Only a few years ago, Wireless Watch was taking only a limited interest in the semiconductor industry. In the mobile world, the networks remained dominated by proprietary chips designed by the major vendors so the major interest in covering the merchant chip industry focused on devices. Even there, significant change was rare as Qualcomm hung onto its domination of sales and intellectual property in the handset system-on-chip over successive generations, seeing off challenges from Intel, Broadcom and many others.
Now the mobile semiconductor landscape is very different and coverage of its major players is fundamental to understanding the main drivers of the 5G era. There are many reasons for this, but three are particularly foundational, and play a central role in events of the past few weeks. These are:
- Finally, in devices, there may be a credible challenger for Qualcomm’s crown. Last month, reports indicated that MediaTek of Taiwan had overtaken the US giant in handset SoC sales in 2020 (though not in 5G, in which, according to Omdia figures, Qualcomm powered 39% of devices sold last year). In the sector as a whole, MediaTek is estimated to have taken 27% global share, ahead of Qualcomm’s 25% – partly as a result of its recent rejuvenation of its flagging mobile chip portfolio; partly as a side-effect of the restrictions on Huawei accessing foundry teechnlogy, which has driven the Chinese vendor to do more business with MediaTek rather than its own HiSilicon subsidiary. Huawei’s own decline in handsets, thanks to international sanctions, has also boosted competitors such as Xiaomi, which are major MediaTek customers.
- The architecture of the 5G network is transitioning slowly towards the cloud. Operators are just starting to plan and even deploy disaggregated, virtualized networks, initially mainly in small cell networks and greenfield operators, but with cloud-based macro RANs on the cards for the mid-2020s. This means vendors and operators will be working closely with merchant providers of cloud processors, and accelerator chips for high performance RAN functions such as dynamic spectrum sharing. The aim is to make standard processors, graphics processors and FPGAs (field programmable gate arrays) capable of supporting even the most demanding 5G processes in cloud servers and white box base stations or routers. In parallel, large vendors such as Nokia are also turning to merchant chips partners (Marvell, Intel, Broadcom) to design their full base station chip portfolio, though Ericsson remains committed to its own silicon for functions above the cloud infrastructure, while Huawei and Samsung have inhouse chip divisions.
- Hand-in-hand with RAN disaggregation and virtualization comes the prospect of an open multivendor architecture, and Open RAN is accelerating progress in a common processor platform on which large numbers of equipment vendors could, in theory at least, innovate without requiring the massive R&D budgets of the tier one equipment suppliers. This opens the opportunity for a giant such as Intel or Qualcomm to supply the underlying architecture for the next generation of mobile networks, dominating a common platform as Intel x86 did in PCs. But it may also pave the way for a common platform based on a more open architecture, such as ARM or even RISC-V. That would enable a larger number of chip providers to target the RAN, while preserving common foundations that will be essential to scale. Marvell’s ARM-based platform, which spans many links in the vRAN chain, is a good example.
These trends make recent announcements by ARM and Intel of high interest to 5G players (see below). ARM unveiled its most significant new architecture in years, v9, while Intel’s new CEO, Pat Gelsinger, revealed the firm’s new Ice Lake processor and a broad growth strategy that is notably telco-centric in many areas.
But all this is playing out against the background of bigger global movements, notably the impact of the pandemic and of US/China geopolitics on foundries and chip availability. The well-publicized shift of chip manufacturing capacity from the stagnant automotive sector towards telecoms – by contrast, largely buoyed by Covid-19 and stay-at-home policies – will have ripple effects throughout 2021 and beyond.
And restrictions on Huawei’s access to international components and foundry technologies are simultaneously intensifying China’s investment in a homegrown semiconductor industry, with global consequences, while worsening short-term shortages for the country’s huge telecoms vendor. That was a significant theme of the annual Huawei Analyst Summit, which kicked off with an address from rotating chairman Eric Xu yesterday (full coverage next week).
All this shows that the next year will be a tumultuous one for the increasingly complex semiconductor ecosystem that enables 5G networks and devices, one in which the balance of power will shift one way or another, shaping the platform choices that will be available for operators as they migrate to the radical new generation of mobile technology.