Mobile modem chips are likely to become scarce strategic resources in the 5G era, now that Intel has decided to exit the 5G smartphone modem market to focus on 4G and 5G modems for PCs, IoT and smart home devices, according to industry sources.
Intel announced the decision soon after Apple and Qualcomm struck a surprise settlement in their ongoing patent infringement and royalty disputes related to Apple's use of Qualcomm modem chips in iPhones.
The Intel move and the Apple-Qualcomm settlement have indicated that 5G mobile modem chips can hardly be suitable for investment by non-dedicated makers, unlike smartphone APs, which handset vendors can develop on their own and secure profitable development as long as their annual shipments can reach a scale of over 100 million units, just as what Apple and Huawei have achieved, the sources commented.
This is because 5G mobile modem chips, though only responsible for signal transmission, must involve both sub6 GHz and mmWave technologies and be compatibile with 2G/3G/4/G/5G systems, the sources reasoned further.
At the moment, there are only five modem chip suppliers in the world, namely Qualcomm, Samsung Electronics, MediaTek, HiSilicon and Unisoc. Samsung and HiSilicon develop the chips for use on their own smartphones. Of the remaining three purely IC design houses, Qualcomm's modems can serve both iOS and Android systems, while MediaTek and Unisoc mainly support the Android camp.
In the 5G era, handset vendors are more interested in in-house development of AP chips than modem chips, and the world's existing five mobile modem chip suppliers are poised to embrace bright business prospects for the segment, industry sources noted.