China is the world’s largest home appliance producer, the market share of domestic home appliance chips has increased significantly in recent years, Gree, Midea, Hisense, Grants and other home appliance leaders have also been involved in the chip field, domestic home appliance chips in the rapid growth period. (power module) localization rate has exceeded 10%.
“The development of home appliance frequency conversion and intelligent functions has brought opportunities for the semiconductor industry.” Ouyang Huai said that the current application in air conditioners, refrigerators, washing machines, range hoods, dishwashers and other white goods chips are mainly four categories: one is the micro control unit (MCU), the second is the power device (IPM, IGBT, MOSFET, etc.), the third is the communication module, and the fourth is the sensor.
MCU, for example, the track grew rapidly last year, mainly due to the key chip companies in the previous years of paving, verification, last year ushered in the explosion of shipments. Ouyang Huai said, but this year, some domestic chip manufacturers by the technical barriers, price issues and the demand environment led to the localization of MCU this year compared to last year will slow down the process.
At present, the demand for MCU of the three major domestic white goods (air, ice and wash), from 570 million in 2017 to more than 700 million in 2022, air conditioning MCU accounted for more than 60%. A variety of different functions (main control, inverter, display, touch) MCU can now even be integrated into a high-performance MCU, so MCU demand growth rate is not as fast as expected, but the unit value is increasing.
In contrast, the domestic market of IPM outperformed MCU this year. Ouyang Huai said that IPM has maintained a rapid development momentum in the past two years, and the release of domestic production capacity this year will help alleviate the shortage of production capacity. The proportion of inverter of air conditioner fan is rising rapidly, corresponding to the demand for small power IPM ushered in structural growth. The upswing in sales of inverter washing machines has also boosted the demand for IPM.
Industry online data show that the demand for domestic home appliance IPM increased from 130 million in 2017 to 280 million in 2022, more than doubling in six years. the demand for IPM is mainly concentrated in air conditioners and washing machines, both accounting for more than 95%.
From the perspective of market players, the supply market of domestic home appliance MCU, Japan, Germany, China and the United States companies have the largest share. top4 suppliers occupy more than 76% of the market share, mainly Japan Renesas Electronics, Germany Infineon, the United States Texas Instruments (TI) and STMicroelectronics (ST); in addition, the United States Micro Chip (Micro Chip), the Netherlands NXP (NXP), Japan Toshiba also has a supply; Zhongying Electronics (300327.SZ), BYD, GREE zero border, Mei Ren Semiconductor and other domestic enterprises also began to perform, currently accounting for more than 15%.
Zhongying Electronics’ semi-annual performance forecast this year revealed that net profit attributable to the mother of the first half rose 65%-70% year-on-year to 250 million – 260 million yuan, benefiting from sales growth and improved gross margins. In the first quarter of this year, its revenue increased by 51.44% to 464 million yuan and net profit attributable to the mother increased by 90% to 128 million yuan, with revenue from micro control chips and OLED display driver chips accounting for 80% and 20% respectively.
In the domestic home appliance IPM supply market, the domestic chip share is also increasing. TOP3 enterprises occupy more than 60% of the market share, mainly for Mitsubishi Electric Semiconductor, Sanken Electric, Infineon, etc.; domestic Silan Micro (600460.SH), Star Semiconductor, GREE Xin Yuan, Mei Ken Semiconductor and other enterprises also emerged, accounting for about 10%.
Silan Micro 2021 annual report revealed that its IPM module revenue last year exceeded 860 million yuan, an increase of more than 100% year-on-year, has been applied to home appliances and other inverter products, including air conditioners, refrigerators, washing machines, range hoods, fans, etc. In 2021, many domestic mainstream manufacturers used more than 38 million Silan Micro IPM modules in inverter air conditioners and other white goods machines, an increase of 110% year-on-year.
Home appliance leading chip self-sufficiency increased
The self-supply of chips by leading Chinese home appliance companies such as Midea and Gree is increasing significantly year by year.
Midea Group Chairman and President Fang Hongbo said in May this year at the 2021 Annual General Meeting that Midea’s Meiren Semiconductor plans to ship 70 million units this year and 300 million units next year, hoping to basically solve the chip supply problem in two or three years through domestic foundry and other means.
According to the United States Group 2021 annual report, the United States chip layout mainly covers MCU, IoT (Internet of Things), power, power chip four series, 2021 mass production chip breakthrough 10 million, and gradually to the industrial control and automotive field chip products to expand, plans to achieve large-scale mass production of chips and sales scale breakthrough in 2022.
Meiren Semiconductor’s chip business after four years of development, its MCU products have covered the main control MCU, touch MCU, inverter MCU, the future product path planning is to do power chips, power chips in 2022, IoT chips, driver chips in 2023, and automotive chips in 2024.
Another leading home appliance, Gree Electric, has also increased its chip research and development efforts. According to its 2021 annual report, GREE’s wholly-owned subsidiary Zero Boundary Integrated Circuit Co., Ltd. saw revenue growth of more than 50% last year, with product shipments exceeding 70 million units.
GREE Semiconductor’s products include industrial-grade 32-bit series MCUs, AIoT SoCs and power semiconductors, etc. MCUs have been used in bulk in home air conditioners, commercial multi-connectors, line controllers, remote controls, etc., with an annual usage of more than 10 million units, which can be used in consumer electronics, wearable devices, home products, health care packages and other fields. Smart home series chips (AIoT SoC) have been promoted and applied in smart air conditioners and smart home appliances, which can be used in smart home, industrial automation and other fields. Power semiconductors have completed the development and mass production of IGBT, IPM and other products, in the batch of inverter air conditioners to promote the application, can be used in home appliances, intelligent equipment, new energy and other fields.
Ouyang Huai believes that, at present, refrigerator and freezer, small home appliances, etc. basically to IGBT discrete devices to achieve frequency conversion or heating; future IPM volume will be further reduced, the performance is increasingly high, energy consumption and price reduction, to high voltage, high current and high integration module upgrade; module and IPM module application ratio is expected to increase, refrigerator and freezer IPM future there are tens of times the growth space.
Industry chain integration to solve the “small and scattered” problem
Affected by the overall environment, domestic home appliance chips this year encountered price cuts, customer “cut orders” and other challenges.
Xu Hong, chief engineer of China Household Electric Appliance Research Institute, said in a live event, the first half of this year, the weak home appliance market and epidemic and other factors related to the second half of the Chinese economy is expected to improve. Moreover, home appliance intelligence, including perception, learning and decision making, communication and execution, all need semiconductor support, covering sensors, MCU, IPM and communication modules.
“Home appliances are now moving from single intelligence to connected intelligence, which will drive the development of the semiconductor industry.” Xu Hong said that home appliances have changed from a single product to a total solution, such as smart kitchen, smart balcony, smart bathroom, etc., the number of semiconductors required is even greater than the demand for home appliances. Some experts predict that the market size of smart home appliances will reach 1.5 trillion yuan, and the market size of the smart home ecology will reach 20 trillion yuan, which can be expanded more than ten times. Everything is connected, smart home, there will be a big boost to the semiconductor industry.
Zhu Lianghong, head of the electric control switch of Midea’s home air conditioning R&D center, believes that the trend of home appliance intelligence is clear, which makes the demand for air conditioning chips increase three times: first, communication chips, such as Wifi, Bluetooth, Zigbee chips, etc.; second, intelligent sensors, such as infrared sensors, carbon dioxide sensors, etc.; third, intelligent interaction chips, such as cloud platform chips, LCD driver chips.
Xu Hong also believes that there is still a lot of room for the popularization of home appliance inverter technology. Air conditioners, washing machines, frequency conversion of the fastest going, sweeping robots, steam mops, vacuum cleaners and other motor-type home appliances, frequency conversion is also the trend, mainly due to cost pressure; in addition, electric heating appliances, if coupled with the adjustment of power IGBT module, can also be frequency conversion. Frequency conversion is a good opportunity.
In addition to the problem of demand, how high-quality development is also the urgent need to crack the domestic home appliance chip industry. This year, the home appliance market demand slowed down, the tight supply of chips has been eased, but also polarized.
Zhu Lianghong said that domestic chip companies, including chip manufacturing, chip packaging and chip design companies, rapid development in recent years, but the domestic chip in the process of rapid volume, but also exposed some problems, such as weak quality control system, cost advantages and production capacity is insufficient.
Zhu Lianghong called for the integration of resources in the domestic chip industry chain, should be from scattered operations to group operations to improve its competitiveness.
