The front-end RF technology mainly focuses on power amplifier (PA), low noise amplifier (LNA) and filter. At present, the global market is dominated by skyworks, qorvo, Broadcom and Murata. Skyworks has the highest market share in PA, LNA and other power amplifier related components, but it is gradually caught up by qorvo. About one third of the two companies account for the market, while Broadcom accounts for about 20% and Murata for 5 ~ 6%. In total, the four companies account for more than 90% of the PA, LNA and other power amplifier markets.
In terms of filter, it can be divided into two main technologies: surface acoustic wave (SAW) and bulk acoustic wave (BAW) filter. According to different structures, saw is more mature and simple to manufacture, which is relatively simple compared with BAW. However, BAW filter is more suitable for working in high-frequency environment above 3GHz. At present, half of the saw filter market is occupied by Murata, about 9% by skyrworks, and the rest is divided by large manufacturers such as solar induced power, TDK and qorvo; BAW filter is led by Broadcom, accounting for more than 85% of the market, and qorvo accounts for about 8%.
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There are obvious differences in the business direction of the four major manufacturers. Skyworks and qorvo mainly generate revenue from front-end RF modules, which are manufacturers with concentrated product types; Broadcom's product portfolio is quite diverse. In addition to the front-end module, it also includes switch chip, Wi Fi SOC and communication IC. Recently, it has actively developed towards enterprise software and gradually faded out of the front-end RF market; Murata mainly focuses on SAW filters, passive components, ceramic components, etc. in addition, communication module packaging also accounts for a large part of its revenue.
Among the four major factories, Broadcom has the highest total assets, which increased significantly to US $674.9 in 2019, followed by Murata, with a total of 2.2 trillion yen (about US $20.59 billion), qorvo and skyworks, with us $6.52 billion and US $5.09 billion respectively. However, Broadcom is also the most leveraged company. Generally speaking, it hopes to control it below 50% based on the asset liability ratio (the ratio of total liabilities to total assets). However, Broadcom will reach 63% in 2019, which is nearly twice as high as 33.4% of qorvo, the second highest, and only 16.2% of skyworks.
The premium caused by M & A will be included in goodwill. Therefore, if the goodwill is too high, the pressure of annual amortization expense will be higher. Broadcom's goodwill accounted for 45.4% of total assets in 2017, reaching more than half by the end of 2019. The amortization expense of related acquired intangible assets has increased year by year, reaching US $4 billion in 2019, However, Broadcom's annual pre tax net interest rate increased from 10.3% in 2017 to 20.3% in 2019.
Broadcom intends to gradually enter the enterprise software market from the wireless communication industry through the acquisition of growing enterprises. For example, it acquired the enterprise software company CA technologies with nearly US $19 billion in 2018 and completed the enterprise security business of Symantec in November 2019, spending US $10.7 billion through benign and future asset acquisition, Broadcom has instead become the most comprehensive product portfolio among the four manufacturers, with the lowest exposure to a single company.
In contrast, qorvo's goodwill reached 37% of its total assets, which was US $2.42 billion in 2019. The main source was the merger of TriQuint semiconductor and RF micro devices in 2015, and the annual amortization expenses were as high as US $400 million to US $600 million. These expenses put great pressure on qorvo's finance. From the merger to the first quarter of 2019, it was in the state of net loss for most of the time. In terms of the intangible asset structure of the other two manufacturers, skyworks's goodwill is about one quarter, the amortization expense is about US $300 million and decreases year by year, while Murata's goodwill, the lowest, accounts for about 4%, which does not put much pressure on its operation.
Since the long-term liabilities are mostly used for long-term investments such as acquisition and plant expansion, taking the long-term liabilities of each company in 2016 as the base period, it can be observed that the four major factories have increased significantly, especially Broadcom and qorvo, with the highest increase of 1.81 times and 1.77 times respectively, and skyworks and Murata have also increased by about 1.17 times; In addition, the cash holdings of qorvo and Murata are also increasing. Among them, qorvo was US $840 million in 2017 and reached nearly US $1.1 billion by the end of 2019. Murata also increased from 149 billion yen (about US $1.37 billion) in 2017 to 234.9 billion yen (about US $2.16 billion) in 2019, which also shows the possibility of cash M & A or plant expansion of the two companies in the future.
In terms of revenue, most of skyworks and qorvo's product portfolios are aimed at front-end RF modules. Skyworks's average quarterly sales revenue is $900 million and qorvo's is $760 million. However, qorvo's growth in sales revenue tends to gradually surpass skyworks. In 2019, skyworks and qorvo's revenue were $3.3 billion and $3.14 billion respectively.
Murata's average sales revenue per unit is 365.63 billion yen (about US $3.36 billion), and the sales revenue in 2019 is 1.5 trillion yen (about US $14.04 billion). However, Murata's product line is quite diverse, and the sales revenue related to communication modules is 425.5 billion yen (about US $3.91 billion), including liquid crystal polymer (LCP) soft board and Wi Fi and Bluetooth modules. Broadcom's product portfolio is broader. Bloomberg estimates that Broadcom's front-end RF sales revenue in 2019 is about $2.2 billion, accounting for less than 10% based on the total sales revenue of $22.6 billion in the current year.
From the front-end RF patents published by various operators, we can understand the technical advantages of various manufacturers and the possible layout of manufacturers in the future. From the number of patents published from 2017 to 2019, skyworks has the largest number of 2360, followed by Murata, with a total of 1595, and qorvo and Broadcom have 937 and 334 respectively.
From the number of patents in recent three years, it can be seen that Murata has grown in this regard, from 157 to 875, with a range of 5.57 times, followed by qorvo, from 272 to 385, only 1.42 times. It can be seen that Murata attaches importance to RF technology; Skyworks's patent publication decreased from 802 to 684 in 2018, but rebounded to 874 in 2019.
It is worth noting that the layout of Broadcom related patents has a significant downward trend, from 174 in 2017 to only 63 in 2019. Although Broadcom announced that it had signed a long-term supply agreement with apple worth about US $15 billion in January 2020, including RF components, Broadcom did gradually fade out of this market in the past period.
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The following summarizes the patents issued by the four companies from 2017 to 2019 and summarizes the key layout directions of these companies. Since skyworks and qorvo are front-end RF index manufacturers, the main cooperative Patent Classification (CPC) is extracted from the two large companies, and then compared with the patent layout related to Broadcom and Murata.
Compared with skyworks and qorvo's patented layout, PA related circuit design, envelope tracking (ET) and related efficiency improvement technology are at most. As PA is one of the components with the largest power consumption in the whole wireless communication device, poor control is likely to cause too high or even overheating power demand of the system, Envelope tracking technology is an important algorithm used to control PA power consumption in front-end RF systems.
In terms of technical differences between the two major manufacturers, skyworks's technical strengths are module integration and front-end RF active and passive components. Qorvo is specialized in IC related technology and semiconductor material manufacturing process. From the proportion of patents, it can be clearly seen that skyworks integrates PA, filter and other component modules, while qorvo belongs to wafer IC packaging and filter technology.
In the layout of military radar, base station and Aerospace Satellite, qorvo focuses on the layout of epitaxial technology, especially for gallium nitride (GAN) and other semiconductor processes and IC design suitable for high-frequency working environment. Its related technology has been developed for about 20 years; Although skyworks lacks relevant semiconductor technology, its waveguide and coupler technology are also widely used in military, infrastructure and other markets.
Judging from the recent product release, qorvo has been active in the military aerospace industry through Gan technology, including syrlinks LEO satellite, and cooperated with Lockheed Martin, Raytheon and other U.S. military anti artillery radar and electronic warfare equipment. In addition, Gan technology is also quite suitable for mechanical power management, charging device and other markets.
Skyworks has also introduced relevant components and LNA products through waveguide and coupler, combined with its own gallium arsenide (GaAs) wafer technology. However, due to the lack of Gan related high-frequency PA technology, there is not much development information in relevant markets.
In other related patents, qorvo biotechnologies, a subsidiary of qorvo, uses BAW technology to develop detection platforms for microorganisms, viruses or specific chemicals. Because the filter itself is a kind of micro electro mechanical systems (MEMS), MEMS is often used for biological detection and sensing elements. At present, it cooperates with zomedica, an animal diagnosis and drug company, An immune detection instrument for cats and dogs was developed and launched in the fourth quarter of 2019.
Finally, it is observed that Qualcomm and skyworks jointly applied for seven patents from 2017 to 2019, all of which are aimed at front-end RF core technologies such as PA envelope tracking, system correction and related circuit design. Therefore, it can be inferred that Qualcomm's recent big action to develop front-end RF includes the purchase of rf360, a joint venture with TDK, and the supply of Samsung The technology behind Motorola's flagship 5g millimeter wave mobile phone RF module may have a very close cooperation with skyworks.
Compared with the above patents, it can be seen that Broadcom has quite little mastery of PA technology. In particular, no patents directly related to PA have been published from 2017 to 2019, and the overall development of front-end RF technology has gradually stagnated. Murata, on the other hand, has an amazing growth rate in the number of patents published every year from 2017 to 2019, increasing from 23 to 157, accumulating a total of 313. Secondly, it can be found that Broadcom and Murata have a large proportion of patents in the integration and packaging of front-end modules. In addition, Murata also master many filter technologies.
In fact, it can be seen from here that Murata used to assemble and integrate modules in the RF field, and his mastery of PA is not high. Most of the new products published in 2020 are still passive components. However, as PA is the core technology of front-end RF, in addition to improving the module integration ability, Murata is also actively developing RFID, Wi Fi and Bluetooth communication technologies, For example, its owliq series products cooperate with GE Healthcare in Japan to locate valuable instruments and personnel in the hospital using systems such as Bluetooth and RFID.
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Broadcom's front-end RF patents are distributed in a decentralized manner. In addition to the core CPC patents, it can be seen that most of the layout revolves around the entire network system architecture. In fact, Broadcom's technical strength lies in CPU design, including switches, Ethernet chips, Wi Fi and Bluetooth modems. Therefore, front-end RF is more like an auxiliary role than CPU and enterprise software, The front-end RF market is also relatively limited, so it is not difficult to see that Broadcom intends to sell relevant departments and focus on markets with greater potential.
On the other hand, Murata is developing towards RFID and publishing related products at CES 2020. Although Murata actively develops its own PA technology, its familiarity with 3GPP standards still lags behind skyworks and qorvo. Therefore, Murata is actively moving towards non cellular Internet of things standards such as Wi Fi, Bluetooth and ZigBee. RFID is combined with relevant wireless communication technologies to provide services such as smart home Solutions such as asset equipment management and Internet of things for enterprises.
The technology of front-end RF module directly determines the quality of wireless communication. With the evolution of 5G and HF communication, its importance will be higher and higher. Taiwan Netcom has always been a catch-up role. Therefore, understanding the market development through the international factory's future layout will help Chinese mainland and Taiwan's communication semiconductor manufacturers to catch up with the wave of communication technology generation alternation.
