Cellular IoT chip vendor Sequans Communications said in January that it expects to ship its second-generation Cat 1 chip in volume this year. In an interview with DIGITIMES Asia at CES 2023, the company's CEO highlighted Sequans' Cat 1bis chip, Calliope 2, and a 5G platform, Taurus, that is still under development and unannounced.
Based in France, Sequans is one of the largest communication chip design houses, with a strong focus on cellular IoT applications transitioning from 4G to 5G. The market size of cellular IoT, according to a report published by Ericsson at the end of 2022, was forecast to grow from 2.7 billion units to 5.5 billion units around 2028, with a CAGR of 12%.
According to DIGITIMES Research, growth of LPWAN applications, including NB-IoT and LTE-M, is driven by commercialization in more and more areas and government subsidies. Encouraged by governments, IC design houses are putting forward more solutions to meet demand. However, most IoT end-products can have a long lifetime of up to ten years. It remains a challenge for chip vendors to produce chips that can last for such a long time and to take care of maintenance and upgrades, said DIGITIMES Research analyst Jim Chien. The maintenance costs are expected to be a long-term expense for them.
Georges Karam, CEO of Sequans, said he is seeing great opportunities for Sequans' cellular IoT products to grow in the following five sectors: smart city (e.g. meters), fleet management (automotive), asset tracking systems, smart home and security, and medical applications such as e-health.
Karam said Sequans' largest customers are in USA and Japan. American telecommunication providers Verizon and AT&T are aggressively deploying new IoT technologies. More than 70% of Sequans' business take place in North America.
Karam said Sequans is also seeing China move towards deploying Cat 1 to complement NB-IoT – China has the world's largest NB-IoT network with more than one billion NB-IoT users. He said Sequans is now slowly penetrating the Chinese market as the company announced in the fourth quarter last year that it would be working with a Chinese 5G partner to drive sales in China.
Karam added that Sequans does not limit cellular technology to LPWAN products because Cat 1 can achieve both wider coverage and higher speed. Cat 1 has a global network that includes US, Japan, and China and can reach up to 10 Mbps, a rate that meets the requirements of security applications, and video and audio streaming.
"Covering IoT is not a story about only LTE-M and NB-IoT, but also about Cat 1 and even some applications where they need Cat 4 and higher 5G-NR," he said.
Sequans projects an average of 50% growth in its Cat 1 segment for the next five years. The company had a nice level of shipments of Cat 1 products in 2021 and 2022. With the launch of its Cat 1 second generation platform, Calliope 2, Sequans expects to more than double shipments in 2024, but Karam added that he is still cautious about the supply chain challenges this year.
While he is seeing the supply chain improve, Karam said Sequans would still need to plan ahead with suppliers and remain cautious this year. With that said, Karam is nonetheless hopeful that supply will return to normal in 2024.
Also seeing that manufacturers are shifting away from China, Sequans has commenced production in Vietnam and asked partners to build fabs in Vietnam.
The company announced last year a partnership with Japanese IDM Renesas. The partnership gave Renesas rights to manufacture the chips and has created a second source to the market since then.
Apart from TSMC and Renesas, Skyworks also does the packaging and manufactures integrated modules for Sequans.