Qualcomm has completed a US$200 million acquisition of Sequans Communications' 4G IoT technology assets, marking a significant step in the company's diversification strategy. This move comes as Qualcomm's mobile business experiences a slowdown in growth, prompting the company to expand into other sectors in recent years. The acquisition is expected to substantially enhance Qualcomm's semiconductor product portfolio in the IoT space.
According to reports from CRN and FierceElectronics, Qualcomm aims to enhance its product portfolio's value through Sequans' Monarch chip. The company believes that Monarch offers superior performance, lower power consumption, and a smaller semiconductor size compared to its current product line.
Through this acquisition, Qualcomm seeks to strengthen its leading position in the global edge computing sector. Sequans, headquartered in France, specializes in providing 4G and 5G semiconductor products for the IoT market.
Market research firm Counterpoint Research suggests that while the acquisition may not significantly boost Qualcomm's market share in the non-automotive 4G IoT sector, it provides valuable technology. Qualcomm already holds a 23% market share in this sector, while Sequans' share is less than 1%. The main value of the acquisition lies in obtaining Sequans' Monarch chip technology.
Counterpoint's analysis noted that Qualcomm's MDM9206 and MDM9205 LPWA dual-mode chipsets, launched in 2018, are now considered outdated. Sequans' Monarch series outperforms Qualcomm's chips in terms of performance, power efficiency, and size. Thus, the analysis concludes that acquiring Sequans' technology is a strategic move that will help Qualcomm strengthen its position and address gaps in the LPWA market.
Qualcomm has been actively developing its IoT business for many years to achieve diversification. In the third quarter of fiscal year 2024, Qualcomm reported IoT revenues of US$1.4 billion, a slight decline from the previous year. In the third quarter of fiscal year 2024 earnings report, the company announced plans to unveil a new "industrial IoT dedicated product roadmap" in the coming months.
The agreement between Sequans and Qualcomm allows Sequans to retain full rights to continue using its technology commercially through a perpetual licensing agreement. This arrangement supports Sequans' ability to expand its 4G business and develop its 5G product portfolio.
Sequans CEO Georges Karam stated, "This validates our technological capabilities and ensures that our customers will continue to receive first-class support from Sequans for our 4G product lineup and cutting-edge 5G innovations."
Qualcomm is scheduled to hold its 2024 Investor Day event on November 19, where it will reveal the latest updates on its automotive and IoT diversification strategies.
Article translated by Jack Wu
