Guo Ming believes that Qualcomm will remain the exclusive supplier of Apple's 5 G baseband chips, because Apple failed to replace Qualcomm products with its own 5G baseband chips. Therefore, Qualcomm's income and profit from the second half of 2023 to the first half of 2024 may exceed market expectations.
However, Guo Ming also said that although the research and development of Apple's iPhone 5G baseband chip failed, it does not mean that Apple will give up research and development. Guo Ming believes that Apple will continue to develop 5G baseband chips, but by the time Apple's 5G data chips can replace Qualcomm's products, other new businesses in Qualcomm should have grown enough to offset the negative impact of losing Apple's orders.
Affected by this news, on June 28th, Qualcomm's share price rose by 6.7% in intraday trading, and still maintained a 3.48% increase at the close. In contrast, Apple's share price fell all the way after the opening and closed down 2.98%.
The course of Apple's self-developed 5G baseband chip
20 17 apple sued apple in the United States and Britain for abusing its monopoly position in the field of communication baseband chips, and refused to pay patent licensing fees to Qualcomm. Subsequently, the issue of patent licensing fees and patent disputes between Apple and Qualcomm broke out in an all-round way, and the two sides launched a lawsuit on a global scale, and their relations also deteriorated sharply. In this process, Apple reduced the use of Qualcomm baseband chips and switched to Intel baseband chips. At the same time, Apple is also actively developing its own baseband chip.
On April 6th, 20 19, Apple ended its patent litigation dispute with Qualcomm for several years. The two sides reached a settlement and all lawsuits were cancelled. At the same time, Apple paid Qualcomm a fee (at least $4.5 billion) and signed a new patent licensing agreement for six years. On the same day, Intel also announced that it would abandon the research and development of mobile phone baseband chips.
A few months later, in July of 20 19, Apple announced that it would acquire "most" of Intel's mobile phone baseband chip business for 10 billion dollars, which also means that Apple will adopt its own mobile phone baseband chip in the future. Prior to this, Intel had launched a 5G baseband chip, but it did not meet Apple's requirements, so it finally gave up and sold the mobile phone baseband business to Apple. Therefore, the outside world also believes that Apple's acquisition of Intel mobile phone baseband business will accelerate the launch of Apple's independent research and development of 5G baseband.
According to a document published by the United States International Trade Commission (ITC) in February 2020, Apple needs to buy Qualcomm's 5G baseband at least until 2024. It is mentioned in this document that Apple will use Snapdragon X55 baseband from June 1, 202 1 to May 3 1, and from June 1, 202 1 to May 3 1 and June/kloc-.
Subsequently, at the Qualcomm Investor's Day meeting on 200211,Qualcomm revealed that the business of supplying baseband chips to Apple will shrink in the next two years, and only about 20% of iPhone will use Qualcomm baseband in 2023. Qualcomm's statement also indicates that the 5G baseband independently developed by Apple will be the first to be adopted on the iPhone 14 series.
However, according to Guo's latest news, it seems that Apple's self-developed 5G baseband chip has not been successful, which makes it still the exclusive supplier of the new iPhone 5G baseband chip in the second half of 2023.
However, the news has not been further confirmed by Apple or Qualcomm.
Why is it so difficult to develop 5G baseband chips?
As early as the 2G/3G era, there were more than 10 suppliers of mobile phone baseband chips in the market, but every generation of technological upgrading was accompanied by a major reshuffle of suppliers.
With the advent of the 4G era, baseband chip manufacturers are facing more and more technical challenges, and the required patent reserves and R&D investment are also rising, and the threshold is getting higher and higher. If there is not enough shipping support, it will inevitably be unsustainable. So at this stage, Broadcom, TI, Marvell, Nvidia and other former mobile phone baseband chip manufacturers have all withdrawn from this market. And since then, few new players have entered this market (in recent years, only Apple and Ogilvy).
In the field of 5G baseband chips, with the launch of Intel, there are only five manufacturers: Qualcomm, MediaTek, Zhanrui, Huawei and Samsung. Among them, Samsung and Huawei's 5G baseband chips are mainly for personal use, and Huawei's self-developed chip manufacturing is also blocked by US sanctions. Therefore, there are only three suppliers of 5G baseband chips in the open market: Qualcomm, MediaTek and Zhanrui.
Similarly, because the requirements of 5G are very different from those of 3G and 4G standards, 5G should not only pursue higher data throughput, but also have greater network capacity and better quality of service (QoS), so the research and development of 5G baseband chips will be more complicated than 3G/4G. Because, in the past, the upgrade of mobile communication technology focused on bandwidth upgrade in order to provide users with faster mobile Internet services. However, in the 5G era, in order to meet the needs of various Internet of Things applications, mobile networks should not only support higher bandwidth, but also have larger network capacity, lower delay and more stable online connection.
For the design of baseband chip, this means that the processor itself must be extremely flexible and can support different 5G specifications such as eMMB, URLLC and mMTC, but at the same time it must have good performance, otherwise the data throughput will not reach the level required by 5G. Traditionally, these two requirements are contradictory. In order to solve this problem, the design architecture of baseband chips will be particularly critical, and the design architecture of different chip manufacturers will be different.
Taking the design complexity caused by multi-band compatibility as an example, the 5GNR spectrum developed by 3GPP has 29 bands. It is understood that these frequency bands not only include some LTE frequency bands, but also add some new frequency bands. Moreover, the frequency bands of different countries and regions are different, so the 5G baseband chip that chip manufacturers need to launch needs to be a universal chip, which can be used in all regions of the world, that is, it can support different frequency bands of different countries and regions, and multi-frequency compatibility increases the difficulty of chip design.
The increase in the number of supporting modes also increases the difficulty of design. The 5G baseband chip needs to be compatible with 2G/3G/4G networks at the same time. At present, domestic 4G mobile phones need to support 6 modes, and the 5G era will reach 7 modes. The 4G/3G/2G networks of 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 has to travel all over the world.
About "How difficult is the research and development of 5G baseband chips? Why are there no new players to join?" The person in charge of Zhanrui also said in an interview with Xinzhixun: "Because this requires hundreds of millions of dollars of investment in R&D, and we can't just start with 5G, we must make up the previous 2/3/4G. This is the future of hundreds of millions of dollars. In addition, we also need to spend high prices to test with operators around the world. We need our engineers to conduct field tests all over the world, and then constantly find and solve problems. We have people all over the world who do this field test all the year round. This accumulation really takes time. "
On the whole, the demand for data transmission capacity and transmission rate in the 5G era is very high, and backward compatibility is needed. In addition to the above-mentioned points, for example, whether the built-in DSP capability of 5G baseband chip is enough to support huge data computation, and the system heat dissipation problem involved when the chip meets sufficient operation efficiency. For the terminal of 5G, because the processing power is more than 5 times that of 4G, power consumption is also a problem that must be overcome. These are all design difficulties.