Following Huawei's example, they are making a big push into chips

Latest update time：2024-03-13

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Huawei's achievements in the communications field over the past decade are obvious to all. Especially in the field of base stations, their ability to stay ahead of their competitors is closely related to their investment in integrated circuits.

According to Nikkei, designing the chips allows device makers to improve network efficiency and differentiate their wireless connectivity technology from competitors. So in fact, in addition to Huawei, Huawei's competitors such as Ericsson and Nokia also invested in chips in the past.

However, Nikkei reports pointed out that they seem to be not satisfied with the status quo and still want to continue to increase investment in the chip field. Taking Ericsson as an example, Nikkei stated in a report that the world's second largest telecommunications equipment provider after Huawei has increased investment in chip development in the past six or seven years.

Why invest in self-developed chips?

As mentioned before, these communication equipment giants have actually been chip players for a long time, but why are they increasing investment now?

In an interview with a Nikkei reporter, Freddie Sodergren, head of Ericsson's commercial area network technology and strategy, said that the reason why Ericsson will increase its investment in chips is because Ericsson sees that with the development of 5G, [chip development] will be carried out internally. become more important than ever.

Sodergren further noted that Ericsson still purchases field-programmable gate array (FPGA) chips for some of its products. But as 5G connectivity develops, requirements for higher computing power and lower power consumption have become more critical, prompting Ericsson to expand its chip development team.

Nikkei said FPGAs are "off-the-shelf" chips that users can program for specific purposes. But they're power-hungry and not cheap: A single base-station FPGA can cost more than $1,000, according to industry insiders.

Ericsson even bluntly stated on its official website that creating value in the 5G era requires unremitting innovation. The tight co-design of Ericsson chips with hardware and software plays a vital role in facilitating the creation of high-performance, energy-efficient and lightweight products for a variety of deployment scenarios today and in the future.

Jane Rygaard, global head of Nokia, also told Nikkei reporters: "We realize that from 4G to 5G and now 6G, capabilities and understanding of needs are closely related to how we actually provide higher performance with lower power consumption. ”

"Of course, we can continue to go out and buy [chips], but when it comes to how we want to get performance and stability, that means the design [needs to] be in-house," Jane Rygaard said.

According to the recent actions of these two companies, the controversy surrounding openRAN is another reason for them to invest in self-developed chips. To explain what OPENRAN is, we actually need to start with the development of base stations themselves. But in a nutshell, Open RAN is an ongoing shift in mobile network architecture, primarily aimed at enabling service providers to use non-proprietary sub-components from different vendors. These new practices have triggered some new discussions on chips.

For example, when AT&T began building out its "open" radio access network (RAN) after striking a $14 billion deal with Ericsson, it wasn't going to use Intel's chips to develop its most cumbersome software. "First, we will take advantage of Ericsson's silicon roadmap to bring Open Radio to our network," an AT&T spokesperson previously said in an email. "As the silicon solution matures, we will introduce updates based on Intel's roadmap." Multiple open architecture solutions.”

In other words, although Intel and server partner Dell are mentioned in AT&T's official release, it can be confirmed that this AT&T network will not be a "cloud" RAN in the first place. Networks are often purpose-built, fusing custom chips with proprietary software from the start.

Michael Begley, head of Ericsson's RAN computing product line, also said in an email: "Currently, dedicated hardware is more energy efficient than general-purpose hardware for RAN applications, although this gap will narrow with plans for future processor improvements. "However, given its optimization points, dedicated hardware will continue to be the most energy-efficient and compact hardware for future radio site deployments."

In addition, Ericsson's Finnish rival Nokia has also been focusing on self-research of chips for layer 1 RAN functions because these functions require the most resources. Only the less demanding functions (Layer 2 and Layer 3) in cloud RAN deployments are reserved for general-purpose processors.

Nokia said in a previously released white paper that some central processing units (CPUs) used for cloud RAN "are not actually general-purpose CPUs." “They are essentially cloud RAN dedicated CPUs.”

In addition, the arrival of 6G also gave them greater determination, so they increased their investment in chips. Stephane Teral, founder and chief analyst of Teral Research, also told Nikkei Asia that customization is becoming increasingly important because "5G and artificial intelligence require increasingly powerful computing power in network infrastructure."

Will Chu, senior vice president and general manager of Marvell's custom computer and storage business, also pointed out that the desire for competition is the "number one" factor driving the rise of custom chips. "Every time they take a step forward in these standards from 2G, 3G, 4G, 5G to 6G, they need better and better chips," he said.

Another important factor driving the rise of custom semiconductors is the convergence of the 5G and AI eras, which forces cloud service providers to upgrade their infrastructure, Chu said. "We see a growing market for custom [chip] solutions. The main factors driving this are the data economy and the computing needs of artificial intelligence. You need a new infrastructure to support all applications."

However, Chu said, citing his observation as a chip industry veteran, that only leading companies, primarily top telecom equipment manufacturers and cloud service providers, have the capabilities and resources to develop or co-develop custom chips.

The battle begins quietly

Although there was no fanfare, the battle for chips between the two started quietly.

Ericsson's Sodergren told Nikkei that the company's application-specific integrated circuits unit Ericsson Silicon has opened a factory in Austin, Texas, and expanded its team in Sweden, adding that the joint venture employs "hundreds of people" "Engineer".

He said that for some internal chips, Ericsson "always" uses the latest chip manufacturing node and launches a new generation of chips every year.

It is understood that Ericsson has been cooperating with US chip giant Intel to develop fifth-generation (5G) networks for the past ten years. Last July, Ericsson announced it was expanding its partnership to leverage Intel's 18A process and manufacturing technology for the former's future 5G infrastructure.

A statement from Intel revealed that it is working with the Swedish telecommunications equipment manufacturer to use its most advanced disclosed manufacturing technology to manufacture customized chips for Ericsson's 5G network equipment.

"We play a more important role now than before," Sodergren said. "I think that's one of the reasons why Ericsson is really leading the industry... We've done that ourselves."

Ericsson's Finnish rival Nokia took a similar approach and launched the ReefShark series of system-on-chip (SoC) products in 2018.

Nokia says its latest massive MIMO radio is half the weight of its predecessor, thanks to improved power efficiency and improved radio performance thanks to the company's new ReefShark chipset.

Nokia also brings network processor chips designed to ensure customers' businesses continue to thrive in this increasingly uncertain and challenging era.

For example, PF5, built on FP4, adds more capacity and security features while significantly reducing power consumption based on flexible functionality and an uncompromising IP chip design approach. FP5 allows you to rapidly grow services, eliminate new or evolving cybersecurity threats, and meet growing capacity needs while maintaining optimal efficiency, performance, and scale.

At the beginning of this year, Nokia also announced plans to invest 360 million euros in its two factories in Ulm and Nuremberg, Germany. The funds will be used for the research and development of software, hardware and chips for 5G-Advanced and 6G communication systems.

Nokia Mobile Networks President Tommi Uitto praised the latest investment opportunity, saying it "will support our efforts to advance the telecommunications industry in Germany and Europe."

Uitto continued: "In particular, it will contribute to our research into microelectronics to power future technologies such as 6G, artificial intelligence and virtual universes, and to develop more energy-efficient and powerful networks."

As Nikkei said, developing telecommunications network chips requires massive resources and cutting-edge production technology. As a result, these companies are partnering with well-known developers such as Marvell, Broadcom, and Intel.

In addition, the competition between the two sides for chip talents has become increasingly fierce.

It is understood that Derek Urbaniak, who has previously held chip design roles at companies such as AMD and Oracle, has served as Ericsson's head of chip engineering for the past six and a half years, but he announced his resignation from the Swedish equipment manufacturer in a recent LinkedIn post. notice, but did not reveal what to do next. However, according to multiple people familiar with the matter, he will join Nokia in a similar position.

Related reports indicate that Urbaniak is ready to replace Veijo Kontas, Nokia's head of system-on-chip development, who will retire later this year. Kontas took up his current position in January 2019 and is believed to have played an important role in Nokia's 5G transformation, after Nokia underperformed in the delivery of 10nm base station chips and switched to more power-hungry field programmable gate arrays (FPGAs) . The company subsequently brought in Broadcom and Marvell as 5G chip suppliers along with Intel and regained market share lost during the 5G issues, according to third-party analyst reports.

write at the end

At this critical time when 5G is moving towards 6G, it is understandable that they are moving towards self-research of more chips. What's more, openRAN, which they strongly promote, also needs the help of more self-developed chips.

But from another perspective, for some well-known reasons, they may not need to face Huawei in the international market, which seems to make the entire competition lose some focus.

But having said that, in the process of writing this article, we discovered that Ericsson was involved in the chip business as early as 2002. But they sold the related company to Infineon in the process. It was also in this year that STMicroelectronics acquired Alcatel’s wireless chip business.

This makes the story of Ericsson and NOKIA increasing investment in chips more interesting.

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