ARTICLE
WiMAX and LTE Semiconductor Opportunities
By Robert Syputa, Senior Analyst
Contact the author at robert@maravedis-bwa.com
WiMAX and Long-Term Evolution (LTE), also known as Next-Generation Mobile Networks (NGMN), provide opportunities for participation of fabless design and fabrication companies as well as established integrated-semiconductor companies. The field promises lower barriers to Intellectual Property Rights (IPR) and new evolutionary paths, where innovation and combinations of features can help forge competitive advantage, particularly when compared with 3G. However, momentum has made it more difficult for new entrants (who do not have leverage in their respective markets) to gain a foothold.
With the great opportunities that NGMN provides, there is a need to consider how competition is already positioned, where the needs of the market are unmet and evolving, and how IPR is organized and licensed. This article cannot answer all these questions, but will provide an outline of where the WiMAX market is, where it is headed, who owns major sets of IPR, and how the licensing regime is starting to shape up.
Brief Background and Market Forecast
802.16 and WiMAX were developed upon the need to provide ubiquitous broadband coverage through the use of new wireless technologies. Because of the merits of the technology and its endorsement by Intel and other leading companies, a large number of mobile wireless leaders have joined the effort. The pace of development of WiMAX has accelerated, and now a broader assemblage of companies, including service providers, media, and Internet giants, has mounted efforts.
Forecast
WiMAX is a “front-loaded business model.” Intel and others are forecast to load WiMAX onto laptops, ultra-portable laptops, smart phones, and off-the-shelf subscriber units, which will cause a rapid ramp in demand for WiMAX chips, even though initial subscriber rates lag.
Wireless broadband is growing rapidly. WiMAX and LTE are expected to see rapid growth due to market seeding and a desirable service profile, which will capture market share in developed markets and attract new customers in emerging markets.
Standards
WiMAX is based primarily on 802.16, but also embraces additional wireless, networking, computing, and device standards. The WiMAX Forum recently issued guidance to members that WiMAX and 802.16 are not synonymous: WiMAX can include additional standards. This fits current trends in enabling chip technology and markets for multi-mode, multi-spectrum, and multi-simultaneous radio designs. WiMAX systems may include cognitive radio (802.22), 802.11, and perhaps LTE via integrated chipsets if market conditions are compelling.
Current WiMAX Semiconductor Suppliers
As a result of open standards, international participation in emerging economies, and a fair, reasonable, and non-discriminatory (FRAND) IPR development model, WiMAX has attracted a large number of chip suppliers, ranging from fabless design houses to large IC manufacturers.
Mass Market Chip Suppliers
Intel and Fujitsu currently supply emerging WiMAX developments, and TI and Broadcom are potential new entrants.
Fabless
Over 12 fabless design companies are producing WiMAX chips, including Beceem Communications, Sequans Communications, Runcom Technologies, Wavesat, Comsys, DesignArt, Altair Semiconductor, TeleCIS Wireless, and picoChip.
Captive
NextWave and Motorola are notable companies that are developing WiMAX chips primarily for internal consumption.
Technology Gestation and Trends
Mobile WiMAX is based on OFDM/OFDMA technology, which has been developed over several years and is used broadly in wired, wireless, and defense communications. OFDM is used in digital subscriber line (DSL), digital video broadcasting (DVB), Wi-Fi, and WiMAX, and will become the leading core technology for NGMN systems.
The diversity of technology in the WiMAX market can be seen in the following graph.
IPR Ownership, Policies, and Licensing Trends
WiMAX IPR ownership is highly diverse. For analysis of ownership, policies, and licensing trends, see Maravedis’ IPR reports.
Licensing Policies and Trends
Recent court and trade commission decisions have emphasized adherence to FRAND licensing agreements. This bodes well for WiMAX IPR licensing, as it is relatively free of disruptive contention and has a lower royalty rate structure than found in 3G.
Most leading WiMAX IPR holders do not plan aggressive enforcement action. For example, Paul Zeineddin of Samsung Electronics’ intellectual property counsel says Samsung would like to see reasonable licensing of IPR, including cross-licensing. Similarly, Intel, Nortel, and Motorola have supported low IPR contention to stimulate rapid and diverse industry development.
Opportunities for WiMAX and LTE Semiconductors
Already Too Crowded?
Companies currently supplying or contemplating WiMAX ICs question if there is room for market entry or continued development of new generations of WiMAX ICs. The answer is determined by a company’s strengths and its ability to either innovate beyond current levels or leverage market and manufacturing capabilities.
Time-to-Market
The deployment of wireless systems based on the new set of OFDM, MIMO-AAS, and smart distributed networking technologies has not yet begun to approach theoretical limits for spectrum reuse or network enhancements. Much innovation must take place along the current path to achieve the levels of performance expected of 4G (IMT-Advanced), as elucidated by the International Telecommunications Union (ITU) as per-user bandwidths of 1 Gbps fixed-nomadic and 100 Mbps mobile.
Maravedis anticipates WiMAX and LTE development to be somewhat analogous to that seen in the Wi-Fi market: growth in the number of chip vendors followed by a rapid decline in price and increased consolidation. However, WiMAX and LTE will be more diverse by nature, serving a far wider range of applications and spectra, and becoming a common platform for integration of networking across wireless systems.
This means that timing is critical to exploit stages of development, which now occur at a rapid pace. But careful planning and execution can lead to the successful exploitation of future opportunities.
Where Innovation Can Be Leveraged
A large portion of innovation will occur outside core wireless link capabilities. Innovation can also occur by integration of WiMAX with MCBCS (Multicast and Broadcast Service) and with its home entertainment, satellite, and support infrastructure networks. Economies of scale may take advantage of converged system architecture and IC integration that economically extends WiMAX into PAN and LWLAN environments and in MIMO-AAS, multi-user MIMO (MU-MIMO), collaborative MIMO (CO-MIMO), virtual base station aggregations, adaptive backhaul, self-forming and redundant multi-hop networks and subnets, or other aspects of SDWBBN development.
Manufacturers must be able to leverage process and design technologies or market influence; this scenario forces innovation that goes beyond core wireless chip implementation. Companies wishing to enter the field or enhance competitiveness must look to SDWBBN, developing complete product families that include integrated and well-supported development platforms.
Long-Term Wireless Trends and Convergence
3G, WiMAX, Wi-Fi, and LTE wireless are converging via multi-mode and multi-spectra ICs, RFICs, and antenna components and through the development of standards into multi-service “framework” platforms based on IP. The new model is to provide IP platforms that serve multiple-spectrum applications and a class of service rather than a specific application (e.g., mobile cellular or Wi-Fi in a specific spectrum). This approach encourages a more holistic consideration for IC development. ICs can be targeted for achieving low power primarily in high-volume spectrum applications, but competition in this space will be fierce. To differentiate, suppliers must leverage markets, processes, or design innovation.
Conclusion
Wireless is shifting to a new evolutionary platform of technologies that will continue to expand for several years—similar to IT/networking and converged communications, but with a greater focus on innovation during the “catalyst years” of development.
Source: Maravedis, WiMAXPro WiMAX/LTE 4G Intellectual Property Rights (IPR) Policy & Market Report, 2007.
Note: The full article appears in the FSA Forum Newsletter, http://www.fsa.org/publications/forum/index.asp.
For more information you can contact the author. robert@maravedis-bwa.com
