After routers, where is the next tipping point for Wi-Fi 6?

Jiwei.com reported that Wi-Fi 6, which was only released in mid-2019, is sweeping the wireless connection market at an unexpected speed.

Last year, with the booming demand for routers, Wi-Fi 6 received unprecedented popularity, with shipments in the tens of millions and prices dropping to just over a hundred yuan, a situation that has never happened in the more than 20 years of Wi-Fi technology evolution.

At present, the "speed and passion" of Wi-Fi 6 is still continuing. Compared with the handful of mainland Chinese manufacturers participating in the router chip field, the IoT Wi-Fi 6 chip track, which is cost-sensitive and closely integrated with application innovation, is even more bustling. The Wi-Fi 6 blue ocean market focusing on smart homes is on the eve of an explosion.

Hot router market

Unlike any previous generation of Wi-Fi standards, Wi-Fi 6 has been marked with aristocratic status since its release in 2019.

That year, the successive additions of iPhone 11 and Samsung S10 made Wi-Fi 6 a standard feature of flagship phones. Subsequently, the Wi-Fi 6 router market exploded in 2020, and Wi-Fi 6 entered the market at an unprecedented speed.

The emergence of Wi-Fi 6 is synchronized with the progress of 5G commercialization, perfectly matching the upgraded experience brought by 5G. It caters to the upgrade needs of the network in scenarios such as stay-at-home economy, remote office, and online education during the epidemic. In addition, the strong marketing launched by many mobile phone manufacturers such as Xiaomi and OPPO, and the increased centralized procurement efforts of the three major operators, have accelerated the promotion and popularization of Wi-Fi 6 on the consumer side.

Therefore, the Wi-Fi 6 storm came quickly and violently. Even in the face of many challenges such as insufficient supply of core chips and tight industry production capacity at the beginning of last year, the Chinese market played a pioneering role, with domestic Wi-Fi 6 router sales reaching tens of millions of units and quickly dropping to a price of hundreds of yuan, which has never happened in any previous generation of Wi-Fi standard upgrades.

Because the router product update cycle is generally 2-3 years and the existing market is huge, the industry believes that after last year's Wi-Fi 6 first year, the popularization trend of Wi-Fi 6 routers this year will be more obvious. In addition, nowadays 5G mobile phones basically fully support Wi-Fi 6 functions, Wi-Fi 6 has entered a period of rapid introduction and high-speed growth.

According to data from industry research firm TSR, in 2020, about 3.3 billion Wi-Fi chips were shipped worldwide, of which about 400 million were Wi-Fi 6 chips (mainly including routers, mobile phones, tablets, etc.). Gartner estimates that in 2024, Wi-Fi 6 will account for half of Wi-Fi chip shipments, becoming the real mainstream.

The above is a general inference based on the past evolution of Wi-Fi industry standards. However, in fact, due to the revolutionary nature of the Wi-Fi 6 technical standard and the degree of market popularity, the full popularization of Wi-Fi 6 may come faster than expected.

The estimate given by IDC is consistent with this judgment. It believes that global shipments of Wi-Fi 6 devices will reach 2 billion this year, more than half of Wi-Fi device shipments. Next year, shipments of Wi-Fi 6 chips will exceed 3.5 billion, accounting for 79% of the overall shipments of Wi-Fi devices.

The market concentration of traditional Wi-Fi chips is very high. Among the more than 3 billion chips shipped last year, nearly 80% of the market share was occupied by chip giants such as Qualcomm, Broadcom, and MediaTek. Especially in the field of mid-to-high-end Wi-Fi chips such as routers and mobile phones, almost all of them are occupied by overseas and Taiwanese manufacturers. These early-investing manufacturers, with their first-mover advantage, also almost exclusively enjoyed the dividends of the first wave of Wi-Fi 6 last year.

Currently, there are only a handful of manufacturers in China that have the ability to develop and design Wi-Fi 6 router chips, including Huawei HiSilicon (which has launched Lingxiao 650 Wi-Fi), SiChang Communications (under development, expected to put the first Wi-Fi 6 router chip into production by the end of the year), and Longli Semiconductor (under development of Wi-Fi 6 AP chips). The problem of independent control needs to be solved urgently.

In an interview with Jiwei.com, Li Xingren, founder of Sichang Communication, talked about the difficulties in developing Wi-Fi 6 router chips: it requires talents in RF, baseband, protocol stack, etc., especially the 1024QAM modulation of Wi-Fi 6 greatly increases the requirements for RF. In Li Xingren's opinion, the research and development of Wi-Fi 6 router chips requires at least 50 million US dollars in capital reserves and a cycle of more than 3 years.

康希通信市场副总裁虞强表示，5G和Wi-Fi 6芯片对于射频部分的性能要求显著提升，射频前端芯片如何在超高线性度下降低功耗，是相关厂商面临的主要挑战。

IoT chips will become a new blue ocean

Compared with Wi-Fi 6 router chips, which have higher technical barriers, Wi-Fi 6 IoT chips may be a blue ocean that is easier to reach for domestic semiconductor manufacturers.

Wi-Fi 6被视为无线技术发展的里程碑，主要在于提升了多用户、大带宽方面的体验，使多设备同时接入成为可能，而且提升了效率并显著降低功耗，为更好地迎合物联网时代的发展提供了条件，在Wi-Fi 6路由器全面普及形成网络侧的支撑后，Wi-Fi 6物联网市场也将被点燃。

At present, there are quite a few domestic Wi-Fi IoT chip manufacturers, but they are mainly concentrated on Wi-Fi 4. With the increase in market demand for Wi-Fi 6, many domestic manufacturers have begun to plan to enter this field.

According to public information and Jiwei.com, the current progress of domestic Wi-Fi 6 IoT chip-related companies and products has been sorted out:

Broadcom Integrated: In February this year, it launched the first Wi-Fi 6 chip for IoT applications. IoT applications for smart homes. Espressif: In April this year, it launched the first 32-bit RISC-V SoC with integrated Wi-Fi 6 + Bluetooth 5 (LE). The 2021 semi-annual report released by Espressif shows that the company is developing 5GHz Wi-Fi 6 technology.

Speedcom Semiconductor: The company has completed the design and development of the first Wi-Fi 6 chip, and expects to achieve mass production this year. The product is terminal-oriented and suitable for application scenarios that require high throughput, such as consumer electronics such as smartphones, laptops, HDTVs and set-top boxes. At the same time, it is developing high-performance Wi-Fi 6 routing chips, as well as highly integrated and low-power AIoT chips for the Internet of Things.

ASR Technology (ASR): According to the prospectus released in June this year, ASR Technology's new generation of Wi-Fi 6 IoT chips are under development. The development of the core algorithm of the physical layer and the establishment of the algorithm simulation link have been completed, and the design of the entire system is being gradually carried out.

In addition, according to Jiwei.com, veteran router manufacturers such as TP-Link have formed teams to develop Wi-Fi 6 chips for smart homes. Some traditional home appliance manufacturers have also begun to deploy Wi-Fi 6 chips around smart home products.

Since mainland IoT chip manufacturers are generally limited by their technical strength, they mainly rely on IP solutions from a few foreign IP manufacturers for the core IP of Wi-Fi chips.

Wi-Fi's core IP includes baseband and radio frequency. In terms of radio frequency IP, it was previously mainly provided by the Dutch manufacturer Catena. After Catena was acquired by NXP in 2012, it became an internal department of NXP last year and no longer licenses related IP to external parties. Baseband IP is mainly provided by the Israeli manufacturer CEVA.

Imagination released the low-power Wi-Fi 6 IP for the Internet of Things in July last year, but its main products are still the RF and baseband IP of Wi-Fi 5. In addition, at the end of last year, Imagination's Wi-Fi development team and IP assets were acquired by Norwegian chip maker Nordic.

Therefore, the number of Wi-Fi 6 IoT chip IP manufacturers available in the market is decreasing or even disappearing. For domestic IoT chip manufacturers, this will affect the research and development progress of Wi-Fi 6 IoT chips and lead to the convergence of chip solutions in differentiation.

This situation is expected to improve. According to Jiwei.com, Ruichengxinwei, a domestic IoT IP manufacturer, is developing Wi-Fi 6 RF IP. The IP solution includes Wi-Fi 6 RF IP that supports the 2.4GHz frequency band (mainly for IoT applications) and Wi-Fi 6 RF IP that supports both 2.4GHz and 5.8GHz dual-bands (mainly for high-speed applications such as set-top boxes, cameras, and routers).

"We have developed a Wi-Fi 6 RF IP based on the 22nm CMOS process, which has the characteristics of high performance, small area, stability and reliability. This Wi-Fi 6 IP is a Combo IP and supports BLE/BT Bluetooth dual modes. It can help customers quickly launch Wi-Fi 6 SoC or Wi-Fi 6/Bluetooth Combo chips. Several customer partners have expressed their intention to cooperate." said Yang Yi, deputy general manager of Ruichengxinwei.

How do startups break through?

Although players in the domestic Wi-Fi 6 IoT Wi-Fi chip market are gradually gathering, including some start-ups, they are still very few compared to the vast market space. And compared with international giants, mainland Wi-Fi chip manufacturers generally have smaller capital and scale, and relatively weak R&D capabilities, which have certain disadvantages.

In this case, how can we break through and tap into the blue ocean of Wi-Fi 6 IoT chips?

A person in charge of a domestic Wi-Fi 6 IoT chip manufacturer told Jiwei.com that he believes the success of Wi-Fi 6 IoT chip companies mainly depends on three factors:

一是技术能力。Wi-Fi 6芯片产品由射频、基带和协议栈三部分组成，系统复杂度高，设计难度大，兼容性要求高。相较于Wi-Fi 4和Wi-Fi 5，Wi-Fi 6的研发难度显著上升，对于射频方面的要求将越发严苛，射频前端性能也是很多芯片厂商的痛点和技术研发难点。

Therefore, in the view of this person, on the one hand, it is necessary to maintain continuous investment in funds and talents in key technology fields. On the other hand, for those IoT chip manufacturers who currently do not have the ability to develop Wi-Fi 6 chips in the short term but want to enter the Wi-Fi 6 market, fully realizing IP self-development not only takes a long time, but also requires a large investment. In the cost-sensitive and highly competitive IoT chip field, it is even more uneconomical.