Wi-Fi chip supply shortage will not be significantly alleviated, and the release of 28nm new production capacity may become the key

According to Electronic Times, industry sources revealed that as demand continues to exceed supply, the tight supply of Wi-Fi core chips is not expected to ease significantly in 2022. Although suppliers are seeking more production capacity support from foundry partners, delivery times will continue to remain long.

MediaTek pointed out that the demand for Wi-Fi 6/6E core chips will grow significantly this year, thanks to the rapid integration of such chipsets in a variety of smart terminal devices besides routers, including laptops and customer office equipment. Realtek pointed out that by the end of 2022, the penetration rate of Wi-Fi 6/6E alone will soar to more than 50%, and the supply of its core chips will continue to be tight.

The report quoted the above sources as saying that most Wi-Fi 6/6E core chips are manufactured using the 28nm process. This is currently the most popular process node, but the supply is very limited. The shortage of Wi-Fi core chips is not expected to improve until more new 28nm production capacity comes online in 2023.

To this end, chip manufacturers are adopting 16nm or even 7nm processes for some high-end wireless core chips. However, since there are fewer foundries that can adopt these process nodes, it remains to be seen whether this technology upgrade will trigger a new round of chip shortages in the next few years.

Sources pointed out that Wi-Fi core chip suppliers such as MediaTek and Realtek have begun to cooperate more closely with foundry partners to gain a larger market share this year.

Compared with their competitors Qualcomm and Broadcom, MediaTek and Realtek have more advantages in winning production capacity support from foundries. This is because they have established long-term and close cooperative relationships with local foundry partners (including TSMC and UMC) and have accepted almost all pricing and other terms given by the latter.

The person stressed that although Taiwan's IC design houses are still catching up in the Wi-Fi 6/6E market, they have the opportunity to gain a higher market share and even seize the lead in the Wi-Fi 7 market, as long as they can make full use of the stable production capacity supply of foundry partners and try to provide technology at the same level as their international counterparts.