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RF & Microwaves in Asia: Technologies and Markets
Asia grabs the headlines when it comes to technological and economic development, but what is the reality? Is the continent an innovative leader or low cost mass producer? And what is its role and influence on the global RF and microwave market? This a...
The rapid growth and hunger for information technology and electronic media has created a ‘global village,’ as mass communication, combined with a need and willingness to exchange ideas, has ‘shrunk’ the modern world so that knowledge, expertise, investment and new markets are more easily accessible. Inhabiting a particularly vibrant and fast developing sector of this technological global community is Asia, which is a hub of activity. Here, the more established countries have been innovators and models for commercial development, while the emerging regions offer competition through low cost and large scale mass production. What’s more, they also nurture booming home consumer markets eager to gorge themselves on the latest technologies.
The RF and microwave industry has a role to play in satisfying that appetite and the Asia Pacific Microwave Conference (APMC) 2006 in Japan (12 to 15 December) is the perfect platform for it to demonstrate state-of-the-art research and development, and showcase its latest products. Key areas of interest covered include metamaterials engineering, packaging technology, integrated circuit development, millimetre-wave and ultra-wideband technology, mobile communications and wireless applications.
These are the technologies being developed. Where is the innovation coming from in Asia? What are the region’s particular strengths and what does the future hold?
This article does not attempt to be a comprehensive market overview but, by considering the commercial and technological environment in which the Asian RF and microwave industry is operating, takes a snapshot of the current status of academic and industrial development and identifies the main trends influencing it. It also provides a commercial perspective as executives from a cross-section of companies operating in the Asian RF and microwave industry contribute to a ‘company survey.’
Asia is a vast continent, which is diverse in terms of technological advancement and economic development. Therefore, this article concentrates particularly on the Asia Pacific region and aims to highlight its diversity by contrasting the relatively established countries such as Japan, South Korea and Taiwan with emerging nations like China.
High-tech, state-of-the-art electronics is most synonymous with Asian industry. After the 2001 downturn, a significant portion of electronic manufacturing shifted from the US and Europe to low cost regions of Asia, making it a dominant force. In the RF and microwave field mobile communications and wireless technologies are key areas of activity and product development.
Essential to these sectors is the semiconductor market, an industry where developmental and price pressures have brought about changes in structure, geographical activity and areas of application. According to the 2006 spring forecast of the World Semiconductor Trade Statistics (WSTS), the global semiconductor market is expected to grow 10.1 percent on an annualized basis to $250 B in 2006, with projected growth accelerating to 11.0 percent in 2007 and 12.8 percent in 2008. Significantly, Asia Pacific is forecast to be the largest and fastest growing regional market, not so much because of a continuing shift in manufacturing due to low manufacturing costs but more in response to rising domestic demand. And with the demand for increasing semiconductor content in electronic products for mobile communications, telecom infrastructures and consumer applications, that growth is set to continue.
It will not surprise many to identify China as the number one growth area globally for both semiconductor manufacturing and consumption as it becomes a prime location for IC design and production. According to a recent In-Stat report, China consumed about 20 percent of total global semiconductor products in 2004, and by 2010 will consume one-third, making it the world’s largest semiconductor consumer. Other Asian countries such as India and Thailand are growing rapidly, but not nearly on the same scale as China.
A key determinant of the success of the Asian semiconductor manufacturing market is the strength of the region’s semiconductor foundry industry. Technical expertise and production costs are key factors, of course, but global issues have also had an effect with the ITAR export restrictions having helped to accelerate the investment and development of the region’s semiconductor foundries. Now, In-Stat reports that of the $18.24 B global revenue in 2005, $16.56 B (nearly 91 percent) was contributed by the Asian foundry industry, which itself is dominated by Taiwan. The country has built up foundry capacity to become the world’s highest fab density area.
As for Japan, although it was one of the first countries in the region to provide foundry services, the country’s well-established semiconductor industry is dominated by major integrated device manufacturers (IDM) that have their own wafer fabs. South Korea is emerging as a foundry source to serve its well-developed semiconductor manufacturing infrastructure and is in a strong position to reduce the cost of logistics and improve supply chain management by offering a complete turnkey manufacturing solution.
China too has proved that it has serious intentions to be a leading force, having established foundries whose aggressive technology development and pricing is putting pressure on more established foundries. The country’s IDM and foundry players are expanding their production capacities, with price advantages and emerging domestic fabless companies having an impact.
The Asia Pacific wireless telecom industry is set to grow from $159.97 B in annual revenue in 2005 to $242.42 B by the end of 2010, reports In-Stat. In 2005, there were over 859.4 million wireless service subscribers in the region, a total that is expected to reach 1.57 billion in 2010. The overall subscriber penetration rate for the region was about 25 percent in 2005, varying from 6.8 percent (India) to 115 percent (Hong Kong).
The region has been the flagship for 3G roll out with Japan and South Korea being ahead of the rest of the world in introducing new handset and service capabilities. They were the first markets to launch 3G services and are currently the only countries to have achieved mainstream adoption of 3G. In Japan, in 2005, about 40 percent of subscribers used 3G networks only and it is expected that 2006 will see the transition from 2G to 3G be largely completed. South Korea is not far behind.
3G is one area where China has been slow off the mark with 3G licenses, for which foreign carriers will not be allowed to apply, and are not expected be issued until late 2006 or early 2007. However, both Chinese officials and industry executives have stated they want 3G in place in time for the Beijing Olympic Games in August 2008.
The Asia Pacific region has always been an active test bed and open market for new technologies and it is taking the lead in WiMAX development where it has the largest number of WiMAX subscribers. However, most WiMAX deployments are still in a trial phase providing only high speed Internet service, although in the future the largest markets for WiMAX will be for mobile applications. At present South Korea and Taiwan are particularly active in this sector.
Moving on to infrastructure, in relation to the point-to-point business, there is significant activity in Asia Pacific where cellular infrastructure is the optimum solution to interconnect mobile base stations. This is due to minimal existing fibre optic/leased line infrastructure and also the large distances that often need to be covered.
In the RF and microwave field, the mobile handset sector may be the largest single product market for semiconductors outside the PC market, but others are significant too. For instance, the automotive semiconductor market is creeping up to 10 percent of the total semiconductor market. Growth in this sector is forecast to continue as technological advances are made with regards to telematics, infotainment, vehicle networking and inter-vehicle networking. Another key area of development is in automotive radar systems, particularly at 77 GHz with the aim of dramatically reducing road injuries and fatalities.
The automotive electronics market in Asian countries is booming, as consumers demand everything from vehicle entertainment to on-board navigation systems. In China alone, the domestic market for vehicle entertainment and navigation systems will be worth at least $4 B by 2013, according to a report by Strategy Analytics.
It states that for international automotive infotainment system suppliers, China offers opportunities to reduce component and system production costs, to increase access to international Chinese vehicle OEM joint ventures, and to respond to the growing domestic Chinese OE market. There are also significant cost containment opportunities for any international electronics system vendors willing to invest locally. Interestingly, Japanese vendors are currently leading this field.
Technologically and economically, the above briefly sets the context in which the Asian RF and microwave industry is currently operating, but how are the different technology sectors and individual companies faring in this environment? To provide insight into current market conditions and technological development, a commercial perspective is offered via a ‘company survey’ of executives from companies representing a wide cross-section of the Asian RF and microwave industry. The format is generally a brief overview of the company’s activity, followed by comments on technological and market initiatives.
Part of the Kyocera Group’s stated philosophy is to “Create. Change. Grow. Think creatively; execute logically. Innovate consistently and grow steadily. By building on creative thinking, we can create value for society.”
That thinking is evident in the RF and microwave field, where the company manufactures and supplies custom-design ceramic packages (aluminium oxide, aluminium nitride and low temperature co-fired ceramics). Its current activity is vast, focussing on: ceramic packages for SAW filters, crystal oscillators, duplexers, power amplifier modules, front-end modules, Bluetooth“ modules, wireless LAN modules, TV tuner modules, satellite communication devices, point-to-multipoint radio communication devices, 24 GHz security devices and LDMOS/GaAs RF power devices. The company also develops ceramic packages for millimetre-wave applications such as 60 GHz wireless LAN and 77 GHz automotive radar applications.
Its approach is a worldwide one, manufacturing and supplying custom-design devices to fit the specific need and application rather than developing products for different geographical markets. It believes in capitalising on its strengths and sees Asian manufacturers in general doing the same, being particularly strong in the field of miniaturization of RF modules for mobile phone applications.
Kyocera is currently seeing significant activity in the development of wireless LAN modules, TV tuner modules, 77 GHz automotive radar and GaN RF power devices. The company envisages that the technologies that will fuel the growth of the RF and microwave industry in the future will be ultra-wideband (UWB) and RF-MEMS.
In the RF and microwave sector, RFHIC’s main activities are making multi-chip module (MCM) components for 3G, 4G, base transceiver station (BTS) and repeater markets, with the aim of providing a total solution for customers. A particular highlight of current activity is the company’s use of GaN technology to develop high power amplifiers that are two-stage hybrid or pallet for wide bandwidth applications. Significantly, this development will help to minimize the number of base transceiver stations, since one power amplifier covers several frequencies, that is, DCS, PCS and UMTS all in one PA.
The company takes a worldwide approach to product development. However, because each geographical region has its own priorities and technological emphasis, the company has a network of representatives globally whose job it is to cater to the needs of their particular region.
For instance, in Europe, the main emphasis is on companies focussing on base station development. In Korea, Japan and other Asian countries, companies develop products based on the custom-made module due to the highly successful repeater market. In the US, however, the focus is on the development of the low noise amplifier (LNA), up-down phase-locked loop (PLL) synthesizer, divider and power amplifier used for WiMAX systems.
Today’s telecommunication market requires fast paced development, production/manufacturing and mass production. RFHIC believes that Asian companies have the ability to react to this rapidly changing market and quickly move from development to production. Also, Asian companies have the resources that make it possible for customized multi-chip module (MCM) products to be developed and manufactured at low production costs.
From a technological point of view, the company sees its market sector being stimulated by the introduction of the GaN device. In particular, it will lead to the reduction in the size of the wideband, WiMAX (PCS + WCDMA or cellular + UMTS), base transceiver station (BTS) and repeater, the lowering of maintenance costs and the realisation of high speed data communication, which opens up new market possibilities.
In the next few years, the company predicts the development of simple devices, with MMIC technology becoming easily available. It sees partners having to work closely together to develop products at a pace that reflects the practicality of new technology adoption. In particular, RFHIC sees the future expectation of the RF market to be in custom-made MCM technology and hybrid power amplifiers using GaN devices.
Chin Nan Precision Electronics
As an ISO 9001 registered manufacturer, Chin Nan has been providing interconnect products to the RF and microwave industry since 1965 and its main operating principles are clarity and stability. Its key areas of activity are RF connectors and cable assembly products. Quality and reliability are built into each product by design and the company maintains the integrity of the design with strict process controls from initial procurement and machining of raw stock through assembly, final test and packaging.
Chin Nan can provide products in the frequency range from DC to 40 GHz, due to the utilisation of precision equipment and microwave network analysers that can operate at up to 60 GHz.
The company operates worldwide but attempts to adapt to the specific requirements of each region according to customer needs and market demands. It is continually on the lookout for partners and distributors outside Asia. Chin Nan recognises that in today’s competitive global marketplace, quality, on-time delivery and overall value is vital to its diversified customer base. In general, the company’s view is that the strengths that Asian manufacturers bring to the market place include design capability, quality, price and short lead times.
In its specific field of operation, Chin Nan is seeing technological development of wireless communications and the RF measurement moving at a rapid pace. It believes that the move towards higher frequencies will be significant in the future.
In 2001 the RF Integrated Corporation (RFIC) established its Asia Pacific operation site with a well equipped R&D centre in Taiwan. This was followed in 2004 by the opening of an R&D and marketing coordinating centre in Beijing, China, with the aim of combining the Taiwan and China development resources to enable the company to speed up market and product integration in South Asia.
Based on advanced HBT/PHEMT, RF COMS and SiGe technologies, the company develops its own products and in particular is a pioneer in proprietary RFIC design and manufacturing for wireless communication applications such as WLANs, cellular, PCS mobile handsets and base stations. Currently, the company has introduced a full line of power amplifiers for WLAN 802.11a/b/g and Bluetooth applications as well as the new product lines for CDMA, GSM/GPRS, PHS handset and optical fibre communication components.
The company offers its products globally and its approach to marketing does not vary for different geographical markets. There is no need as the product is a wireless communication component that is used in everyday life in such devices as cell phones and PCI, so the method for developing the product is the same worldwide. The only geographical consideration is that technological requirements might differ because of the frequency and or power required in a specific band or the input/output power, which results in some product adjustment for specific regions.
Looking at Asian manufacturing as a whole, RFIC sees its specific strength as being its price competitiveness, which is enabling it to make significant inroads into global markets. As for the company itself, it has distributors outside Asia but is still looking for more in order to stimulate further growth.
The company was established in 1992 and is a leading manufacturer of RF components, specializing in digital cellular telecommunication systems. As an independent, privately owned, high technology enterprise, HT Microwave has unique technical strengths in microwave technology research and RF and microwave components. It employs high level technologists and prides itself on its research links with major universities.
The company offers active and passive components for radar and communications. It manufactures its own products and also others under licence. It can design and, if required, supply custom components, products and complete system solutions to specific customer requirements.
HT Microwave operates worldwide with its philosophy to work closely with customers to supply products that specifically meet their requirements. It believes in strong alliances and is looking for partners and distributors that it can work with globally.
The company also sees it as important to get its message and products to a wide audience in a focussed way. Therefore, its strategy is to target key exhibitions, particularly in the microwave industry, including the annual IEEE MTT-S and European Microwave Week, as well as specific International Telecommunications Union (ITU) events.
Tiger Micro-Electronics Institute
Tiger manufactures passive and active RF and microwave components. The company’s passive components include power dividers/combiners, directional couplers and 90°/180° hybrids, circulators/isolators and filters. Active components include frequency synthesizers, mixers, DROs and amplifiers. Using these components, the company also manufactures and assembles subsystems.
The passive components are the company’s mainstay. Tiger is able to take advantage of China’s basic industrial base and the low cost of technical labour to produce high performance, reliable products at low prices. It is also forging partnerships and has recently joined Ericsson’s global business chain.
The company operates its business worldwide, with North America and Europe being the main areas of activity and its philosophy is to adapt to specific regional and customer requirements. Particularly in Europe, Tiger believes it needs to consider trends and statistics to be able to forecast and develop products that can satisfy the market in large quantities. Up until now, the company has been developing its own products, but in the future may well manufacture under license from Europe.
When considering the specific strengths that Asian manufacturers bring to the marketplace, Tiger believes that technical expertise and good quality control leading to good reliability combined with low prices, offer a competitive edge in the global marketplace. Also, due to cooperation with Europe and America, the appearance and packaging of Asian products now meet the required international standards.
As far as new developments are concerned, Tiger identifies high density MIC technology as being an area of growth. It also sees the expansion of wireless communications systems such as 3G, WLAN and WiMAX fuelling the development of the RF and microwave industry over the next few years.
Asia Pacific has become a strong and influential force in the electronics market. For the RF and microwave industry, it is the mobile communications and wireless technologies sectors that are seeing the most benefit and growth, particularly in the efforts to achieve greater capacity and larger bandwidths. Based on a foundation of strong foundry businesses, the region’s semiconductor manufacturing industry dominates the global market, which, in turn, benefits the region’s component, system and subsystem developers. 3G technologies are at the forefront of global development, while WiMAX is potentially a growth development area as is the automotive sector. Millimetre-wave, ultra-wideband and RF-MEMS are technologies to keep an eye on as well.
The established industries of Japan, South Korea and Taiwan profit from high levels of technical expertise, strategic investment and rapid times to market. Emerging nations, particularly China, offer competition through low cost and large scale mass production. Additionally, the region’s home markets have a ravenous appetite for the latest technologies and the economic conditions to feed it. China is a prime example, with an industry that is rising at a meteoric rate, helped by governmental support. They are becoming more open but have received some criticism for protectionism.
The Asia Pacific market is one that the rest of the world is also eager to exploit. Foreign companies in North America and Europe in particular have identified the potential and have acted by forging alliances and setting up joint venture manufacturing and marketing ventures, all of which is adding to the mix of a vibrant region.
The author would like to thank the company executives who shared their in-depth knowledge and expertise. Their contributions have given a rare insight into the Asia Pacific RF and microwave industry. Thanks also to the companies below for sharing their statistics on the market: