The recent developments in the stock market have showcased a significant enthusiasm for 6G technology, especially within China's A-sharesOn December 26, shares of companies like Jin Xin Nuo and Bo Chuang Technology surged dramatically, hitting the daily limit of a 20% increaseThey were closely followed by strong performances from Yi Yuan Communication and Hua Mai Technology, as well as notable gains from giants like ZTE, Huagong Technology, Tianfu Communication, and Taicheng LightThis fervent response indicates the heightened interest and optimism surrounding the future of 6G technology.

When compared to its predecessor, 5G, the technical advancements promised by 6G are nothing short of revolutionary6G is expected to achieve data transfer speeds exceeding that of terabytes per second, with latency rates as low as one microsecondSuch speeds not only enhance data transmission but significantly improve communication security

Furthermore, the scope of coverage in 6G technology encompasses a complete integration of land, air, and space, thus paving the way for a truly interconnected world.

China's progress in telecommunications has seen a remarkable evolution, characterized by phases such as “1G blank, 2G following, 3G breakthroughs, 4G parallel running, and 5G overtaking.” The nation has emerged as a frontrunner in 6G patent technologyResearch indicates that China holds a staggering 40.3% share of the world's patents in nine core technical fields related to 6G, including telecommunications, quantum technology, base stations, and artificial intelligenceThis places it ahead of the United States, which holds 35.2%, Japan at 9.9%, and Europe at 8.9%.

The 6G technology trends are poised to concentrate on elements such as space-ground integration technologies, advanced dimensional antenna technologies, and terahertz wave bands

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A white paper published by the Ministry of Industry and Information Technology (MIIT) in China outlines anticipated features of 6G, including immersive experiences, intelligence, and comprehensive coverageIt predicts the emergence of eight practical scenarios: immersive cloud XR, holographic communication, sensory interconnectivity, intelligent interaction, communication awareness, inclusive intelligence, digital twins, and full coverage.

Such expansive application scenarios imply an enormous market potentialFor instance, China Mobile estimates that by 2025, 5G technology could stimulate a domestic market scale of nearly 10 trillion yuan, while the commercialization of 6G is expected to unleash an even larger market explosion.

6G aims to address the issue of ubiquitous smart connectivity, necessitating a complete rethinking and reconstruction of existing mobile communication infrastructures

The transition from 5G to 6G is not merely a linear advancement; it represents a leap that will spur the industrialization of various cutting-edge technologies, thereby creating significant investment opportunities.

The "14th Five-Year Plan" for the digital economy emphasizes the acceleration of satellite communication networks and the promotion of satellite internet constructionThus, a rapid advancement in satellite internet deployment can be anticipated in the near futureAs early as the 1980s, humanity began exploring global communication via satellite launches, with projects like Iridium, a collaboration between Motorola and Iridium, and Globalstar initiated by QualcommHowever, most of these ventures ultimately met with failure.

In more recent years, starting from 2014, initiatives by SpaceX, led by Elon Musk, and OneWeb, spearheaded by Indian telecom mogul Sunil Mittal, have sought to conquer space

SpaceX's Starlink project envisions launching up to 42,000 satellites to achieve global internet coverageSatellites represent a low-capacity means of internet connection; thus, to ensure global coverage while maintaining high speeds, the launch of more satellites becomes crucialThis requirement largely explains Musk's ambitious plan to deploy 42,000 satellites.

The competition in future mobile communication technology has taken to the skies, with numerous Chinese companies already advancing projectsAerospace Science and Technology Corporation and Aerospace Science and Industry Corporation have introduced the "Hongyan Constellation" and "Hongyun Project," respectively, launching experimental satellites to establish their presence in satellite internet.

In their plans, the "Hongyan Constellation" aims to launch over 300 low-orbit satellites, while the "Hongyun Project" anticipates deploying 156 satellites

When combined with initiatives from other companies, the total number of launches envisaged during the 14th Five-Year Plan period could reach as high as 2,198.

According to the Satellite Industry Association, from 2015 to 2018, the global satellite industry maintained an annual growth rate of about 3%, culminating in revenues of $277.4 billion in 2018. The China Academy of Information and Communications Technology (CAICT) estimates that by 2030, China's satellite internet market could reach a scale of hundreds of billions of dollars.

Since satellite internet is still in its nascent stages, industries associated with satellite manufacturing, launching, ground facilities, and satellite operations will be the first to benefit from this burgeoning sectorWithin the satellite industry chain, revenue contributions are split among satellite launching (2.24%), satellite manufacturing (7.03%), ground equipment (45.13%), and operational services (45.6%). Notably, operation and maintenance services represent the most lucrative segment

However, the rapid expansion of the entire market pie presents growth opportunities for leading enterprises across various segments.

In April 2021, the establishment of China Satellite Network Group, also known as "Xingwang Group," marked the formation of a national team entering the fray, accelerating China's satellite internet industryAnd here, Cheng Chang Technology, a company under He He Tai (002402.SZ), stands out as the only private entity capable of undertaking large national-level launch missions, with its products already contributing to significant projects like BeiDou II navigation and satellite communications.

The T/R (Transmit/Receive) chip plays a pivotal role in radar systems, particularly in phased array radarsThe U.Shas integrated advanced T/R technology into numerous aircraft, including the F-15, F-18, F-22, and F-35. Moreover, the THAAD missile defense system employs thousands of T/R components in a single phased array system, making T/R chips essential, accounting for 40% to 50% of radar costs

The demands for satellite T/R components are even higher, and Cheng Chang Technology's revenue is significantly derived from satellite-based business.

Estimates suggest that by 2025, the market for T/R chips could soar to 82.3 billion yuan, with low Earth orbit satellites contributing approximately 15 billion yuanGiven the high barriers to entry in this sector, only a few entities like Cheng Chang Technology and specific divisions of China Electronics Technology Group can claim expertise in phased array T/R chips, accounting for annual shipments of 1 to 1.5 billion units, while Cheng Chang Technology trails behind, shipping only several hundred thousand units, resulting in a lower market share.

From 2018 to 2020, Cheng Chang Technology recorded revenue figures of 99.8 million yuan, 133 million yuan, and 175 million yuan, respectively, showcasing a robust growth trajectoryAs downstream market needs continue to surge, this lesser-known "seed player" is positioned to thrive in China's capital markets.

The ratio of investment to output in aerospace advancements is around 1:10, translating to a potential market stimulation of tens of trillions for downstream applications in satellite internet

The space for satellite applications and operational services is therefore immense.

As for BeiDou industry developments, BeiDou Star Communication Co(002151.SZ) has begun to regain its former glory, with diversified business operations across all BeiDou sectorsThe company has seen positive revenue swings, with satellite navigation revenues hitting 770 million yuan in the first half of 2021, showing a year-on-year rise of 24.11%. Meanwhile, revenues from intelligent vehicular networks climbed 55% to reach 666 million yuanWith the mass production of next-generation core chips and the completion of the BeiDou III system, there is substantial potential for continued revenue growth.

Additionally, other major players, notably China Aerospace and China Satellite Communication Corporation, which specialize in satellite manufacturing and applications, are anticipated to benefit immensely from the overarching strategy of satellite internet development.

Terahertz communication signifies a pivotal transition from electronics to photonics, effectively addressing the growing scarcity of frequency resources

It is considered the core communication technology for the 6G eraA notable milestone occurred in June 2020 when the "University of Electronic Science and Technology Satellite" was successfully launched in Taiyuan, being dubbed the "world's first 6G experimental satellite" dedicated to testing terahertz communication technologies.

Recently, China achieved the highest real-time transmission record for terahertz wireless communication on a global scale, further affirming its leading position in this domainBeyond mobile communications, terahertz technology finds extensive applications in large security inspection devices, precision medical instruments, and military radar, illustrating its versatility.

China Unicom has established a Terahertz Joint Innovation Center, while Tianyin Electromechanical and its subsidiary Huqing Ruida have successfully undertaken terahertz communication technology trials for specific military units, becoming one of the few listed companies generating profits in this sector.

The advancement from 5G to 6G is marked by the persistent enhancement of ultra-large-scale antenna technologies

These intelligent antennas are set to be deployed in high-speed environments such as railways and airplanes, as well as in urban macro-coverage and precision positioning, in order to achieve unbounded connectivity under comprehensive coverage.

Among the two key research areas in this realm, intelligent reconfigurable surfaces (IRS) and angular momentum of electromagnetic waves hold promiseBy restructuring the propagation environment, IRS allows antennas to operate more intelligently, leading to substantial cost savings and widespread deploymentSimultaneously, enhancing spectral efficiency without consuming additional frequency or time resources through wave angular momentum presents new possibilities for the telecom industry.

The IMT-2030 (6G) Promotion Group under MIIT has been collaborating with players like China Mobile, China Telecom, ZTE, Huawei, and Unisoc in relevant technology research

Notably, ZTE and China Unicom completed the first technical testing of intelligent reconfigurable surface reflection panels within the 5G mid-band spectrum.

Nevertheless, the development of ultra-large-scale antenna technology remains largely theoretical and experimental, presenting various challenges that prevent immediate contributions to corporate performanceCompared to this, satellite internet represents a prerequisite and cornerstone for the industry's realization, and it has already entered a phase of accelerated implementation, warranting close attention over other technologies like terahertz and advanced dimensional antennas.

Whenever a new generation of mobile communication launches into commercial use, research into the next generation has invariably already commencedAs we stand on the cusp of the 6G era, which holds the potential to tap into a market exceeding 10 trillion yuan, we are witnessing its accelerated arrival.

Positioned as a critical battleground for the next wave of information technology, the race for dominance in this field is one that cannot afford to lose.