With the arrival of the 5G era, the automotive industry is accelerating its transformation into the digital field, which has also contributed to the iterative innovation of the entire automotive industry chain. In this journey, the automotive communication industry has been elevated to an unprecedented importance, and this imaginative iceberg is emerging and bringing new excitement to the industry.

As a representative of new players who have been continuously striving for the automotive communication module circuit in recent years, Yang Yan, President of Guangtong Yuanchi, recently gave an interview with Gaishi Automobile and introduced the industry development prospects, Guangtong Yuanchi product layout, and future strategic planning.

The penetration rate of connected vehicles continues to increase, and the potential of communication module circuits is unleashed

The construction of China's LTE-V2X standard system has been completed, injecting new momentum into the implementation and application of in vehicle communication modules. Under the trend of accelerated penetration of the front-end system, the vehicle communication module is expected to be significantly expanded.

According to data, from January to June 2022, the delivery volume of passenger car front mounted (networked) communication modules for insurance in the Chinese market was 5.764 million pieces, with a loading rate of approximately 65.01%. According to calculations by Everbright Securities, it is expected that the market size of China's Internet of Vehicles cellular communication module will reach 13.25 billion yuan in 2025, with a compound growth rate of 32.05% from 2020 to 2025.

Under such strong demand, many domestic suppliers have started to exert themselves in the automotive communication module circuit, and powerful players such as Guangtong Yuanchi have emerged. The competition in this circuit is also becoming increasingly fierce.

According to Yang Yan, based on the more than 20 years of experience and customer coverage in the wireless communication field of the parent company Guanghetong, Guangtong Yuanchi was officially established in 2018. It focuses on front mounted vehicles, prioritizes the layout of the three core areas of vehicle networking, networked intelligent cockpit, and platform basic software, opens up cooperation, and focuses on building communication modules across platforms, localization of core components The four major capabilities of the high-performance and cost-effective networked AI intelligent cockpit basic platform system level solution capabilities, as well as the support capabilities for in vehicle communication and intelligent underlying systems under the EEA3.0 architecture, promote the application of the module industry.

To truly achieve vehicle road collaboration, there is still a long way to go. Whether it is in terms of C-V2X OBU penetration rate, roadside RSU construction, or national policy formulation and implementation, it still requires a certain amount of time and the joint efforts of all relevant parties in the industry. "Yang Yan said, as a result, Guangtong Yuanchi has launched multiple vehicle front end module products such as AN958, AN758, AX166, AL656, AL940, AW916, supporting the aggregation of C-V2X and Modem Two separate technical solutions are provided to provide one-stop wireless connectivity products for different vehicle application scenarios, which can be flexibly paired to welcome the arrival of the era of intelligent connected vehicles.

In the coming years, 5G modules are expected to become a new growth track and enter an accelerated replacement cycle. It is understood that in 2021, Guangtong Yuanchi developed the AN958 series vehicle level communication module based on the Qualcomm SA515M 5G platform, which supports the 3GPP 5G Release 15 standard and supports two network architectures: 5G independent networking (SA) and non independent networking (NSA). It has faster transmission speed, better carrying capacity, and lower network latency.

Regarding the issue of product homogenization in the industry, Yang Yan revealed that, The accumulation of capabilities in the communication field is the moat of Guangtong Yuanchi. On this basis, Guangtong Yuanchi has launched innovative software and hardware solutions to meet the demands of cross domain integration and software and hardware decoupling in automotive application scenarios. In the cockpit SoC field, Guangtong Yuanchi integrates multimedia entertainment, internet connection, instrument display, and other functions based on the integrated hardware architecture, providing an integrated solution.

Through a comprehensive layout of vehicle specification level module products, Guangtong Yuanchi has gradually opened up the domestic car market and entered a harvest period. In 2020, automotive front-end customers gradually completed product introduction, and vehicle products such as 5G modules, 4G modules, V2X modules, and cabin SOC began to be shipped in bulk.

Behind the continuous acceleration of the productization process is Guangtong Yuanchi's long-term continuous investment in personnel and funds. It is reported that Guangtong Yuanchi is headquartered in Shenzhen and has R&D centers in Shanghai, Xi'an, and Dalian. The core R&D personnel are all from domestic and foreign head communication and automotive parts companies, with strong R&D capabilities. It is expected that by the end of 2022, there will be 500 R&D personnel in the four regions, with a cumulative R&D investment of over 100 million RMB, achieving full coverage of 5G/4G/V2X/WiFi6 communication modules and networked intelligent cockpit SoC products and solutions.

In terms of commercialization capability, Guangtong Yuanchi has also demonstrated the advantage of relying on the collaborative development of its parent company. It is reported that Guangtong Yuanchi has reached cooperation with more than 20 mainstream car manufacturers, of which 15+core customers have achieved mass production.

It is worth noting that, in addition to launching a full range of vehicle networking communication module products through independent research and development, Guangtong Yuanchi's vehicle communication module business has also further developed in terms of customer coverage and depth of binding with customers thanks to its multiple "moves" in the capital market.

In 2020, Guanghe Tong's joint venture company Ruiling Wireless completed the acquisition of assets related to the global automotive communication module leader, Sierra Wireless, including business and R&D patents, and established a new brand called "Ruiling Wireless". Collaborating with overseas research and development experience and customer resources, Guangtong Yuanchi continues to carry out technological innovation, enhancing its overall strength in the field of vehicle networking, further establishing technical barriers and channel moats, and providing a technical foundation for future overtaking on curves. In the future, it may also help it achieve large-scale growth and increase its contribution to business increment. At the same time, relying on stable overseas growth, the realization of economies of scale will also to some extent increase the gross profit margin of vehicle communication modules.

In addition, it is worth mentioning that domestic brands are the main growth force for the front installed standard networking, and will also be a key target customer for communication module suppliers to compete for. Data shows that from January to June 2022, the number of insurance coverage carried by domestic brand new cars online was 2.735 million, a growth rate far exceeding that of joint venture brands. At present, Guangtong Yuanchi's business has basically covered domestic new energy vehicle brands and is expected to further expand in the future.

From the perspective of the continuous and rapid increase in penetration rate of the domestic Internet of Vehicles, the market space for communication modules is rapidly growing. With the gradual mass production of designated front mounted models, the market share of Guangtong Yuanchi is expected to further increase in the future.