The Upstream and Downstream Markets of China’s Smart Home Industry in 2022

China is the world's largest IoT supply market, with 960 million of the 1.5 billion cellular network-connected devices in global are made. In the future, it becomes the prospective largest consumer market as well.

I. The industrial chain of smart home in China

The upstream of China’s smart home industry chain includes solutions, industrial design, IC, sensors, PCBs, LCD panels, MCUs, communication modules, voice control interaction technology, smart controllers, etc.

Its downstream is the terminal products, including smart door locks, smart curtains, smart lighting, smart speakers, smart air purifiers, sweeping robots, smart air conditioners, smart televisions, smart washing machines, etc.

II. The market trends of key upstreams

- IC

In recent years, China’s IC industry has developed and the market scale has been expanding rapidly with the National policy support.

According to the estimation by China’s semiconductor industry, the sales revenue of IC reached 884.8 billion yuan in 2020, and is expected to reach 1183.9 billion yuan in 2022, with around 34% growth.

- Sensor

Sensors are the bridge connecting the physical world and the digital world.

As shown in the figure below, the scale of China’s sensor market has achieved 250 billion yuan, up 14.7% YoY in 2020.

In the perspective of the future, in the trend of IoT, the sensor industry will receive more attention and the market will make rapid expansion by the introduction of relevant supporting policies by the government.

Data from ASKCI, it is estimated that the sensor market will increase to 315 billion yuan in 2022.

- PCB

Recently, China has continuously introduced foreign advanced technology and equipment to develop the PCB industry.

The output value of the PCB industry is fast-growing, and it has become a global PCB manufacturing center.

Data from Prismark & ASKCI, the output value increased from $ 29.73 billion in 2017 to US$ 34.8 billion in 2020, with a CAGR of 5.4%, higher than the global average growth level.

In the future, the PCB industry is expected to maintain the trend and China’s PCB industry will reach US$38.15 billion in 2022, with a YoY growth of 4.92%.

- LCD panels

Nowadays, LCD panels as the mainstream human-machine interface (HMI) media, and it has been widely embedded and developed in the field of the smart home.

In terms of function, it has upgraded from a monotonous display function to the convenient interaction function integrating color imaging, appearance, voice, touch, control system, and other technologies.

With the rise of domestic panel manufacturers such as BOE, display panel supply in mainland China is rapidly catching up with a CAGR of 20.23%, with the market scale growing from 43.6 million in 2016 to 91.1 million in 2020, and expected to reach 121.2 million in 2025.

In the field of LCD panels, the supply from mainland China will account for 45.28% of the global market by 2025.

III. The market trend of the downstream

- Market scale

By the end of 2019, China has become the world’s largest IoT market. 1.5 billion of cellular network devices in the global market, 960 million of them came from China, accounting for 64%.

Now, China will become the world’s largest smart home consumer market, occupying 50%-60% of the market share and contributing 20%-30% of profit in global.

Data from CSHIA & ASKCI, the market scale of China’s smart home market increased from 260.85 billion yuan to 514.47 billion yuan from 2016 to 2020, with a CAGR of 18.51%.

The ASKCI predicts that it will achieve 651.56 billion yuan in 2022.

- Shipment volume

Over recent years, China’s smart home shipments have grown rapidly.

Data from IDC & ASKCI, the shipment volume of smart home devices from China was only 114 million units in 2017. It has broken the record of 200 million in 2019.

Due to the impact of the epidemic, the shipment volume grow slow to 220 million in 2020, and is predicted that it will keep up to 240 million units in 2022.

- Market segment and market share in smart home

As shown in the figure below, in light of the market segment by product, home appliances account for the most significant proportion of smart home products.

Among them, the combined market share of smart air-conditioners, smart refrigerators, and smart washing machines exceed 70%.

IV. Outlook

Through the upstream and downstream of the smart home industry chain, we can know that it has a very promising development prospect.

With the upgrading of consumption, consumers are no longer satisfied with standardized household equipment, smart home will become the trend of development in the future.