Is the mature process capacity of WiFi6 chips with soaring prices insufficient?

In recent years, the price of WiFi6 chips has risen, adding a lot of new attractions to the already bustling WiFi6 circuit. In March of this year, Broadcom informed customers that the delivery time of its communication chips has been extended to 50 weeks, and the delivery time of Broadcom has been extended to 52 weeks so far.
Taiwan, China Economic Daily reported that due to the good business opportunities of WiFi6, not only did Broadcom increase the price by 20%, but MediaTek has raised the WiFi6 chip price by about 20% to 30% in this quarter. Ruiyu reported to customers in October that the cost had risen to 10% – 15%, with a cumulative increase of at least 50% this year.
In addition, the supply chain also said that in the first quarter of 2022, the WiFi chip suppliers of MediaTek and Ruiyu will raise the price of WiFi chips again by about 10%.
Behind the soaring price
From the perspective of the iterations of WiFi, from 1997 to 2019, WiFi technology has experienced six generations of technological innovation. From 2018, the WiFi Alliance began to rename the WiFi standard, naming the WiFi in digital terms according to generations. The latest generation of WiFi technology standard 802.11ax is named WiFi6 according to the new naming method, while 802.11n and 802.11ac in the current market are named WiFi4 and WiFi5 respectively.
Vertical and horizontal arrangement by semiconductor industry
In fact, at the beginning of the design, WiFi 6 was designed to deal with high-density wireless access and high-capacity wireless services, such as outdoor large public places, high-density venues, indoor high-density wireless office, electronic classrooms and other scenarios.
In these scenarios, the number of client devices connected to WiFi networks has increased significantly. Although the current WiFi5 can also provide large bandwidth capacity, its throughput performance has encountered bottlenecks with the increasing density.
The main application scenarios of WiFi 6 require bandwidth and delay. Source: Huawei WiFi 6 and 5G technology and application white paper
Due to the differentiated characteristics of WiFi 6, WiFi 6 can provide higher data rate, larger network capacity, and solve the interference problem in high-density scenarios. WiFi 6 can theoretically bring 9.6 Gbps ultra-high bandwidth with 8 streams at 160 MHz.
Two major technologies – MU-MIMO (Multi-UserMultiple-Input, Multiple-Output) and OFDMA (Orthogonal Frequency Division Multiple Access) have been upgraded to provide multiple concurrent technologies in frequency space and physical space respectively, greatly improving network performance and transmission rate. The delay value is greatly reduced. The typical delay value of WiFi5 is 30ms, while WiFi6 is only 10ms, which is only 1/3 of WiFi5.
Because of these advantages, the market potential of WiFi 6 is huge.
Insufficient capacity of mature process
The key point of the price increase of WiFi 6 lies in the insufficient supply of production capacity while the demand of the downstream market increases.
From the perspective of the supply chain, WiFi 6 relies on mature process wafers. At present, the capacity of mature process is increasing continuously, and the major generation factories are expanding the production of mature process.
In April, TSMC approved a capital expenditure of 2.89 billion US dollars to increase the mature process capacity of Nanjing 28nm factory. The new capacity of the mature process will be opened in 2023.
Liandian is working with several customers to expand the capacity in Nanke Fab 12A P6 plant. The 28-nanometer process is adopted and the monthly capacity is 27500 pieces. The customers will pay the deposit in advance at the agreed price. The expanded capacity is expected to be put into production in the second quarter of 2023.
In fact, SMIC and GRID are also expanding mature manufacturing processes.
SMIC International announced on September 2 that it planned to build a 12-inch wafer foundry production line project with a capacity of 100000 chips/month, focusing on providing 28nm and above technology nodes.
Grid Core announced that the output of 12-90nm production lines in the United States, Singapore and Germany will increase by 13% in 2022, and the annual output of its 12-inch chip factory in Singapore will increase by 450000 pieces.
However, due to the cycle of increasing production and the time required to build factories, the time point for major chip foundries to add new mature process capacity is generally in 2023, and the supply speed of WiFi chips is far behind the market demand.
WiFi6 chip penetration is still accelerating
According to relevant data, since the launch of WiFi6 router products in 2020, WiFi6 products have accounted for more than 30% of the market share. According to agency survey data, the market share of WiFi6 is still rising. It is expected that the annual shipment of WiFi6 chips will exceed 1 billion in 2022, and 56% of new terminals will support WiFi6. It is expected that WiFi6 will become the mainstream standard by 2024.
In the field of chips, Qualcomm announced the Networking Pro 1210 platform suitable for enterprise-level applications and the WiFi 6 (802.11ax) network solution for wide market reference, which supports up to 8 spatial streams of WiFi 6 connections. Broadcom’s WiFi6 SoC BCM6710 is used for WLAN devices such as routers and residential gateways; Independent WiFi6 WLAN chip Botong WiFi6 SoC BCM43684, single chip supports 4 × 4 MU-MIMO 5G or 2.4G band (160Mhz bandwidth). Intel’s AnyWan SoC GRX350 and WAV654, GRX350 network processors can support WiFi 6 gateway or router devices for homes or small businesses. The QCS-AX2 developed by Ansemy is a highly integrated WiFi6 baseband chip.
Among the domestic chips, Huawei HiSilicon has developed a complete set of WiFi 6+solutions, including Lingxiao 650 WiFi, Lingxiao 650 PLC (Power Line Communication) and Lingxiao 650 CPU; ESP32-C6 is the first 32-bit RISC-V SoC integrated with WiFi 6+Bluetooth 5 (LE) by Lexin Technology; The BK7236 launched by Broadcom Integration is the first WiFi6 chip applied in the field of the Internet of Things.
Downstream market corresponding to WiFi 6
Mobile WiFi market
Subdivided into the smart phone WiFi market, after the release of WiFi 6 technology, many mobile phone manufacturers have announced that their new phones are equipped with WiFi 6 technology, such as Apple’s iPhone 11, iPhone SE, iPhone 12, Samsung Galaxy Note 10, Huawei P40, Nova 7 series, Glory 30 Pro, Xiaomi 10, Redmi K30 Pro, etc., all support WiFi 6.
The latest report of Strategy Analytics shows that in 2021, Qualcomm, Broadcom and MediaTek will become the world’s top three smart phone WiFi chip manufacturers, with a total market size of $4.3 billion. At present, mobile phone SoC processors that support WiFi6 include Qualcomm’s Snapdragon 888 and Snapdragon 865, Huawei HiSilicon’s Kirin 9000/9000E, Kirin 900 and Kirin 985, Apple’s A14, MediaTek’s Tianji 1000+, and Broadcom’s WiFi6 chip BCM4375.
Router market
From the perspective of router market, the market size of China’s WiFi 6 router/gateway chip will be about 300 million yuan in 2019 and 4.5 billion yuan in 2023; The market size of medium and high speed data card WiFi6 chips is about 530 million yuan in 2019, and is expected to exceed 10 billion yuan in 2023. The number of new terminals and shipments in the WiFi 6 market have surged this year. At the beginning of August, Glory WiFi 6 router Glory 3SE was officially launched for sale; Previously, the AX3000 of Xiaomi Redmi WiFi6 router has also been pre-sale, and the four WiFi6 routers under Asus will also be available soon.
With the launch of a series of cost-effective WiFi6 routers by major router brand manufacturers, the market price of WiFi6 routers has dropped to hundreds of yuan, and some can even be purchased at more than 200 yuan. Middle-low end routers have also further promoted the upgrading of the market.
Smart Home and Internet of Things
In terms of smart home and the Internet of Things, WiFi 6 has also opened another vast world. According to Gartner, by 2025, 72% of all Internet of Things connections will use WiFi and Bluetooth technology. IDC data shows that the global shipment of WiFi chips of the Internet of Things will reach 4.9 billion in 2022, while WiFi 6 chips will grow rapidly to more than 2 billion sets.
Amazon, Google, Alibaba, Xiaomi and other OEMs are all promoting the development of voice assistant and smart home functions. Google and Amazon have incorporated 802.15.4 into the aforementioned devices, and BLE mesh network is also applied to a variety of voice assistant devices in China to control the BLE mesh network lighting and other smart home functions.
VR ／ AR equipment
From the perspective of VR/AR devices, due to the inconvenient connection between the headset display device and the PC, wireless can improve its convenience. The latest WiFi 6/6E/7 and 5mm wave are the most suitable connection technology for the headset display device. Guo Mingqi, an analyst at Tianfeng International Securities, predicted that Meta, Apple and Sony are expected to launch new HMDs in the second half of 2022, the fourth quarter of 2022 and the second quarter of 2022 respectively. Both Meta and Apple’s new models support WiFi6E, while Sony’s PS 5 VR device supports WiFi6.
For ordinary users, how far is WiFi 6
Zhongguancun tested the connection between Intel WiFi6 AX201 wireless network card and WiFi6 and WiFi5 routers online. The measured uplink and downlink speeds are as follows:
Connect to the WiFi 6 router, with the downlink speed of 95.89 MB/s and the uplink speed of 100.21 MB/s; When connecting to the WiFi5 router, the downlink speed dropped to 73.16MB/s and the uplink speed dropped to 55.1MB/s. The overall difference is obvious. You can see that if you want to give full play to the advantages of WiFi 6, you need to replace the WiFi 6 router.
However, WiFi protocol can only be compatible downward, not upward. This means that if you have a WiFi6 router and a WiFi5 laptop, both parties can only connect through WiFi5 after negotiation. Therefore, if you want to fully experience the effect of WiFi6, only one router that supports WiFi6 cannot achieve the effect. You also need connected mobile phones, computers, tablets and other terminal devices to support WiFi6.
At present, the price span of WiFi 6 routers in the world is relatively large, and there are thousands of yuan files that have strong performance in extreme wireless transmission, such as the Xiaomi AX9000 with Qualcomm IPQ8072A and the Asus RT-AX82U with Bosom BCM675; There are also popular files with good anti-interference and anti-attenuation performance, such as the Redmi AX5 with Qualcomm IPQ6000 chip and the TP-LINK XDR1860 with MT7621DAT chip.
At present, WiFi 6 has not developed as popular as WiFi 5. Whether to replace WiFi 6 depends on your own device support, and the emergence of WiFi 6E is also a further update. So let the bullet fly for a while.