The Zhitong Finance App learned that Huachuang Securities released a research report saying that IMU application space is broad, core technology barriers are high, and emerging industries such as humanoid robots and smart cars drive rapid growth in the IMU market. In the domestic IMU market, compared to foreign manufacturers, local manufacturers actively compete for differentiation in localization services, supply chain integration, etc., and there is broad scope for domestic alternatives in the future. Domestic manufacturers are expected to accelerate the introduction of core customers through years of industry, technology accumulation and high cost performance, to achieve domestic replacement, and give the IMU industry a “recommended” rating. The focus is on Huayi Technology (688071.SH) and Xindong Liantech (688582.SH).

The views of Huacheng Securities are as follows:

IMU (Inertial Measurement Unit): The core sensor for attitude measurement and inertial guidance.

An IMU is a device that measures the triaxial angular velocity and acceleration of an object. It usually consists of two or more accelerometers and gyroscopes. The IMU is the core device of inertial positioning technology. After error compensation and inertial navigation calculation, the IMU finally outputs navigation information such as the amount of coordinate change and speed of the carrier relative to the initial position. IMUs can be divided into consumer grade, industrial grade, and military grade according to their low to high performance. Different levels of IMU have differences in design, manufacturing, and cost to meet the performance and reliability requirements of different fields. IMU is widely used downstream, covering various fields from consumer electronics and automotive electronics to industry and communications, healthcare, etc.

IMU has broad room for growth, and domestic replacement is poised to go ahead.

There are many types of MEMS sensor segments, and IMU and core components account for the highest proportion of all product segments. According to Yole data, the global IMU market is expected to grow from 1,379 billion US dollars and 1.24 billion units in 2018 to 2,782 billion units in 2027; consumer electronics and automotive electronics are its main downstream application areas. Benefiting from the double benefits of increased demand for new energy vehicles and replacement volume, China's IMU market is expected to reach 7.55 billion yuan in 2027. Overseas companies such as Bosch and ADI have strong strength and experience in technology research and development, manufacturing processes, and market expansion, forming a core barrier. The top five major manufacturers in the global IMU market in 2021 were all major international manufacturers, accounting for 88% of the total market share. In the domestic IMU market, compared to foreign manufacturers, local manufacturers actively compete for differentiation in localization services, supply chain integration, etc., and there is broad scope for domestic alternatives in the future.

With humanoid robots and two-wheel drive smart cars, IMUs have ushered in new opportunities for development.

1) Smart cars: The “GNSS+IMU” combined navigation scheme for L2+ models is rapidly becoming popular. According to Baidu Apollo, the GNSS+IMU security combination can achieve about 85% scene coverage and enhance the stability of the navigation system in various environments. Along with the L2+ level penetration rate of autonomous driving in China, it is expected to reach 65% by 2030. According to the bank's estimates, China's automotive IMU market in the field of autonomous driving will be 3.151 billion yuan in 2023, and will rise to 15.494 billion yuan by 2030, with a CAGR of 25.55% during this period. 2) Humanoid robot: In a video recently released by Tesla, Optimus can perform difficult yoga and dance movements, showing strong balance control and walking navigation skills. IMU is mainly used in the three aspects of balance maintenance, navigation and positioning, and motion execution in humanoid robots. Based on reasonable assumptions, according to the bank's estimates, when the mass production of Tesla Optimus reached 10/50 per 1 million units, the corresponding IMU market size was 2.4/10/16 billion yuan, respectively.

Domestic manufacturers have risen to the challenge and broken through the game at an accelerated pace.

1) Huayi Technology: The company forwardly lays out inertial navigation business. In 2020, it signed a technical cooperation development memorandum with SAIC Motor Group to jointly develop positioning technology in high-level autonomous driving. The company actively carried out early IMU research and development. Following being designated by Chery in 2022, the company obtained separate development notices for the inertial navigation assembly for a project of Zhiji Automobile and the inertial navigation fixed-point for a customer model in 2023, and inertial guidance products achieved a breakthrough from “0” to “1.”

2) Core Electronics: The company uses gyroscopes as the core product and actively extends to IMU. The company's high-performance MEMS inertial sensors have the advantages of miniaturization, high integration and low cost. The core performance indicators have reached the international advanced level and have strong market competitiveness. 3) Mingyu Sensing: The company has formed a product portfolio with MEMS accelerometers as the core. With the advantages of miniaturization, low cost, high performance and high reliability, the company has delivered bulk supplies to well-known end customers in industries such as Honor, Xiaomi, Lenovo, and Goertek. In addition, the company's automotive-grade MEMS accelerometers have been supplied in bulk to Neusoft Group and imported to automotive-grade customers such as BYD. According to the company's prospectus, the company's MEMS accelerometers had a global market share of 2.11% in 2021, ranking 7th among MEMS accelerometer manufacturers in the world, breaking the monopoly of overseas manufacturers.

Risk warning: humanoid robots have fallen short of expectations; domestic manufacturers' product development progress and core customer introduction have fallen short of expectations; rising raw material prices have increased the risk of costs; increased market competition, etc.