Steve Marcus | Reuters
Qualcomm announced new chips and software products on Tuesday, leading the company to expect wireless carriers to use cheaper carriers to build 5G networks than existing base stations of companies such as Ericsson and Huawei.
Qualcomm stock is up more than 43% this year as investors bet that its mobile chips, such as modems in Apple’s latest iPhones or processors in Samsung Galaxy phones, stand to benefit from a wave of spending on 5G.
But Qualcomm’s new radio access network chips go to the other side of the 5G connection – rather than being inside a handset, they are designed to go into base stations, which are loaded with antennas and chips, which the carrier uses over the Internet Place around cities to distribute. Cellular connection. According to Gartner’s estimate, RAN products are Qualcomm’s shot at getting a slice of the 5G network infrastructure market, which will exceed $ 8 billion this year.
Qualcomm will not actually create any base stations or infrastructure unlike companies like Huawei, Ericsson or Nokia. Instead, Qualcomm will sell its customers jointly with baseband, processing and RF chips software that allows them to build a “virtualized radio access” network in which base stations are built according to component specifications that allow them to work together Allows This may allow carriers to avoid lock-in from a single provider and to select base station components on a part-by-part basis. For example, a carrier may purchase radio from a provider and processor from Qualcomm.
Qualcomm’s RAN products support multiple bands of 5G, including faster millimeter wave connections that require more base stations and significantly lower range, and slower sub-6 millimeter flavors that over wide areas Can be broadcast.
Qualcomm President Cristiano Amon said, “5G Qualcomm enables a very large expansion of the addressable market, because 5G is going everywhere. It’s going automotive. It’s going everywhere. The networking aspect of 5G. With that change comes. ” “This is a very small incremental investment and it expands Qualcomm’s addressable market.”
Amon declined to identify companies planning to use Qualcomm’s RAN product, but said potential customers include existing base-station manufacturers as well as new companies that want to build cellular infrastructure Are, such as carriers that can build their own base stations. Qualcomm customers will get engineering samples in 2022.
Qualcomm has a history of selling chips for infrastructure back in the 90s, and started selling RAN products in 2018, but has yet to focus on “small cells,” or small base stations, for a small number of users. Is concentrated. Its new products can support “macro” base stations for public networks operated by carriers of millions of customers, Amon said.
Qualcomm’s products are compatible with O-RAN, a standard supported by Verizon, AT&T and T-Mobile. Sales of open standard base stations are expected to be $ 5 billion per year over the next five years, according to Dell’Roe Group, an industry researcher. Other companies, including Intel, Hewlett Packard Enterprise, Dell, and Cisco, are also offering base station parts that are compatible with O-RAN, Bloomberg reported last month.
Amon compared the rise of virtualized cellular networks to the growth of cloud computing in the last decade where companies realized that instead of buying and maintaining servers, they could buy computer processing as a commodity, from software to expensive server hardware. Can be separated.
“The telecom network has become an end-to-end system. Now with 5G, the one thing to be parallel is the transition to full virtualization of the network,” Amon said. “The network gets virtualized, so the radio access network runs on general-purpose computers.”
The announcement is also an American company investing substantially in the world of cellular infrastructure, which has become a hot international topic as countries like the United States and Australia terminate China’s Huawei Gear from the 5G network Is because officials say there are national security reasons.
White House economic adviser Larry Kudlow said in an interview in February that the US wanted to build 5G infrastructure “by American firms”. Officials in Congress have also introduced legislation that will fund O-RAN technology development.