Issue link: https://iconnect007.uberflip.com/i/1248324
18 PCB007 MAGAZINE I MAY 2020 want to ship from China because that's where most of their fabricator base is located, close to either China or Taiwan—outside of aerospace and defense. Matties: When you look out into the near-term future, what indicators are you paying atten- tion to in order to project your growth? Tushingham: We're doing the blocking and tackling, staying in very close contact with our OEM customers and our fabricator customers to understand what they're seeing. We also use market reports to validate our assumptions. We're looking at 5G base station installations primarily driven by China because it's 80–90% of the global volume, so we're closely monitor- ing what's going on with deployments in China on the 5G side. For automotive, we're involved in almost weekly or bi-weekly podcasts with the industry experts, looking at potential sce- narios for light vehicle shipments. Then, we have some modeling that we do based on light vehicle shipments to indicate how much radar content is going to be on those vehicles, and then we can project what we expect to see, in our volumes, from the automotive side. There are three main segments that drive a significant portion of our business. The key macro drivers—light vehicle shipments and 5G infrastructure deployments—are the two main external factors we track, and then we are con- stantly keeping in touch with our customers and seeing what they're projecting so we can make sure we have the right material in the right place at the right time. Matties: When you look at the 5G in China, what sort of time frame or pace do you think they're going to be moving at? Tushingham: The market numbers vary wild- ly. Before the COVID-19 situation, we heard reports for 2020 installations of anywhere between 550,000 base station deployments globally for 5G to the top end around 850,000– 900,000 base stations this year. We've consis- tently been forecasting in the 600,000–700,000 range. We were projecting that toward the end of last year, and that's still a decent range. It pushed out a little bit from Q1, but we see an acceleration in Q2 and Q3. China Mobile an- nounced the results of a tender they put out. China Unicom and China Telecom are finaliz- ing a tender, which we expect to be released any day now, which will see a big surge in de- ployments in Q2 and Q3. Everyone is stating they want to get most of these deployed by the end of Q3. That's a bit aggressive, and I expect we'll see deployments lead through the rest of the year. Overall, we expect 5G in 2020 to be in line with what we are forecasting toward the end of last year. Matties: What's your expectation for recovery in the automotive sector? Tushingham: This is one where there are dif- ferent opinions depending on who we talk to; even different OEMs have different opinions. We're in the ADAS space, so it's complicated where light vehicle shipments could go down, but you got more ADAS content per vehicle, so our ADAS business grows at a higher growth rate than light vehicle shipments. The concern for us will be if some of the newer car models get delayed. OEMs canceling summer testing, for example, will push out new model releas- es, and new models typically have more radar content on them, which means more content for Rogers. While the light vehicle shipments is a short-term concern, such as a Q2 into Q3 concern, if there is a significant push out in new model releases, that could be a slightly longer revamp for us. We're predicting poten- tially not so much a V-shaped recovery, but more of a U-shaped recovery. Even market analysts have five or six differ- ent models on automotive scenarios, with no one stating which one is most likely. Again, a concern is that even if factories open, is the consumer demand going to be there? Even if the consumer demand doesn't come back, if the factories are open and the R&D efforts turn back on, that's a positive for us in the medium or long term because it means they're working on the new vehicle releases again that do have the higher radar content.