Clock chips are heating up once again. From resonators to jitter cleaner chips, they have become one of the focal points of global capital attention. The driving forces are twofold: the concepts of AI (Artificial Intelligence) computing power and high-speed communications, and the genuine demand for quality and volume improvements.
This short article provides a brief overview to make the landscape clear.
1) Clock chips are the "pulse" chips and the "heartbeat" chips. They are indispensable in all electronic systems. If they are missing, malfunctioning, or disordered, it will lead to "arrhythmia."
2) Currently, there is no listed clock chip company in China (though there are listed quartz crystal oscillator companies). Aurasemi (valued at 10 billion RMB) and Dapu Telecom (valued at 15 billion RMB) have withdrawn their IPO applications. The market size of tens of billions of RMB is sufficient to support more than five listed companies.
3) Attention from the capital market has suddenly surged. Within just two days, SiTime, a leader in this niche segment, acquired the clock division of Renesas (IDT) for $3 billion. Meanwhile, the Canadian startup Stathera raised $55 million, with investors surprisingly including TXC Corporation, a leader in quartz crystal oscillators. This fully demonstrates the capital layout in this field.
4) The market is stable and growing year by year. The overall market size of the clock field is $5 billion to $10 billion (the data difference is mainly reflected in the consolidated calculation caliber of the upstream and downstream), of which oscillators account for about half at $3 billion, and the clock signal chain is $3 billion. The Chinese market accounts for about one-third of the global market.
5) As emerging industries such as AI (Artificial Intelligence) and commercial aerospace evolve, new requirements are put forward for the performance of clock chips. On the one hand, this brings incremental opportunities for market demand; on the other hand, it also brings opportunities for performance upgrades of clock products.
6) A typical manifestation of industrial upgrading: Apple (mobile phones), Tesla (automobiles), NVIDIA (computing power), Finisar (optical modules), and SpaceX (commercial aerospace) are all shifting from quartz resonators to MEMS resonators. To cope with high-performance signal processing, downstream customers are continuously raising the design requirements for clock jitter cleaner chips.
7) These components may look inconspicuous, but their prices are not low. A high-end jitter cleaner chip costs several hundred dollars, and an OCXO (Oven Controlled Crystal Oscillator) oscillator costs several thousand RMB... Besides high-end products, there is also a massive volume of consumer-grade products, as well as optical modules, PCIe, and storage in computing centers...
8) The most core logic is still "domestic substitution". The high-end clock field is dominated by the United States, and our domestic production rate is less than 5%. The data for the low-end market is also not optimistic; among so many companies globally, our companies are nowhere to be seen on the rankings. High-end quartz crystals are firmly controlled by Japan, which is related to the lifeline of core fields. Even for domestic companies making high-stability clocks, many core quartz resonators and ASIC (Application-Specific Integrated Circuit) chips still rely on foreign manufacturers. Once turmoil occurs in the clock field, its impact will be no less than that of GPUs.
9) The stock opportunities in market demand cover the entire clock industry chain (resonators, oscillators, drivers, signal generators, and jitter cleaner clocks). The opportunities for product performance upgrades brought by emerging industries mainly cover new MEMS resonators (capacitive and piezoelectric) and high-performance clock jitter cleaner chips.
Bu Rixin, founder of Chuangdao Hard Technology, Vice President of the Integrated Circuit Specialized Committee of Beijing University of Posts and Telecommunications, expert at Zheshang Securities Research Institute, and concurrently serving on the investment committees of multiple investment institutions. He holds a bachelor's degree in Electronic Engineering and a master's degree in Computer Science. He possesses securities and fund qualifications and has over 15 years of experience in IT R&D, consulting, investment, and financing. His investment focus areas include semiconductors, intelligent manufacturing, and new energy. The "Hard Tech New Force" platform covers over 50,000 investors and thousands of technology startups, and has guided dozens of technology companies in completing equity financing.