Domestic market substitution of enterprisesiot module manufacturers overseas is the general trendForeign manufacturers started earlier, and domestic manufacture...
Jul 22,2022 | Eva
Domestic market substitution of enterprisesiot module manufacturers overseas is the general trend
Foreign manufacturers started earlier, and domestic manufacturers are accelerating to catch up. Major overseas manufacturers of wireless communication modules include Telit, Sierra Wireless and U-Blox; domestic market manufacturers include Yueyuan Communication, Guanghe Communication, Youfang Technology, Meijer Smart and Japan's Oceania Smart (acquired Sato).
In recent years, domestic manufacturers' module business revenues have grown significantly faster than overseas, showing a significantly accelerated catch-up trend. According to comparative statistics, in 2017, overseas module manufacturers still dominate the market, with telit, Sierra Wireless, Gemalto and u-blox accounting for 77% of shipments, and the top five module manufacturers in the network module market are all from, with telecom, GSM and communications accounting for 31.6% and 9.6%, respectively.
With the cost advantage, engineer dividend, the domestic market is huge, domestic substitution is an inevitable trend, optimistic about the global share of domestic module manufacturers. IoT modules are highly standardized, and the technical quality of the products mainly depends on the chips used, so the technical barriers are relatively low. In addition, the IoT industry has huge space, many participating manufacturers and fierce competition. Especially in the process of rapid product volume preservation, companies usually adopt price reduction to seize the market share. Due to high overseas labor costs, R&D and operating expenses, overseas manufacturers cannot compete with domestic manufacturers. Based on the statistics of gross margin and net profit margin of listed companies from 2016- 2020, it can be found that the gross margin of overseas manufacturers is generally higher than that of domestic manufacturers, but still cannot afford the high cost. Both Telit and Serria Wireless have recorded losses in recent years, and a downward trend is already visible. We believe that, just like the eastward shift of the 5G industry chain, foreign vendors will gradually withdraw from the communication module market in the future, while domestic vendors are expected to benefit from the global expansion.
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