Apple and Qualcomm reached a settlement, Intel was eliminated, what is the difficulty in Huawei's must-win 5G baseband chip?

A week ago, Qualcomm and Apple, which had once "fought each other", joined hands again, which also announced the breakdown of Apple and Intel's cooperation in 5G chips.

Subsequently, Intel announced that it would withdraw from the 5G mobile phone modem business and would strengthen the research and development and expansion of 4G modems, but the company would still focus on the 5G network facilities business.

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According to Intel's official statement, the reason for making such a decision is that there is no considerable profit model. Whether it is profitable or not depends on two conditions: one is market demand, and the other is cost. In fact, Intel's withdrawal from 5G baseband chips has long been a sign. During the MWC2019 Barcelona exhibition in February this year, Intel revealed that its 5G cooperation with Unisoc had been terminated. Unisoc also released its first 5G multi-mode baseband chip on the same day, claiming that it was completely independently developed.

After Intel's withdrawal, there are only five players left in the global 5G baseband large-scale commercial use: Huawei HiSilicon and Unisoc in mainland China, Qualcomm in the United States, Samsung in South Korea, and MediaTek in Taiwan, China.

Looking around the world, even a strong company like Intel has had a difficult time developing 5G baseband chips. Due to various reasons, the development ended in "failure". Is the 5G baseband chip so difficult?

1. How difficult is it to develop a baseband chip?

What is a baseband chip? In order for a mobile phone to have the most basic functions of making calls and sending text messages, it needs to have a radio frequency part, a baseband part, power management, peripherals, and software. The radio frequency part and the baseband part are the core of the baseband chip. The radio frequency part is generally the part for sending and receiving information; the baseband part is generally the part for information processing. The baseband chip is used to synthesize the baseband signal to be transmitted, or to decode the received baseband signal.

To put it simply, the baseband chip is like a translator.

1. Why is baseband chip development so difficult?

If only a single network and a single spectrum are available, it is not difficult to make it usable. The problem is that usability is not the goal, availability is the key. It is not that simple to develop a baseband chip that can be officially commercialized. As a chip in a communication system, it must support all modes and all frequency bands, including the American band, the European band, and the Chinese band.

What is more troublesome is that in addition to so many network standards, there is also the compatibility of different communication equipment, including Ericsson, Huawei, ZTE, etc. Due to the uncertainty of the equipment used by operators when building networks, the safest way is to support full device compatibility.

In addition, although everyone develops according to the 3GPP standard protocol, many contents in the protocol are very vague. It is correct to understand it this way or that way. This results in great differences in details among devices made according to the 3GPP standard protocol, which is also the reason for compatibility issues among different manufacturers.

2. In the 5G era, the difficulty of developing 5G baseband chips has increased dramatically.

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First of all, from the perspective of standards, 5G research and development is disruptive compared to 4G. In the past, the chip research and development process was a top-down design based on standards. In the 5G era, there is no unified standard, and the 5G standard was not officially frozen until June 2018. During this period, for R&D, it is necessary to participate in the interpretation of 5G standards while carrying out 5G research and development.

Secondly, from a technical perspective, 5G terminals are more complex than 4G terminals. The computational complexity of 5G is nearly 10 times higher than that of 4G, and the storage capacity is 5 times higher. At the same time, it is also necessary to ensure compatibility with multiple communication modes and the networking needs of various operators.

At present, the modes that domestic 4G mobile phones need to support have reached 6 modes, and in the 5G era, the number will reach 7. The 4G/3G/2G networks of the three major operators, China Mobile, China Unicom, and China Telecom, include TD-LTE, FDD-LTE, TD-SCDMA, CDMA (EVDO, 2000), WCDMA, and GSM. It can be said that testing a chip requires running all operators around the world.

Third, from the perspective of power consumption, 5G power consumption is also a difficult problem that must be overcome. The processing power of 5G terminals is more than five times that of 4G, but with it comes the problem of how to balance power consumption and system heat dissipation. Therefore, when designing chips, on the one hand, power consumption is reduced by improving the process technology, and on the other hand, the battery capacity and charging capacity are increased in the chip solution, while matching the fast charging function.

The development of 5G chips is a complex process that requires not only long-term investment but also collaboration among engineers in different fields such as software, hardware, testing, and multimedia. This not only tests the strength of engineers and R&D teams, but also the competitiveness of chip manufacturers.

Faced with the high difficulty of baseband chip research and development, there are many failures.

3. The image of the loser is still vivid

More than a decade ago, many well-known chip companies sold smartphone CPUs, but eventually had to withdraw from the market. One of the important reasons was that they could not keep up with the trend in the development of baseband chips. Not to mention today's 5G, the previous 4G LTE baseband was an extremely difficult threshold.

These failed companies include: Texas Instruments, Marvell, Nvidia, Freescale, Broadcom, ADI... and so on. Even old communications companies like Nokia failed.

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Nokia originally wanted to develop its own 4G LTE baseband chips, but when Nokia sold its mobile phone division to Microsoft, baseband progress was very slow.

In 2010, Nokia Siemens sold this department to Japan's Renesas. After three years, the R&D team still had no progress, so in 2013, Japan's Renesas sold this department to the United States Broadcom.

After another year of research and development, there was still no progress, so Broadcom disbanded this department and completely abandoned the 4G baseband.

It can be seen from this that baseband research and development is not something that any semiconductor company can do, and continuous resource investment cannot guarantee results.

Because the research and development of 5G chips is unexpectedly difficult, this also determines the high threshold for entering the 5G competition. Only a small number of competitors with strong accumulated strength can participate in it, and the number of participants will only decrease. Now in this battle, with Intel's withdrawal, the global 5G commercial landscape has basically taken shape, with only Qualcomm, Samsung, MediaTek, Huawei, and Unisoc remaining.

2. Only five companies remain in the 5G chip competition landscape

1. Judging from the release time, Qualcomm and Samsung are ahead of their competitors.

In October 2017, Qualcomm officially launched the world's first 5G baseband chip X50. It is manufactured using a 28nm process and has a peak speed of 5Gbps, but does not support 4G/3G/2G and can only be used in an "external" form.

However, its upgraded version X55 was released in February 2019 and will be officially commercialized at the end of 2019. It adopts 7nm manufacturing process, supports millimeter wave and sub-6G frequency bands, and is compatible with 4G/3G/2G.

Subsequently, on August 15, 2018, Samsung also released the 5G baseband Exynos Modem 5100, using its own 10nm process.

MediaTek, which has been somewhat low-key in recent years, has also announced its own 5G baseband M70, which uses TSMC's 7nm process. MediaTek's executive said that M70 will be officially put into production in the first half of 2019 and is expected to be mass-produced and commercialized in the second half of the year.

On January 24, Huawei Consumer Business CEO Richard Yu officially released the 7nm-based 5G multi-mode terminal chip, Balong 5000, to the world, and demonstrated the first 5G commercial terminal based on the chip, Huawei 5G CPE Pro. It is not only the world's first single-chip multi-mode 5G baseband chip, but also supports a single-chip solution for 2G, 3G, 4G, and 5G, with lower energy consumption and stronger performance.

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Not long after, Unisoc released its first 5G baseband chip "Ivy 510" during the MWC 2019 World Communications Conference. The Ivy 510 baseband chip adopts TSMC's 12nm process technology, supports multiple 5G key technologies, and a single chip supports 2G/3G/4G/5G communication modes. It complies with the 3GPP R15 standard, supports Sub-6GHz frequency band, 100MHz bandwidth, and supports 5G SA independent networking and NSA non-independent networking. It is a highly integrated, high-performance, low-power 5G baseband chip.

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In terms of chip manufacturing process, Qualcomm, Huawei and MediaTek are 7nm; Samsung and Intel are 10nm.

Among the five chip design companies, Huawei HiSilicon mainly produces and sells chips for Huawei terminals, Samsung produces and sells chips for itself, and the actual suppliers are only Unisoc, Qualcomm and MediaTek. However, Ren Zhengfei said not long ago that Huawei's 5G baseband chips will be open to third parties including Apple, and the supplier structure may change.

2. The impact of Huawei’s open baseband

Before Apple and Qualcomm joined hands again, relevant reports pointed out that Apple contacted Samsung to discuss the purchase of baseband chips, but Samsung rejected Apple's order on the grounds of insufficient production capacity. From a market strategic perspective, Samsung's 5G baseband is likely not to be supplied to the outside world in the early stage of 5G development.

When Apple was facing 5G baseband chip supply problems, Huawei extended a helping hand and stated that its baseband chips could be sold to third parties including Apple.

The two opposite attitudes of Samsung and Huawei seem to indicate that Huawei has undergone a major change in its attitude towards its own intellectual property rights.

We know that Huawei's Kirin 980 and baseband chips have never been supplied to the outside world. As a communications company, many people don't know much about Huawei.

In fact, consumer electronics, mainly mobile phones, are only Huawei's sideline business, and Huawei's communications department is the foundation of the company. In the field of communications, Huawei is not only an equipment manufacturer, but also the only two core patent owners of 4G and 5G. Moreover, Huawei has a complete industrial chain from standards to products, and is also the most mature 5G commercial equipment and solution provider.

If Huawei's baseband chip production capacity reaches the demand and is open for sale, it will be a company that can compete with Qualcomm in the 5G terminal market and will also provide different choices for many mobile phone manufacturers.

3. Summary:

As mobile communication technology evolves to 5G, the integration of mobile phone baseband chips is getting higher and higher. There are only five major baseband platform manufacturers left, and Europe has basically been eliminated. Given Huawei and Samsung's need to produce and sell their own products, in fact, the only suppliers available are Unisoc, Qualcomm and MediaTek. Mobile phone baseband chips have become a seller's market, which is also the main reason why Apple has to throw itself into Qualcomm's arms again. The competition for 5G is related to the future of the information industry.