The low-altitude economy is a comprehensive economic form driven by various low-altitude flight activities of both manned and unmanned aircraft, radiating and promoting the integrated development of related fields. The low-altitude economy refers to an economic form that relies on low-altitude airspace (airspace within 3000 meters), driven by various low-altitude flight activities of both manned and unmanned aircraft, and radiates and promotes the integrated development of related fields.
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The Low-Altitude Economy is Flourishing
In February 2021, the low-altitude economy was written into the "National Integrated Three-Dimensional Transportation Network Planning Outline" for the first time, marking the first time the concept of the low-altitude economy was included in national planning. At the end of 2023, the Central Economic Work Conference proposed to "create several strategic emerging industries such as bio-manufacturing, commercial spaceflight, and the low-altitude economy." At the National People's Congress in 2024, the "low-altitude economy as one of the new growth engines" was written into the government work report.
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As a strategic emerging industry, the low-altitude economy has a high level of technological content and concentration of innovation elements. Its industry chain extends widely, application scenarios are complex and diverse, and the main users are diverse, involving multiple departments and fields, showing distinct new quality production characteristics and having a very broad development prospect. Driven by market demand and policy support, the low-altitude economy, with traditional general aviation and drone industries as its core, is accelerating its development.
By the end of 2023, there were 690 registered general aviation companies in the country, with 2,900 operational aircraft and an average monthly flight time of 114,000 hours, which are 2.5 times, 1.5 times, and 1.8 times those of 2015, respectively. Traditional general aviation business is developing steadily and showing a positive growth trend. At the same time, new drone business forms are also flourishing. By the end of 2023, there were 1.267 million registered drones in China, a year-on-year increase of 32.2%, and the flight time of drones reached 23.11 million hours, a year-on-year increase of 11.8%; there were 19,000 companies operating drones.
To better serve low-altitude aircraft, the corresponding support capabilities are also continuously improving. By the end of 2023, there were 449 general aviation airports in the country, which is 7.4 times that of 2015. In 2023, the flight volume of general aviation increased by 27.5% compared to 2019, and the accident rate per 10,000 flights decreased by 42.1% compared to 2019. At present, China's unmanned aviation flight activities have shown a good development trend, and civil drones have achieved industry popularization in multiple fields such as agriculture, forestry, animal husbandry, and fishery, as well as entertainment and aerial photography. At the same time, the management model and technical standards for urban scenarios and logistics applications have also initially met the basis for promotion. The number of related domestic companies is also increasing. By the end of 2023, there were about 2,000 drone design and manufacturing units and nearly 20,000 operating companies in China. According to some research institutions, the scale of China's low-altitude economy in 2023 has exceeded 500 billion yuan, and it is expected to reach 2 trillion yuan by 2030.
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Can the Low-Altitude Economy Drive the Chip Industry?As a representative of new quality production forces, the development of the low-altitude economy relies on advanced technology and equipment, including chip products.
During the design and manufacturing process of products such as eVTOL aircraft and flying cars, sensors can be used to monitor the status and environmental conditions of the aircraft; MCUs are used for control systems and the management of various electronic devices; communication chips can be used for data transmission between the aircraft and ground stations, other aircraft; power management chips are used for energy management and distribution of the aircraft; memory is used to store flight data and system software. With the rapid development of the low-altitude economy, the commercialization of related products is accelerating, which will drive the demand for semiconductor components. For example, it is necessary to integrate various integrated circuit products, such as sensors, controllers, communication modules, etc., to achieve their flight control, navigation, communication, and other functions.
To ensure the communication needs of the low-altitude economy, it is expected that a large number of 5G-A base stations will be deployed in the future, with the number expected to reach the million level, of which about 70% of the base stations will be upgraded from existing 5G base stations. Communication-related manufacturers are expected to achieve significant benefits in the future. With the continuous expansion of 5G/6G frequency resources, to cope with the gradual increase of future frequency spectrum points, 5G-A base stations need to introduce more channels to ensure that their vertical or horizontal coverage range is wide enough. At present, ELAA (extremely large-scale antenna array) technology is recognized as one of the important directions for the evolution of 5G technology, especially in the low-altitude application field, it has significant importance.
In terms of the core upgrade of 5G-A base stations, AAU (active antenna unit) plays a crucial role. Compared with 5G base stations, the average number of channels for 5G-A base stations will be more than three times that of 5G base stations, which will promote the rapid increase in demand for components such as antenna elements and filters in related equipment.
Specifically, in the field of filters, companies such as Canaan Technology and Wuhan Fan Valley have significant technical advantages and market share; in the field of antenna elements, manufacturers such as Kechuang New Source and Shoubei De also show strong development momentum. In addition, with the gradual expansion of the 5G-A network coverage, communication-related components on the aircraft side are expected to be fully upgraded. Competitive enterprises in the communication module field, such as Guanghe Tong and Megvii, are expected to occupy an important position in the future market.
The demand for integrated circuit products by low-altitude aircraft and automobiles is both similar and different. According to the introduction of GAC Research Institute, the performance requirements of automotive-grade components are not lower than those of low-altitude spacecraft.
It is not difficult to find that in the four areas of chip working temperature, vibration, impact, and humidity, the requirements for automotive-grade are not lower than those for aviation. High-altitude aircraft require a low-temperature requirement of -55°C, but the operating altitude of eVTOL is the same as that of new energy vehicles, and they do not need to meet this requirement. EMC, lightning strike, and high-energy electromagnetic fields can be designed to meet the requirements at the equipment level, and there is no need to make strict requirements for all integrated circuits. This also means that companies in the automotive-grade chip track will have the opportunity to enter this track.Has the Chip Company "Taken Off"?
In the low-altitude economy industry chain, some companies have already taken action. Not long ago, CEC Interconnection and Phytium jointly released an autonomous and controllable industrial-grade unmanned flight controller core control and low-altitude data link security and trust system based on Phytium chips.
This system was jointly created by CEC Star Original Technology Co., Ltd., a subsidiary of CEC Interconnection, and Phytium, using the Phytium E2000D as the main control chip. The underlying architecture of the flight control system software was reconstructed, the core algorithm based on RT-Thread was optimized for application, and the control machine components were innovated and upgraded with domestic innovation. The Phytium E2000D product is a low-power, high-computing power, high-performance CPU chip developed by Phytium for the new generation of industrial Internet and Internet of Things application scenarios, widely used in scenarios such as data collection, data communication, data calculation, and storage.
The autonomous and secure flight control system based on Phytium chips, combined with ground workstations and big data platforms, helps to form a unified communication standard and promotes the construction of a complete data security application industry chain based on domestication. The system has been applied in projects such as forestry early warning monitoring by the Longcaoping Forestry Bureau in Shaanxi Province and digital emergency in Huangling, Yan'an City.
Some companies' products are also technically promising to become participants in the low-altitude economy market. Unisplendour Corporation indicated at the performance briefing meeting that the company is one of the chip suppliers with the largest application volume and the most categories in the special field, and there is a bus switch chip product that has passed the flight certification on the C919 aircraft. The low-altitude economy is still in its infancy, and the company has a great advantage. XunTong Communications stated that the high-computing power module SIM9650L helps aircraft handle computing tasks and meets the computing power needs of the low-altitude economy. Chengdu Hua Wei stated that the company's products are widely used in special fields, involving electronic, communication, control, measurement, and other technical categories. The company's chips are mainly general-purpose chips, and from a technical perspective, they can cover the application needs of the low-altitude economy field.
Of course, the low-altitude aircraft industry is still in its early stages of development, and the standard setting for related integrated circuit products is also in its infancy. The application of the above-mentioned automotive-grade integrated circuits in the eVTOL industry needs to carry out adaptive work according to the airworthiness requirements. However, it is undeniable that the low-altitude economy is a new application scenario for China's integrated circuit industry.
Challenges and Opportunities in the Low-Altitude Economy
In recent years, the traditional general aviation operations covered by the low-altitude economy, such as agricultural and forestry plant protection and power inspection, have maintained a stable growth trend. At the same time, emerging business forms such as aerial sightseeing, aviation sports, and medical rescue are also rapidly developing and growing. Taking drones as an example, as an important carrier of the low-altitude economy, the application of drones in fields such as personal consumption, geographic mapping, and film aerial photography has become increasingly mature, and on this basis, they continue to expand their application scope, such as the application in emergency rescue, communication relay, and meteorological detection is being continuously developed and deepened. In the logistics field, drones have also achieved large-scale application, injecting new vitality into the development of the low-altitude economy.
The development of the low-altitude economy seems to have entered a new spring, and aircraft companies have already felt the warmth of the water. Volant Company receives more than a hundred people for market research every week; Wofei Company also needs to deal with four or five similar reception tasks every day. In addition, companies such as EHang Intelligent, Fengfei Aviation, and Xiaopeng Huitian are also busy with receptions. The vigorous development trend in the field of the low-altitude economy is fully demonstrated.The journey of domestic aircraft enterprises is not limited to the domestic market. The main reason for such ambition is that compared to traditional helicopters, eVTOL (Electric Vertical Takeoff and Landing) aircraft have many significant advantages. Their structure is more streamlined, with fewer parts, which reduces manufacturing and maintenance costs. In addition, eVTOL aircraft are powered by electricity, ensuring higher safety and noise performance, making them more suitable for urban environments. In the future, eVTOL will be able to achieve long-distance, fast flights, while being flexible in short-distance travel to adapt to road and water environments, and even achieve aerial and underwater transitions. This tri-mobility capability will bring broader application prospects for eVTOL.
Of course, the road ahead for the low-altitude economy industry is still long, and some voices have pointed out that although the "low-altitude economy" is currently warmly sought after by the market, some investment institutions have issued warnings, pointing out that the policy promotion and order acquisition in this field may not be as optimistic as expected.
At present, the country has opened up low-altitude airspace, but the construction of air routes still requires local governments to increase investment. Up to now, 26 provincial governments have clearly proposed the strategic deployment of developing the low-altitude economy in their work reports. In the downstream application scenarios, the demand for timeliness (such as fresh food, business logistics) and areas with complex ground transportation conditions are expected to take the lead in the application of low-altitude flight.
In early April 2024, the world's first civilian ton-class eVTOL aircraft "Shengshi Long" successfully completed its first delivery, with its customer being a leading advanced air traffic operator in Japan, and the manufacturer of this aircraft is Shanghai Fengfei Aviation Technology Co., Ltd. This aircraft can carry 5 people per flight and is set as an "air taxi."
According to a report by Morgan Stanley, it is expected that the urban air travel market will reach a scale of more than 1.05 trillion US dollars by 2035. Currently, more than 600 companies worldwide are involved in research and development. According to the proportion of automotive integrated circuits accounting for 10% of the total vehicle cost, this will also be a market size of about 40 billion US dollars for the integrated circuit industry.
Whether it is necessary to ride the wind or break the waves, the low-altitude economy has taken off. Next, we need to see how long it can fly, how far it can fly, and how high it can fly?
