Wi-Fi 6/6E is already mainstream in 2023, so when will the Wi-Fi 7 boom occur? Wireless broadband equipment manufacturers pointed out that after testing the waters in 2023, 2024 will certainly be the main growth period of Wi-Fi 7. The only variable is the global economic development in 2024. Whether it will be a force that promotes technological upgrades or hinders growth remains to be seen.
Wireless broadband module makers Sercomm and Arcadyan both stated that 2024 will be the year that Wi-Fi 7 takes off. Sercomm chairman James Wang stated that both consumer-focused telecom operators and corporate-focused clients are highly interested in Wi-Fi 7. Wi-Fi 7 will absolutely be the main growth momentum in 2024.
Wang pointed out that Wi-Fi 6/6E shipments to North American corporations in 2Q23 were still mostly done through air transport. Compared to telecom operators, which are already adjusting inventory, the strong demand on the corporate side is puzzling. However, this also means that the third quarter will be a period of inventory adjustment, with shipments relaunching after four quarters of weak demand.
Arcadyan pointed out that Wi-Fi 7 products have already started shipping in 2023, but initial volumes have been small. Significant growth is estimated to occur in the second half of 2024. This coincides with what Sercomm said. From the estimates of the two major wireless broadband equipment makers, we can paint a clear picture of the future growth trajectory of Wi-Fi 7.
In addition to CPE (customer-premises equipment) makers' optimism that Wi-Fi 7 will see growth in 2024, notebooks equipped with Wi-Fi 7 will also start shipping in volume in 2024. Intel announced back in 2022 that it has developed related technologies and will provide them to notebook brands in 2023. The notebook supply chain stated that these products are expected to launch by the end of the year.
However, amidst all this optimism, the industry pointed out that the one uncertain variable is on the market demand side rather than the industry side. The global economy is always changing. On one hand, the US recently reported an initial quarterly GDP growth of 2.4% in 2Q23, which is better than the 2% in 1Q23 and the market expectation of 1.8%. On the other hand, the US bond yield continues to be inverted, leading to concerns about an economic recession.
The industry noted that while Wi-Fi 7 has extremely high internet throughput and larger bandwidth, it ultimately depends on the consumers' purchasing power. Purchasing power is linked to the economic situation, which is the most challenging part to predict. Based on the demand of telecom operators, both Europe and the US are gradually recovering from inventory clearance, with Europe being the faster of the two.
Sercomm pointed out that Europe is affected by soaring prices after the Russia-Ukraine war broke out. Clients began to adjust their inventories, resulting in a sluggish demand that has been ongoing for more than four quarters. Currently, clients are starting to show signs of demand, which is expected to be more apparent in the fourth quarter. As with the US, the adjustment started at the end of 2022 and is set to return to normal by 2Q24.
Arcadyan had a great performance in 2Q23, reporting quarterly revenue of NT$12.138 billion (US$384 million), a 10.13% growth compared to the previous quarter, and a record high. The quarterly gross profit margin reached 14.22%, and the operating profit margin reached 5.68%, both YoY increases. The company estimated that, with the boost from orders, revenue can continue to grow in the third quarter, with a growth rate in the high single digits.
Article translated by Jack Wu
