This article is from Gelonghui's column: CITIC Securities Research, Author: Ding Qi, Yang Zeyuan
The lidar market has a long-term global market space of about 100 billion US dollars and has attracted much attention in the capital market. We believe that the most valuable investment in the lidar industry chain is the complete machine, which will have a high degree of concentration and a good gross profit margin. In the supply chain, we recommend focusing on transmitter chips, receiver chips, and collimator devices.
▍The space, valuation and pace of the lidar industry:
1) Market space:The industry's long-term market space is 100 billion US dollars, so the market gives industry-related companies a high valuation.
2) Time rhythm:2022 is the first year that lidar has been launched. Currently, there are 26 new designated sites in 2022, exceeding the total of 2018-2021, and the industry investment window has arrived.
▍The investment value of a complete lidar machine:
Although there are currently many manufacturers entering the market, we think the industry threshold is high, and eventually there will be a high concentration and gross profit margin. CR5 concentration is expected to exceed 85%, and gross margin is expected to be 35% +. We think the threshold is reflected in three aspects.
1) Vehicle regulation barriers:LiDAR is a “mechanical+optical+electronic” product. Vehicle regulations are difficult, and the vehicle loading cycle is long.
2) Algorithmic barriers:Since the lidar optical path design is non-standard, the algorithm and the whole machine must be decoupled, rather than software and hardware decoupled like a camera module, so there is a higher gross profit margin.
3) Chip barriers:In order to reduce costs and improve performance, leading lidar companies are integrating TIA, ADC, FPGA, and DSP into one SOC, further raising the industry threshold through chipization.
▍The investment value of the lidar industry chain:
1) Emitter chip: The 905nm EEL chip situation is difficult to change, but after VCSEL makes up for the power shortfall through the multi-junction process, because of its low cost and low temperature drift characteristics, the domestic chips Changguang Huaxin and Zonghui Xinguang ushered in development opportunities.
2) Receiver: Since the 905nm route needs to increase the detection range, it is expected that SiPM and SPAD will become a major trend. 1550nm will continue to use APD. The threshold for related products is high. Currently, it is mainly monopolized by Sony, Hamamatsu, and Ansemi. The 1550nm Silicon Galaxy and 905nm Nanjing Core Vision and Lingming Photonics are expected to be the first to break through.
3) Calibration end:Semiconductor lasers have a small resonator and poor spot quality. In order to meet lidar standards, optical alignment of the fast and slow axes is required, and the line light source scheme also needs to be homogenized. The value of a single lidar is hundreds of yuan.
4) TEC:Since Osram has solved the temperature drift of EEL, VCSEL naturally has low temperature drift characteristics, so TEC is no longer needed for lidar.
5) Scanning end:The main barrier to rotating mirrors is timing control. The MEMS process is difficult, and Xijing Technology was the first to achieve mass production.
▍Risk Factors:
The ADAS penetration rate fell short of the expected risk, lidar cost reduction fell short of the expected risk, and the penetration rate of the VCSEL solution fell short of the expected risk.
▍Investment advice:
The long-term market space for lidar is large, and the prospects for related companies are broad. 2022 will be launched on a large scale, and the investment time window has arrived. We think the whole machine has the best investment value. In the lidar supply chain, there is a clear trend of emitting VCSEL replacing EEL.