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Global Telematics Control Unit Shipments Grew 13% YoY in 2021

LG led the global TCU market in 2021, followed by Continental and Harman.
US, China and Germany were the top three geographies in the global TCU market.
5G is still a niche segment, capturing less than 1% of global TCU volumes.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – April 7, 2022

Global telematics control unit (TCU) shipments grew 13% YoY in 2021, according to the latest research from Counterpoint’sGlobal Telematics Control Unit Tracker. This growth came despite the COVID-19 outbreak andsupply chainshortages, and was driven by the rising penetration of connected cars and the consumer preference for digital features. Moreover, favourable government policies such as eCall mandates are also helping this market to grow. The global ASP (average selling price) of TCUs increased slightly in 2021 due to the rising cost of 4G chipsets. We expect the supply situation to remain constrained through much of 2022.

Commenting on the market dynamics,SeniorResearch AnalystSoumen Mandalsaid, “LG leads the global TCU market, followed by Continental and Harman. These top three players account for nearly three-quarters of the market.

LG’s TCU shipments grew 19% YoY in 2021. Its close relationships with GM and Volkswagen in the Chinese andUSmarkets are helping LG maintain its leadership position. LG is leading across all major regions except Europe.

Continental,the second-largest TCU player, has a good hold on the European market, especially Germany, France and UK. However, it lost around 2% market share in 2021 compared to 2020. Continental launched 5G TCUs in early 2022 to target 5G opportunities in the automotive sector. We expect this to help Continental regain share in the coming quarters.

Harman,第三大的球员,主要集中在luxury car market. It is already offering 5G TCUs with leading premium brands. Harman’s expertise in the automotive industry and its strong distribution channels via Samsung will likely help it to win more deals and improve its position.

Among other brands, Denso and Visteon made big improvements in the TCU brand ranking list for 2021. The partnerships between Denso and Toyota, and Visteon and Ford are proving beneficial for these brands.”

Source: Counterpoint Global Telematics Control Unit Tracker, Q4 2021

With technology transitions, 2G and 3G are unable to meet the data demands of cars. And with especially 3G being phased out, 4G and 5G are becoming the only viable options. Currently, more than 90% ofconnected carsare using 4G TCUs. However, 4G is reaching maturity. We have already seen a few 5Gchipsets,NADmodules and TCU launches in 2021. We expect more cars will be equipped with 5G connectivity this year. Moreover, increasing penetration of autonomous vehicles and C-V2X deployment will help in 5G adoption as well.

Looking at connectivity trends,Research AnalystMohit Sharmasaid, “As we move to higher levels ofautonomy, the amount of data generated byADASsensors will surpass 400MB/s. To process all this data, high processing power will be required. In addition, more sophisticated AI algorithms will be required along with large volumes of data storage. The industry has to shift to 5G for cloud computing. 5G will provide more than 30 times faster data speeds and promises to reduce latency by 10 times.”

Autonomous vehicles, connected cars andelectrificationare the main trends shaping the future of mobility. Connectivity will be the backbone of these systems. OEMs are enhancing existing connectivity services like infotainment and OTA software updates while adding newer services like custom entertainment packages and insurance. Automakers are pushing connected services to diversify their revenue streams and more closely understand the overall customer behaviour to improve their car’s performance and services.

Source: Counterpoint Global Telematics Control Unit Tracker, Q4 2021

On future perspective,Associate DirectorBrady Wangsaid, “Global TCU shipments are expected to grow at a CAGR of 15% during 2020-2025. In terms of value, the TCU market will grow more than twofold to reach $7 billion by 2025. The rising penetration of higher-priced 5G TCUs is one of the major reasons for this huge growth. In terms of shipments, 5G will be the fastest (206%) growing technology during the forecast period.”

For detailed research, refer to the following reports available for subscribing clients and also for individual subscription:

Counterpoint tracks and forecasts on a quarterly basis 10+ TCU brands’ shipments, revenues and ASP performance across 4 cellular technologies and 10 major geographies.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Soumen Mandal

Brady Wang

Mohit Sharma

Counterpoint Research

press(at)www.arena-ruc.com

Related Reports:

NXP Sees Record Revenues in 2021; Automotive Segment Leads the Way

NXP’sautomotive segment crossed $5.4 billion in revenues in 2021, surpassing the previous high of $4.5 billion in 2018. The segment will continue to gain traction as “chips per vehicle” increase along with electrification. NXP’s leadership in products related to sensing and processing applications will enable it to witness continuous momentum.
The semiconductor shortages are expected to ease from 2023 onwards, hence supply-demand mismatch will remain for the rest of this year. But NXP has taken steps to ensure additional capacity expansion is in place to future-proof its supply capabilities. Furthermore, the non-cancelable, non-returnable (NCNR) concept is proving to be helpful on this front. The capex will reach $1.03 billion to account for 8.3% of total revenues in 2022.
For 2022, the company is aiming for 12.7% YoY revenue growth to cross $12.4 billion. For the first quarter, the target is 21% YoY growth at $3.1 billion.

NXP, a leading player in secure connectivity solutions for embedded applications, had a stellar performance in 2021. The company’s revenues increased 28.5% YoY to reach a record $11.06 billion. This was possible due to strong customer demand and significant design wins across its end markets despite supply chain challenges. In particular, NXP’s automotive segment did well by catering to solutions revolving aroundin-vehicle networking, advanced driver assistance systems (ADAS), and battery management in EVs. Gross profit for 2021 stood at $6.06 billion, an increase of 37% YoY.

Note: As of January 1, 2019, revenues and costs associated with Manufacturing Service Agreements were consolidated under “Other Income & Expense” and not reported as revenue.

Automotive

NXP’sautomotivesegment revenue stood at $5.4 billion in 2021 with 43.6% YoY growth. It managed to capture 50% of the total revenue of the company, an increase of 5% share from the previous year. Products centered around the evolving needs of the automotive industry, such as domain and zonal processors, electrification, and radar systems are helping the company increase revenue and industry-wide collaborations. As the automotive segment is moving towards xEVs, electric and hybrid electric vehicles, thesemiconductorcontent in cars is increasing. In addition to this, the Level 2 and Level 3 autonomy efforts are getting more traction. This will help NXP position itself in the radar and related networking processors space and drive long-term growth. For example,Fordwill use NXP’s i.MX 8 series processors and S32G2 vehicle networking processors across its fleet globally to support new vehicle architecture and deliver upgraded services, experiences, and new data monetization avenues.Densowill use NXP’s 5^thGeneration Radar 1-Chip SoC which employs leading-edge technology nodes and state-of-the-art 77GHz RFCMOS performance.

Industrial & IoT

The industrial andIoTsegment is NXP’s second-largest revenue generator after automotive, accounting for 21.8% of the 2021 revenue. The segment grew 31.3% YoY to $2.4 billion in 2021. NXP is focused on solutions related to fast-growing segments such as smart homes andwearableswithin the IoT segment and factory automation, building and energy, and healthcare within the industrial segment.

Its leadership in longtail and large OEM partnerships along with a broad connectivity portfolio (MCU and application processors, BLE, Zigbee, Wi-Fi, etc.) for the intelligent edge is helping the company with client stickiness. Some customer examples includeSchneider Electricin factory automation andChargePointin electric vehicle charging. Further, in Q4 2021, the company released its i.MX 93 applications processor and i.MX 8XLiteSoCto cover a range of applications, including industrial and IoT.

Communication Infrastructure & Other

The third highest revenue-generating segment accounted for a 15.8% share. It witnessed an increase of just 2.6% YoY to reach $1.7 billion. As the telecom industry embraces the 5G supercycle, NXP’s antenna-to-processor portfolio is in place to address its 5G configuration and infrastructure needs.

NXP’s infrastructure-focused portfolio includes theLayerscape Accessfamily of software-defined baseband processors for applications operating in mmWave and sub-6GHz frequencies,AirFastfamily of RF power solutions/multi-chip modules for 5G cellular base stations, and theLayerscape scalable seriesof 64-bit ARM-based SoCs forFWA, small cells, premises, etc. These products, which are future-proof and scalable, help customers with fast time-to-market and optimized solutions.

Mobile

NXP’smobilesegment, which holds the smallest revenue share at 12.8%, posted a YoY growth of 13.1% to cross $1.4 billion in revenues. The Q4 revenue, however, declined 8.6% YoY to reach $374 million. Specific areas where NXP has the expertise and industry-wide technical collaborations are mobile NFC Wallet, UWB technology, and ready-to-use systems solutions (i.e. end-to-end security and software).

UWB secure access solutions are gaining traction insmartphones, IoT devices, and automobiles. NXP is aiming to increase the UWB market share through its leadership in mobile wallet/car access and ecosystem knowledge.

CAPEX Overview and Expansion

The capex stood at 4.6% ($392 million) and 6.9% ($762 million) of 2020 and 2021 revenues respectively. Given the strong underlying demand, this share will increase in 2022. It is estimated to be at the higher end of NXP’s target of 6-8%, with the company planning to expand its internal back-end capacity and run its front-end fabs to the maximum to clear the order backlog and prepare for future orders. Furthermore, it is expanding its testing and packaging operations. It has also invested $4 billion in advance payments to ensure a steady production supply from foundries in the long term.

Future Guidance

Against the backdrop of strong customer demand, NXP, in 2022, aims to achieve a higher yearly revenue growth than its long-term target of 8-12%. It has also indicated strong guidance for the first quarter — 21% YoY growth at $3.1-billion revenue. However, the sequential growth will remain flat at around 2%. The automotive segment will lead with the highest growth in the mid-20s range YoY. This segment’s product demand is bolstered by the growing digitization and electrification of cars and is primarily driven by OEMs and Tier 1s that are focused on strengthening their supply chains and rebuilding inventory.

As the market reels under a supply-demand mismatch and inventory is lean across all end markets for NXP, the company is focused on minimizing the supply chain constraints by increasing capex and building more supply capabilities. Another concept that is proving helpful for the company by providing transparency and stability is the non-cancelable, non-returnable (NCNR) orders, especially relevant for the automotive segment. Having a direct and close relationship with OEMs provides a clear view of what products/equipment to focus on and prioritize in the short to medium term.

Future growth enablers which will lead to accelerated revenue growth for NXP include:

Proliferation of xEVs (BEVs/PHEVs) and higher-level autonomous cars (L2+)/radar systems, which require more semiconductor content per car.
UWB secure access solutions.
RF Power for 5G infrastructure.
Secure connected edge solutions.

Conclusion

Capitalizing on the aforementioned growth drivers will be the company’s focus in the near future. Specifically, theautomotive segment将获得最大收益,随着行业走向s software-oriented vehicles with OEMs adopting next-generation network architectures. This transformation within vehicles will help NXP with continuous orders for its flagship product, the S32G2 gateway chip, which the company is ramping up as well. Furthermore, continuous innovations in its portfolio, along with increased collaboration with auto players, will enable it to capture a larger share of the automotive semiconductor market.Another application that has the potential to see immense growth isUltra-wideband technology. UWB is seeing increased use cases in mobiles, cars, IoT devices, and more, and the company is at the forefront to capitalize on that with its expertise in mobile NFC wallet and car access applications. NXP is bullish on revenues from the UWB segment, expecting ~80% CAGR during 2021-2024 and overall revenues of $15 billion, growing at a CAGR of 8-12% for the same period.

Samsung Takes Semiconductor Crown From Intel in 2021

London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – January 28, 2022

半导体行业经历了显著的圣ructural changes in 2021 after entity lists were announced by both China and the US. The overall 2021 semiconductor revenue rankings also varied from the previous year.Samsungtook the first position from Intel thanks to its solid growth momentum in both logic IC and memory segments. Memory vendors continued to lead the industry with SK Hynix and Micron taking the third and fourth positions, followed by IC design vendors, including Qualcomm and NVIDIA.

During 2021, many top-tier semiconductor companies reiterated material changes happening in the industry, such as semi content growth, higher inventory level and longer chip lead time due to globalcomponent shortagesas well as logistical issues. The year saw 19% YoY revenue growth with the largest contribution coming from the memory and IC design sectors.

Semiconductor Industry Top Players Revenues & Rankings – 2021

Samsung took the lead in 2021 with a strong DRAM and NAND flash market performance at the expense of Intel’s relatively flattish results. Majorsmartphone SoCand GPU vendors also enjoyed strong growth in the year with over 50% YoY revenue increase. In addition, we saw 27% YoY revenue growth among the top 15 vendors, outperforming global semiconductor revenue growth and implying another year of centralized semiconductor industry.

一般来说,我们相信供应限制将莱克阀门ely persist before H2 2022, though our checks suggest some amount of component shortage easing. Looking ahead, foundries are adding new capacities in 2023 and most of them hold optimistic views on their partnerships and utilization rates even if supply and demand normalize in the foreseeable future. High performance computing, metaverse (AR/VR/XR), 5G and automotive remain key semi content growth drivers for the industry.

Disclaimer: This ranking consists of chip companies. Foundry revenue is not included to avoid double counting.

Background

分析师联系:

William Li

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十大汽车公告n CES 2021

Like the past few years, automotive players used the 2021 edition of theConsumer Electronics Show(CES), organized from January 11 to 14, to showcase new technologies, launch products and announce partnerships. This year’s CES, which went all-digital due to the COVID-19 pandemic, was majorly focussed onelectric vehicles(EVs), 5G connectivity, digital cockpit, artificial intelligence (AI) andautonomous vehicles(AVs). Moreover, COVID-19 has failed to dent the OEMs’ (original equipment manufacturers’) plans.

Here are Counterpoint analysts’ top 10 automotive announcements from this year’s CES:

1. Mercedes-Benz unveils a 56-inch ‘Hyperscreen’

As the cars are becoming smart, the need for a bigger screen is increasing for communicating and checking all the real-time vehicle data. Moreover, this 56-inch OLED Hyperscreen provides various functions like infotainment and personalized display. The screen is supported by eightCPUcores, 24GB RAM and 46.4GB/sec RAM bandwidth which helps reduce screen response times. In the era of the digital cockpit, MBUX (Mercedes-Benz User Experience) will slowly become the backbone ofMercedes-Benzvehicles, making the car moreintelligent.

2. GM reveals an ambitious EV plan and a flying car concept

With the concept of flying Cadillac eVTOL, GM has joined the race for capturing the flying car market with other automakers like Hyundai,Toyotaand FCA Group. Flying car testing projects have just started around the world and we will have to wait till after 2025 to get a good perspective on the topic.

GM launched BrightDrop, a new business unit for commercial EVs, aiming to build a first-to-last-mileEV生态系统的物流公司。这个概念not new, but there is huge potential for this market. GM may face stiff competition from other players working in this segment, like BYD, Rivian and Workhorse Group.

After a poor performance in the past few years, GM is repositioning itself and just changed its logo to reflect its EV focus. The company is spending $27 billion on EVs and AVs, targeting to launch 30 EV models by 2025. GM is also working on a battery technology called Ultium. These moves show GM’s seriousness towards itselectrificationgoal and signal its strong comeback in the automotive market.

3. Panasonic unveils augmented reality (AR)-based heads-up display (HUD)

Panasonicunveiled an AR-basedHUDwhich utilizes PRISM (positioning, reflection, intuitive, zonal UX and mission control) process to provide accurate situational awareness. A 3D imaging radar captures full 180° forward vision up to 90 metres while the 4K resolution provides a crystal-clear video of highways. Eye-tracking technology and AI-driven positioning accuracy are the key features of thisHUD, which is expected to enter the market in 2024.

4. Mobileye showcases plan for AV rollout

As a part of its plan to commercialize AVs, Intel subsidiary Mobileye is expanding its testing ofAVfleets to Shanghai, Paris, Tokyo and New York (pending regulatory approval) after a successful run in Tel Aviv, Munich and Detroit. Mobileye is also working on new Lidarsilicon chips(SoC), which are expected to enter the market by 2025. ThisSoCcan simplify computing and reduce cost by a significant amount.

5. Here Technologies brings a new mapping-as-a-service offering and 3D city models for vehicles

Here Technologiesintroduced a unique mapping-as-a-service offering where enterprises will be able to create their own maps. EV players can personalize their route maps through this service to reduce the range anxiety problem among stakeholders.

Here also launched 3D city models for vehicles while announcing a partnership with Leia and Continental to bring cutting-edge experience to automotive players. 3D maps withAR/VRapplications will increase accuracy in location mapping, will be more engaging and help in taking better decisions while driving.

6. Harman redefines in-car experience in the 5G era

Harman is aiming to put a gaming console, a recording studio, or even a concert hall experience into the vehicle to provide the best user experience. High-resolution OLED or QLED displays,5GenabledTCUandTBOT, Harman’s audio technology and advanced haptics will come together to give the user an immersive experience.

哈曼也提供工作室experienc创造者e inside a car. Automatic background noise cancellation, virtual assistant, user-friendly video set-up, interactive lighting and publishing tools are leveraged here to create content even while driving.

With the help of 5G, premium audio quality, cloud service and partnerships with concert organisers, Harman is bringing live concerts to the car. More partnerships are expected with content creators, service providers, app developers, OEMs and module players to improve the experience.

7. Gentex reveals full display rearview smart mirror

Gentex演示了一款基于lcd行业领先Full Display Mirror(FDM) with the bimodal functionality of acting as a mirror and display. FDM is a rearview mirror which can capture surroundings with better angle and stream on display. It can be easily integrated with a camera monitoring system (CMS). In thesmart mirrormode, it can record video, which helps in avoiding accidents and in finding the reason for an accident in case it happens. FDM is still a key feature for premium vehicles. However, with the rising awareness of advanced driver-assistance systems (ADAS), we will witness more penetration of FDM into mid-priced vehicles.

Gentex also exhibited a dimmable glass system, HomeLink car connectivity, Integrated Toll Module (ITM), an in-cabin sensing unit, and a smart lighting system. HomeLink is an embedded connectivity solution for vehicles which can perform functions like door lock, garage door opening, security, smart outlets, smart lighting and appliances. A vehicle integrated ITM helps users manage toll bills through a single solution, thus reducing traffic and improving efficiency in toll management. It has already entered partnerships with automakers and technology service providers for creating innovative solutions for customers. Gentex, one of the leadingconnectivityproviders to automakers, is trying to bring a new concept to the digital cockpit and the coming autonomous age.

8. NXP announces BlueBox 3.0 AHPC development platform

NXPannounced a new BlueBox 3.0 Automotive High-Performance Compute (AHPC) developmentplatformwhich supports Level 2+ autonomous driving. NXP’s Layerscape LX2160A processor helps improve processing performance two times the previous generation of the platform while the S32Gprocessorprovides secured vehicle networking. As automakers will incrementally reach the full AV stage, this platform will help find near-term applications in Level 2+ and Level 3automated vehicles. Since this platform is flexible and scalable, it can be updated with rising levels of autonomy.

9. Magna firms up EV and AV plan with a series of strategic pacts

Magna launched the LED-based Mezzo Panel for the Fisker ADAS panel. Mezzo Panel is a micro-LED and sensor-based polycarbonate panel which can be integrated into a vehicle body without affecting body aesthetics. Magna is also working on the Magna Vision Panel which is set to be showcased at the 2022 CES. Magna and Fisker are collaborating on building unique ADAS features andEV-sharing platforms.

LG Electronics and Magna have created a joint venture to concentrate on the electric powertrain market. In the CES last year, Sony surprised us by unveiling an EV prototype, Vision-S. In this year’s CES, Sony showed new videos of the Vision-S. Magna is one of the major partners for the Vision-S.

10. John Deere showcases VR technology for tractors

John Deere highlighted seed planting with the help ofvirtual reality(VR), AI and a camera system. A VR-based tractor will help improve precision during planting and work seamlessly in different environments. With the rising applications of5GandIoTin theagricultural field, John Deere is attending the CES for the past few years. Besides showcasing major products and services in the passenger and commercial vehicle segments, the CES is also becoming a stage for unveiling products for small segments of the automotive industry, like farm equipment.

Related Posts:

Semiconductor Component Shortage Hits Automobile Industry

The impact ofCOVID-19on the semiconductor supply chain has extended from consumer to automotive electronics. Since Q2 2020, many automotive electronics suppliers, such as NXP, Renesas and Microchip, have announced price increases for some key components. Some automakers in China even slowed down theircar salesdue to insufficient supply of these components in Q4 2020.

COVID-19 reduced automobile sales in H1 2020. The demand started recovering in H2 2020 in many regions but here, too, the pandemic proved to be a spoiler by impacting automotive electronic manufacturing. Furthermore, the limited capacity expansion of 8-inch semiconductor production in the past few years has intensified the shortage. In the short term, this has led to price increases. In the long term, this will transform the global automotive electronics ecosystem.

Automotive electronics’ quality requirement may be rigid and qualification process complicated, but the profit margins are stable and high. Besides, since its product lifecycle is long, it is always the target market for most semiconductor suppliers.

Outsourcing of production to foundry partners

The investment required for setting up an in-house advanced semiconductor manufacturing facility is not only huge but also risky. Further, the reliability testing, verification and qualification of automotive semiconductors may take a long time, affecting the short-term and long-term utilization rates of production plants. Also, both frontend and backend processes need to be optimally synchronized to develop competitive and high-quality products.

As a result, most automotive IDMs (Integrated Device Manufactures) have not set up any new fabs in the past three years and continue to increase the proportion of outsourced manufacturing to reduce production risk. For example, Infineon has decided to increase the foundry service percentage to 70% and 25% for logic and power components, respectively. Renesas has been reducing its fab capacity since 2011 and adding orders toTSMCto become a fab-lite IDM.

The top five automotive electronics companies – NXP, Infineon, Renesas, Texas Instruments and STMicroelectronics – were all affected by COVID-19 in H1 2020. The most affected semiconductor components were microcontrollers (MCUs) and power semiconductors.

Exhibit 1 Automotive Semiconductor Supply Chain

MCU

The major suppliers of automotive MCUs include Infineon, STMicro and NXP. Due to the impact of COVID-19 in Europe, the capacity utilization of these IDMs has not recovered. For example, STM’s capacity utilization is only 70%-80%. The most significant impact of the MCU shortage is on the Electronic Stability Program (ESP), also known as Electronic Stability Control (ESC), which is an essential part of the vehicle computer. In the fourth quarter, MCU delivery time for ESP products has been extended and prices increased.

In response to the growing demand for wireless connectivity, smart and electric vehicles, most of these companies outsource their MCU production to other foundries using 28nm and below technologies. NXP’s technology in its fab is only 90nm, so it has to outsource most of its high-end production MCUs. NXP has also established a factory in Singapore with TSMC. However, TSMC and UMC are currently running at full capacity in almost all production lines. UMC has announced that it would increase the prices for its 8-inch products. Therefore, the MCU prices will continue to increase while the delivery time will get extended.

Power semiconductors

The demand for power semiconductors in the automotive industry continues to rise with the soaring electronic content in vehicles. The market for power semiconductors is expected to grow even further asADAS(Advanced Driver Assistance Systems), electric and hybrid cars become more prevalent.

Power semiconductor devices are the core devices for power conversion, accounting for about 50% of the automotive semiconductor market. Their primary applications include inverters, voltage converters and gate drivers used to supply and regulate power systems.

IDMs’ in-house production facilities still dominate today’s power semiconductor production. However, outsourcing is increasing, especially for regular products. For example, Infineon is building a 12-inch power semiconductor factory while increasing outsourcing, which is expected to reach 15% in the next four years.

Short-term trends

Automotive semiconductor shortages may decrease automobile production in Q1 2021, especially in major car producing countries such as China and India, as the main supply of their automotive semiconductors comes from Europe, North America and South Asia, where production has slowed down due to COVID-19. At present, 88.5% of China’s automotive semiconductor MCUs are from other countries, and this number is even higher for India.
Usually, car manufacturing follows the JIT (just in time) inventory management system that allows the carmakers to keep low inventory. However, in an uncertain situation, every stakeholder in the ecosystem will try to increase inventory, thus worsening the component shortage.

Long-term trends

Automotive semiconductor production will increase to meet the growing market, either by expanding or migrating from the 8-inch to 12-inch fabs.
The increasing electronic content in vehicles will motivate major auto-producing countries to increase local production.

Conclusion

In the short term, the supply shortage of automotive semiconductors will continue till Q3 2021, but the price increase will continue till 2022.

Thales, G+D, ST Micro Lead eSIM Enablement Landscape

While Idemia, Valid and Truphone are fast-emerging enablers with growing reach, Workz and software-based eSIM providers Kigen and Oasis are this year’s dark horses in the eSIM enablement space

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego –December 16, 2020

More than 6 billion eSIM (eUICC- and iUICC-based)capable deviceswill be shipped cumulatively over the next five years, according to the latest research from Counterpoint’sETO (Emerging Technology Opportunities)Service. The uptake of eSIMs is poised to grow across a gamut of connected devices over the next decade, led by the flexibility, cost efficiency, security and other myriad benefits offered by the technology.

Commenting on the keyeSIM technologies,Senior Analyst Karan Dasaorsaid, “TheeSIM enablementspace continues to hum with activity, with an array of companies offering eSIM solutions for diverse applications. These companies fall into three broad categories: 1) eUICC OS embedded in a hardware-based tamper-proof MFF2 or Wafer Level Chip Scale Packaging (WLCSP), miniaturized leadless package form-factors soldered into the PCBs; 2) Software-based eUICC in TEE (Trusted Execution Environment), sometimes called as soft-SIM or virtual SIM; 3) The relatively newer space of integrated UICCs, also called iSIM or iUICC, where the iUICC OS is integrated into a secure enclave within the System-on-Chip (SoC).”

“As it stands, onlythe hardware-based MFF2 and WLCSP form-factors are compliant with the security standardsdefined in GSMA’s SGPv.01/02/21/22 specs. Vendors engaged in supplying these chips are required to be GSMA SAS-UP (Security Accreditation Scheme for UICC Production) certified. Non-compliant proprietary software-based eSIM solutions (mostly iSIM and soft-SIM) are available from various ecosystem players, including component vendors, device manufacturers and operators. The iSIM is seeing a rising adoption, particularly inIoTapplications, and is being evaluated to make it a part of GSMA specifications in future. On the other hand, the soft-SIM has seen greater adoption in markets such asChina, withinsmartphonesfor international roaming services monetization by OEMs, and inIoTapplications which are not that security-sensitive.”

Counterpoint has used its proprietaryCORE (COmpetitive Ranking and Evaluation)framework to help the industry better understand and identify key players driving the thriving eSIM ecosystem. The deep-dive analysis and evaluation focuses on the relevant capabilities based on several interviews with different players. It showcases their strengths, ecosystem reach and several other criteria.

Companies such asThales, G+D (Giesecke & Devrient), IDEMIAandVALIDare the leading hardware-based eSIM enablement players integrating their GSMA-compliant eUICC OS into the MFF2/WLCSP chipsets supplied by the likes ofST Micro, InfineonandNXP. Players such asTruphone, Kigen (Arm spinoff), OasisandRedteaMobilehave also partnered withchipsetplayers, module vendors, device OEMs and MNOs to offer eSIM and iSIM solutions expanding the supplier landscape.

Exhibit 1:eSIM Enablement CORE Scorecard and Analysis for Integrated Players

Source:eSIM Ecosystem – Opportunities, Trends, Evaluation, Analysis and Outlook, December 2020

Commenting on the competitive landscape,Research Vice-President Neil Shahsaid, “Conventional SIM card playersThalesandG+Dcontinue to lead the eSIM enablement race, driven by end-to-end secure GSMA certified eSIM solutions, technology contribution, diverse partnerships across the value chain and growing customer base. They are followed byIDEMIAandVALIDin third and fourth spots respectively, scoring well across the board.Wuhan Tianyu, which is among the handful of Chinese vendors fully compliant with GSMA’s SAS-UP and SAS-SM certifications, has taken notable strides towards eSIM applications leveraging the IoT boom in China.”

Shahadded, “The upstart eUICC players such asKigen, OasisandWorkzare the dark horses looking to challenge the leaders with unique offerings, broadening partner and customer base with greater focus on IoT applications.”

Semiconductorcompanies such asSTMicroelectronics, NXPandInfineonhave been the key suppliers of secure hardware eSIM chipsets, partnering with the eUICC OS vendors as above and in some cases having own in-house integrated solutions. ST Micro, for instance, has seen a marked growth in its eSIM solution adoption for consumer and IoT deployments, whereas Infineon has been the key supplier for eSIM in mobility applications.

Commenting on the future evolution of eSIM form-factors,Research Director Dale Gaiadded, “Players such asSony Semiconductor (Altair Semi), SequansandQualcommhave played a key role in driving iUICC implementations in partnership with different ecosystem players to bring iSIM solutions across IoT applications. As we move towards the iSIM era, players designing SoCs, fromQualcommtoMediaTektoApple, will dominate and drive the integrated SIM capabilities within their chipsets, helping save board space, and have more control with the ability to scale across consumer, mobility and IoT applications.”

Exhibit 2:eSIM Enablement Scorecard Evaluation and Analysis for eSIM Hardware Enablement

Source:eSIM Ecosystem – Opportunities, Trends, Evaluation, Analysis and Outlook, December 2020

The comprehensive and in-depth report on “eSIM Ecosystem – Opportunities, Trends, Evaluation, Analysis and Outlook” is part ofCounterpoint’s ETO Service.

Background:

Counterpoint Technology Market Research is a global research firm specializing in technology products in the TMT industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Karan Dasaor

Dale Lai

Neil Shah

Counterpoint Research

press(at)www.arena-ruc.com

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Insights Tag:NXP

Global Telematics Control Unit Shipments Grew 13% YoY in 2021

NXP Sees Record Revenues in 2021; Automotive Segment Leads the Way