass market, and further exploring the open market and e-commerce market beyond the carrier market.

Liu Jitang, vice president of Lianxin Technology, said in an interview with C114 that Lianxin's first five-mode single-chip LC1860 is being sent to the test and is expected to be mass-produced in the fourth quarter.

Zhou Weifang, director of market promotion for Spreadtrum Communications, said that the 4G three-mode products provided by Spreadtrum to Lenovo and Coolpad have been tested in the network. The 4G five-mode products are expected to be mass-produced by the end of this year.

Haisi's chip is a step forward in domestic chip manufacturers and has been applied to Huawei's various 4G terminals. However, according to C114, Huawei mobile phones using Hisilicon chips are mainly sold in the domestic market. Some of the restrictions, Huawei's products sold overseas are still based on Qualcomm chips. However, Haisi currently only supplies Huawei mobile phones, which has no effect on the supply of the chip market. This is similar to Samsung.

Lv Qianhao, head of ZTE's terminal market strategy, said that ZTE has launched a 4G baseband chip code-named "Xunlong 7510". The products of this Xunlong core Q mobile phone will be gradually released for sale.

MediaTek has a positive attitude towards the participation of many domestic chip manufacturers in the battlefield: "With the participation of domestic chip manufacturers, the competition in the 4G market in the second half of the year will become more intense, and the situation of a single chip manufacturer will change. End customers and consumers will have more choices, which will help the entire market to develop in a benign and fair direction."

Ai Hezhi also said, but Marvell is also happy to see more and more manufacturers join the chip market competition, which will give customers more choices, make the overall cake bigger, and manufacturers can find their own position.

However, even if domestic manufacturers follow suit in the second half of the year, Shenglinghai still believes that Qualcomm's leading edge is unshakable in the short term. After all, it takes time to accumulate, technology accumulation and process accumulation, which are not achieved overnight.