4G chips: oligopoly dominates 5-mode chips

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With the rapid development of 4G industry in my country, the competition in China's 4G terminal chip market will continue to intensify in 2014. How 4G terminal chip manufacturers can determine their own differentiation in various fields such as multi-mode chip performance, market positioning, and pricing strategy, and how to establish competitiveness in the new LTE market have become the focus of the industry.

The trend of multifunctional integration is obvious

As we all know, terminals and chips have always been the bottleneck restricting the development of the TDD industry. However, according to the reporter's understanding, 15 domestic and foreign manufacturers have developed more than 40 TD-LTE chips. The current situation of 4G terminal chips is much better than that of TD-SCDMA in its early stages.

In the first half of 2013, the shipment volume of communication chips reached 1.1 billion. With the acceleration of LTE commercialization, the long-term coexistence of multiple networks has made multi-frequency and multi-mode the basic requirements for the development of communication chip technology. At the same time, it also has outstanding technical advantages in the integration of RF chips and RF front-ends required for multi-mode and multi-frequency.

In terms of application processing chips, in order to meet the needs of mobile application innovation, two technical upgrade paths have been formed around processing capabilities: one is to continue to increase the degree of multi-core reuse, represented by the eight-core chips launched by MediaTek and Samsung, which can achieve flexible scheduling of eight cores. The other is to achieve overall upgrades by improving the single-core processing capabilities, represented by the 64-bit ARM architecture chips launched by Apple and Qualcomm.

Xu Zhiyuan, an expert from the Telecommunication Research Institute of the Ministry of Industry and Information Technology, told China Electronics News that the two technology upgrade paths are showing an overlapping and integrated development trend. Multi-core chips have excellent multi-tasking capabilities, support excellent image processing and rich multimedia specifications, and the chip infrastructure is upgraded to 64 bits while also fully drawing on existing multi-core parallel technology to achieve a significant leap in processing capabilities. At present, the above two technical routes have received positive responses from chip design companies.

In addition, the trend of multifunctional integration of mobile chips is also continuing to strengthen. Data shows that single-chip solutions account for more than 50% of global smartphone shipments, and nearly 90% in my country. Integrated single chips that focus on integrating application processors and communication baseband processors are popular in the market due to their advantages in cost-effectiveness and power consumption control, and are developing rapidly.

"From the Qualcomm integrated single-chip products used in multiple versions of Samsung Galaxy series terminals, we can see that single chips have broken through the traditional development concept of being mostly used in low-end phones and are gradually penetrating into mid-to-high-end models." Xu Zhiyuan said. It is reported that Leadcore, Marvell, HiSilicon, Spreadtrum, Intel, Qualcomm, etc. are also important participants in integrated chips. In addition, Leadcore, ZTE Micro, MTK, and Broadcom have released 28nm multi-mode TD-LTE SoC chips, and Intel, Chongqing University of Posts and Telecommunications, and Spreadtrum are also actively developing 28nm multi-mode TD-LTE SoC chips.

Giants are fighting for the mid- and low-end market

On the one hand, there is the rapid development of chip technology, and on the other hand, there is the strong market demand. The latest data shows that the TD-LTE SoC chips of HiSilicon, Marvell, and Qualcomm have been mass-produced, with cumulative shipments exceeding 12 million pieces. Due to insufficient stock, the market was once in short supply. As Zhang Lu, director of Marvell's mobile products, said in an interview with a reporter from China Electronics News, the speed of LTE development in the first half of 2014 was beyond everyone's expectations.

Faced with the rapid development of China's LTE market, especially the huge number of 4G terminal purchases by operators, domestic and foreign chip manufacturers have adjusted their strategies in an attempt to quickly enter the market. For example, Qualcomm, which has an absolute advantage in the field of high-end 4G multi-mode chips, has launched a new microprocessor chip with integrated LTE function. Its products have the advantages of low power consumption and low price, and are suitable for the popular low-end 4G smartphones in the domestic market.

Industry analysts pointed out that foreign chip companies have been rushing into the Chinese mobile phone chip market by offering low prices, which to a certain extent also shows that international manufacturers are ready to sacrifice gross profit in exchange for market share.

Broadcom, which has long been at a disadvantage in the mobile phone chip market, recently launched its first 4G LTE multi-mode chip after acquiring Renesas' 4G assets and accumulating LTE technology, targeting the mid-to-low-end market. The industry believes that Broadcom's move is intended to compete with Qualcomm, MediaTek and other manufacturers in the mid-to-low-end mobile phone market and start a war.

After Intel, the chip giant in the PC era, acquired Infineon, it has readjusted its chip strategy, launched highly price-competitive 4G chips in the second half of 2013, and began to develop products more targeted at smartphones priced below US$300, hoping to expand its share in the mid- and low-end smartphone market.

In the early stage of LTE, most chip companies closely cooperated with terminal manufacturers and operators, and chose to sacrifice certain costs to quickly occupy the market, which became the strategy of most chip companies. For example, the Coolpad 8720L equipped with Marvell 4G chips was well received by the market as soon as it was launched. In China Mobile's customized mobile phone channel, the sales volume of this mobile phone has ranked second among all TD-LTE mobile phones, second only to the super star mobile phone iPhone5s. Zhang Lu, director of Marvell's mobile products, also said that Marvell will have more cost-effective LTE multi-mode single-chip solutions commercially available in the international market in 2014.

How domestic enterprises respond

At present, Qualcomm has occupied the vast majority of the LTE multi-mode multi-frequency chip market share by virtue of its advantages in technology and market. However, some analysts pointed out that with the commercialization of 4G multi-mode chip products of MediaTek and HiSilicon in the first half of 2014, and Spreadtrum and Unicore in the end of 2014, the entire LTE multi-mode multi-frequency chip market will see a turn in the middle of 2014, and competition will continue to intensify, and the situation of oligopoly dominating the market may no longer exist.

Gartner research director Sheng Linghai predicts that 4G multi-mode chips will show a "20% to 80%" trend in 2014, with shipments in the first half of the year at around 20%, and in the second half of the year, major chip manufacturers will realize multi-mode chip mass production, which will surge to 80%. But at the same time, he believes that in the five-mode 4G chip market, at least in 2014, international manufacturers will still play the leading role.

According to Zhou Laiping, a market analyst at the Shenzhen Semiconductor Industry Association, HiSilicon may be the only Chinese force in the field of 4G five-mode chips this year. "HiSilicon's moves in the second half of this year should be relatively large. Previously, HiSilicon's five-mode chips were mostly used in Huawei phones, but in the second half of the year, several products will be launched and licensed to other mobile phone manufacturers," Zhou Laiping said.

Although China Mobile has "abandoned" the three-mode in its latest terminal customization strategy, the industry is generally optimistic about 4G three-mode chips, which will become the capital for domestic chip companies to compete with international giants in the second half of this year. "Although China Mobile has cut off the three-mode 4G chips in public channels, with the help of the channel power of emerging markets such as Internet companies and virtual operators, there is still market space for domestic three-mode 4G chips." A person in charge of a domestic chip manufacturer told the reporter of China Electronics News.

How should Chinese chip companies respond to the fact that foreign companies are eyeing the domestic 4G multi-mode chip market and frequently playing the low-end card? Sheng Linghai believes that in addition to domestic companies themselves constantly "cultivating their internal strength" and improving their R&D level and technical strength, relevant policy support is also needed at the national level.

A relevant person in charge of Spreadtrum said in an interview with reporters that China is the world's largest mobile communications market and mobile terminal base, which will enable domestic chip companies to gain an advantage in market competition, rely on the advantages of the terminal industry chain to gain a foothold in the mid- and low-end smartphone market, and gradually move towards high-end product research and development.

Some domestic chip manufacturers also said that the focus of foreign chip manufacturers on the low-end and mid-range 4G multi-mode chip field will not become a pressure in the short term. "The low-end and mid-range market is costly for foreign chip manufacturers. In addition, facing some small and medium-sized enterprises, domestic chip companies still have advantages in localized customer service capabilities, service response and technical support." A relevant person in charge of Lianxin Technology told the reporter of China Electronics News.

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