The semiconductor industry continues to slump, and the price of WiFi chip modules has risen by nearly 50%

Recently, internal sources said that WIFI chip suppliers such as MediaTek and Realtek will increase the price of WiFi 6 chips in the first quarter of 2022 by about 10%.

On November 1st, according to foreign media reports, due to the short supply of WiFi chips and the advantages of the good performance of the WiFi 6 market, MediaTek has raised the price of WiFi 6 chips by about 20% to 30% this quarter. Realtek once again in October. Reflecting the cost to customers, it has increased by 10% to 15%, and the cumulative increase this year has increased by at least 50%.

It is reported that Broadcom (Broadcom) WiFi chip has been delivered for more than 52 weeks, so Broadcom has raised WiFi prices by more than 20%. In this context, downstream terminal manufacturers have started the stockpiling mode one after another. MediaTek also followed up and raised the price of WiFi chips (mainly WiFi 6 chips) by 20%-30% in October.

Industry insiders said that due to the strong demand for the image sensor (CIS) signal processor (ISP) in terms of production capacity, the 28nm process was in short supply, resulting in a serious shortage of WiFi chips.

At present, MediaTek has not yet responded to the rumors of product price increases.

WiFi 6 core technology

Nowadays, there is an extreme shortage of WiFi chips, so that the supply is in short supply, and the price increase may be inseparable from the rapid development of WiFi 6 technology.

As early as September 16, 2019, the Wi-Fi Alliance announced the launch of the Wi-Fi 6 certification program, which aims to bring devices using next-generation 802.11ax Wi-Fi wireless communication technology to established standards.

This year, WiFi 6 technology has been fully popularized, and most of the Electronic devices released on the market, such as mobile phones, routers, etc., have used WiFi 6 technology.

WiFi6 mainly uses two core technologies: MU-MIMO and OFDMA, which improve efficiency and network capacity respectively. The maximum speed of Wi-Fi 6 can reach 9.6Gbps.

(Photo source pixabay)

MU-MIMO

MU-MIMO means that in a wireless communication system, a base station serves multiple mobile terminals at the same time, and the base stations make full use of the airspace resources of the antenna to communicate with multiple users at the same time.

WiFi 5 uses MU-MIMO technology in the downlink, and WiFi 6 continues the MU-MIMO (multi-user multiple-input multiple-output system) brought by WiFi 5, but WiFi 6 supports the full version of MU-MIMO technology and supports uplink and downlink. , which can support 8 terminal devices at the same time to transmit more data upstream/downstream, which is twice that of WiFi 5. WiFi 6 allows the router to use multiple antennas to communicate with multiple terminal devices at the same time, so as to achieve “multitasking”. Compared with the previous design that can only communicate with a single antenna and a single device at the same time, MU-MIMO is more capable of increasing the network speed and connecting more devices.

Nowadays, more and more devices need to be connected to Wi-Fi in each household. Within the same Wi-Fi network, watching a high-definition movie on TV is likely to make the mobile phone that is watching the live broadcast freeze. However, the MU-MIMO technology of WiFi 6 can solve this problem very well. WiFi 6 can handle the data transmission of 8 terminal devices at the same time.

OFDMA

Unlike WiFi 5, which uses OFDM (Orthogonal Frequency Division Multiplexing) technology, WiFi 6 borrows OFDMA used in cellular networks. Multiple terminals can transmit in parallel at the same time, without having to wait in line and compete with each other, thereby improving efficiency and reducing latency. For example, originally, only one carrier could transmit one data packet in one time period. After adopting OFDMA, it is equivalent to having multiple carriers transmitting multiple data packets simultaneously in one time period.

For heavy online gamers, network delay can affect the experience of a whole game, and the OFDMA technology of WiFi 6 can greatly reduce the delay.

After using OFDMA technology, the data packets in the game will be sent and received at the same time as the data packets of other devices, without waiting for the router to queue for processing, which means that in the same network environment, the game data packets can always be processed efficiently. .

WiFi 6 chips have become an important profit point for chip suppliers

(Photo source pixabay)

At present, the smartphone field has become an important entry point for major chip suppliers to enter the Wi-Fi 6 market, and various chip suppliers have begun to make efforts in the direction of Wi-Fi 6. For manufacturers, the smartphone field has become the company’s mainstay. A major profit point.

In 2021, Qualcomm, Broadcom and MediaTek will become the world’s top three smartphone Wi-Fi chip manufacturers, with a combined market size of $4.3 billion.

In the Wi-Fi 6 market, Qualcomm’s Snapdragon 865 has been “leading the way” for Qualcomm’s Wi-Fi 6 market. It is understood that in 2020, dozens of mobile phones including Xiaomi Mi 10 Pro, OPPO Find X2 series, VIVO X50 Pro, Meizu 17, etc. will use the Snapdragon 865, covering the low-end and high-end markets of 2,000 to 5,000 yuan.

For a long time, Broadcom has relied on cooperation with Apple to successfully occupy a place in the Wi-Fi 6 market. The iPhone 13 uses Broadcom’s WiFi chip. In addition, the first BCM4375 chip released by Broadcom has been applied to Samsung S20 series mobile phones. More importantly, Broadcom maintains a leading position in the field of high-end Wi-Fi chips. In 2020, Broadcom released the world’s first Wi-Fi 6E chipset BCM4389, which adopts 16nm process, with a 5-fold increase in bandwidth and a data transmission rate of 2.4Gbps. , to create differentiated technical advantages for the smartphone mobile platform.

In the past two years, MediaTek has been continuously launching new products. The Dimensity 1000 series is a product created by MediaTek based on the high-end market. It is understood that the Dimensity 1000 was launched in 2019. It adopts the 7nm process and directly benchmarks the performance of the Snapdragon 865 and Kirin 990. In 2020, MediaTek will launch the Dimensity 1000+. On October 1 this year, MediaTek announced the launch of the Filogic 830/630 two wireless SoC chips, it is obvious that MediaTek wants to regain a city.

For the current chip suppliers, the field of WiFi 6 chips is already a battleground. Whoever makes a breakthrough in WiFi 6 chip technology and leads the opponent will be able to win the market share of the opponent in one fell swoop. In the fiercely competitive Wi-Fi – On the Fi track, chip suppliers are looking for new development entry points, and while maintaining stable relationships with mobile phone manufacturers, they continue to expand their respective advantages in the field of smartphones.

However, the research and development of WiFi 6 chips by major chip suppliers has been blocked due to the epidemic.

Insufficient allocation of production capacity, WiFi chips are in short supply

The shortage of WiFi chips is mainly due to insufficient production capacity in the mature process of semiconductor chips, resulting in the supply of WiFi chips far less than the market needs. From the perspective of Broadcom, a leading chip company in global Netcom, the current delivery time is more than 52 weeks. For this reason, the price has been increased by more than 20%, and the foundry price has also been increased frequently. Therefore, MediaTek and Realtek have raised prices many times this year.

Not only that, some WIFI chip companies in China were also affected by production capacity, resulting in the third-quarter results falling short of expectations. Espressif Technology (688018.SH) and Allwinner Technology (300458.SZ) saw a decline in revenue in the third quarter compared to the second quarter. Both companies said that the main reason for the decline in revenue in the third quarter was that the production capacity could not keep up.

According to recent news, the time when the new production capacity of major fabs can be officially implemented generally falls in 2023, which will not catch up with the trend of significant growth in WiFi 6 penetration next year. In the absence of materials, Broadcom said that it will give priority to supplying Apple. This move will make the supply of WiFi 6 chips tight. More importantly, the world’s major foundries have indicated that they will continue to increase their chips in the first quarter of next year. According to the OEM quotation, MediaTek and Realtek also reported that due to rising costs and serious shortage of production capacity, the price of WiFi 6 chips will be raised again in the first quarter of 2022, by about 10%.

Epilogue

Today, the wafer foundry expansion plan still takes time. Even if the expansion is successful, the production capacity will take priority over cutting-edge chips and automotive chips. It is unknown how much capacity is left for WiFi chips. Therefore, there is a shortage of WiFi chips. Continued price increases may continue for some time.

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