US reportedly moves to restrict all Huawei access to US chip tech

The US Department of Commerce is said to be weighing new options to further limit Huawei’s access to the semiconductor technologies coming out the American companies.

The Wall Street Journal reported (behind paywall) that the DoC is working on changes to the remit of the “foreign direct product rule” to demand Huawei’s chip suppliers to apply for special licences if they use American technologies and American equipment. The rule currently “restricts foreign companies’ use of U.S. technology for military or national-security products”.

The measures have been mooted for a few weeks but have only just been put forward. President Trump is yet to review it, and not everyone in the administration is in favour of the changes, the newspaper reported. Semiconductor is one of America’s biggest export sectors to China.

The new rules could become a deterrent to all the semiconductor foundries for Huawei, including the Chinese companies, as they could be relying on technologies owned by or using equipment made by American companies. They could be forced to choose between holding on to Huawei as a customer or keeping their legitimate access to American technologies.

Taiwan Semiconductor Manufacturing Company Limited (TSMC), the world’s largest contract chip maker, is said to have generated more than 10% of its $35 billion annual income from fabrication for HiSilicon, Huawei’s fabless chip design subsidiary, according to estimate cited by WSJ.

Over the past year, despite the US restrictions on semiconductor export to Huawei, many businesses have managed to continue their business without a special licence, if they could prove the proportion of American-made value is lower than 25% of the total value. The DoC has proposed to lower the threshold to 10%.

If the new measures should enter into force, they would not only disperse the optimism for the telecoms industry following the “Phase-1” trade deal signed between the US and China, but also represent a new escalation of the Trump Administration’s efforts to further hamstring Huawei. Semiconductor fabrication has been an area that China has struggled to gain on their American competitors.

It would also be seen as part of the concerted government actions towards this purpose. The Defense Department has recently dropped its opposition to the government’s efforts to restrict American chip makers to supply Huawei through their overseas facilities.

The WSJ report comes days after the DoJ announced a set of superseding indictments, also days after the DoC granted 45 days extension to Huawei’s “Temporary General License”. At the time of writing, Huawei has not responded to Telecoms.com’s request for comment.

Intel drops $2 billion on AI chip maker Habana Labs

Having once more failed at mobile, US chip giant Intel is doubling down on the datacenter, where artificial intelligence is expected to be ever more prominent.

Spending two billion bucks on AI chip maker Habana Labs is a major statement of intent in this regard. The Israel-based company specialises in programmable deep learning accelerators for the datacenter. Intel already has a strong position in general purpose processors used in that environment, but is under pressure when it comes to AI from rivals such as Nvidia.

“This acquisition advances our AI strategy, which is to provide customers with solutions to fit every performance need – from the intelligent edge to the data center,” said Navin Shenoy, GM of the Data Platforms Group at Intel. “More specifically, Habana turbo-charges our AI offerings for the datacenter with a high-performance training processor family and a standards-based programming environment to address evolving AI workloads.

“We know that customers are looking for ease of programmability with purpose-built AI solutions, as well as superior, scalable performance on a wide variety of workloads and neural network topologies. That’s why we’re thrilled to have an AI team of Habana’s caliber with a proven track record of execution joining Intel. Our combined IP and expertise will deliver unmatched computing performance and efficiency for AI workloads in the data center.”

Habana will remain semi-autonomous with Chairman Avigdor Willenz (pictured) hanging around for a while. Intel says its AI-driven datacenter business is growing 20% annually and will bring in $3.5 billion this year. With datacenters becoming an evermore important component of telecoms networks, this looks like Intel’s best remaining hope of capitalising on an industry that has eluded it for so long.

Europe decides to punish Broadcom before its investigation is complete

The European Commission is in the process of investigating Broadcom for anticompetitive behaviour, but has imposed sanctions in advance of any conclusion.

Broadcom is considered to be dominant in the market for set-top box chips and some fixed line modems. The EC reckons it’s abusing that dominant position by persuading customers to go all-in on its products, thus unfairly restricting competition. The investigation was opened last June but the EC is so concerned about the effects of these practices that it has ordered Broadcom to stop them immediately.

“We have strong indications that Broadcom, the world’s leading supplier of chipsets used for TV set-top boxes and modems, is engaging in anticompetitive practices,” said EU Competition Commissioner Margrethe Vestager. “Broadcom’s behaviour is likely, in the absence of intervention, to create serious and irreversible harm to competition. We cannot let this happen, or else European customers and consumers would face higher prices and less choice and innovation. We therefore ordered Broadcom to immediately stop its conduct.”

The key word in that quote is ‘likely’. Vestager seems to be saying that mere suspicion is now reason enough for the EC to act against companies pre-emptively, in anticipation of the outcome of its investigation. What if the investigation concludes in favour of Broadcom? This seems to be a dangerous erosion of due process and an ominous precedent for any company that does business in Europe.

Broadcom now has 30 days to do the following or else:

  • Unilaterally cease to apply the anticompetitive provisions identified by the Commission and to inform its customers that it will no longer apply such provisions; and
  • Refrain from agreeing the same provisions or provisions having an equivalent object or effect in other agreements with these customers, and refrain from implementing punishing or retaliatory practices having an equivalent object or effect.

Those restrictions apply until the EC get around to concluding its investigation or three years, whichever is sooner. It’s common practice for big companies to chuck lawyers at these kinds of investigations in order to drag them out, so you can see where the EC is coming from with this kind of pre-emptive action. But due process exists for a reason and the EC seems to be saying it’s better that a few innocent companies may be hurt than any guilty ones go unpunished.

Qualcomm claims 30 5G fixed wireless access deal wins

5G has opened up a whole new channel for Qualcomm to flog its modems through and it seems to have got off to a decent start.

The company has announced that its X55 5G Modem-RF System has been bought by over 30 global OEMs to form part of fixed wireless access customer premises gear that they’ll start flogging sometime next year. The bandwidth promised by 5G makes fireless a viable alternative to fixed broadband in certain scenarios and it looks like that market is picking up.

Here are 34 companies that were prepared to admit they were making Qualcomm-powered FWA kit: Arcadyan, Askey, AVM, Casa Systems, Compal, Cradlepoint, Fibocom, FIH, Franklin, Gemtek, Gongjin, Gosuncn, Inseego, LG, Linksys, MeiG, Netgear, Nokia, Oppo, Panasonic, Quanta, Quectel, Sagemcom, Samsung, Sharp Corporation, Sercomm, Sierra Wireless, Sunsea, Technicolor, Telit, Wewins, Wingtech, WNC, and ZTE.

“The widespread adoption of our modem-to-antenna solution translates into enhanced fixed broadband services and additional opportunities to utilize 5G network infrastructure for broad coverage in urban, suburban and rural environments,” said Qualcomm President Cristiano Amon. “Due to the development ease of our integrated system and industry movement toward self-installed, plug-and-play CPE devices, we expect OEMs will be able to support fixed broadband deployments beginning in 2020.”

In related new Qualcomm has also unveiled a new reference design that integrates 5G and Wi-Fi 6 for all your FWA home gateway needs, claiming it’s a plug-and-play alternative to boring old fixed line broadband. They’ve whacked the X55 modem and the Networking Pro 1200 platform into one handy package that Qualcomm will be hoping companies such those listed above will build into their gear.

“This new home gateway reference design can help ISPs and broadband carriers deliver triple-play home internet to customers, including fiber-like high-speed data, television and phone services, all with support for hundreds of devices, in a high-performance single-box solution powered by the latest connectivity offerings from Qualcomm Technologies,” said Nick Kucharewski, GM of the Wireless Infrastructure and Networking Business unit at Qualcomm.

Qualcomm is showing all this shiny new FWA gear off at the Broadband World Forum event currently underway in Amsterdam. FWA has been a theme of the show for a little while, but this is probably the first year is has the potential to steal the limelight from fibre and that sort of thing. Having said that it’s still hard to see why anyone would opt for that when proper fibre was available.

Skyworks financials reveal the cost of working with Huawei

Mobile chip maker Skyworks solutions has released its financial results for the third quarter of 2019, with a $127 million hole in comparison to the same period of 2018.

In most circumstances, a 16% drop in revenues for a three-month period would send the office into meltdown. Executives and shareholders will of course not be thrilled, but this downturn was expected by pretty much everyone involved; this is the cost of doing business with Huawei.

As you can see from the table below, there are certainly some numbers which will cause a persistent twitch.

Q3 2019 Q2 2018
Net revenue $767 million $894.3 million
Gross profit $312.5 million $442.7 million
Net income $144.1 million $286.5 million
Earnings per share (Basic) $0.83 $1.58

What is worth noting is that there are factors contributing to this downturn outside the Huawei saga. Semiconductor sales across the world are in a trough currently, the Semiconductor Industry Association (SIA) unveiled quarterly figures earlier this week, with the global smartphone shipments impacting financials everywhere.

Perhaps due to a lack of innovation in the smartphone arena or consumers afraid of purchasing new devices with a new ‘G’ on the horizon, shipments have declined. History suggests this is cycler, though the depressed states of affairs can also be contributed to Huawei business.

Skyworks solutions is one of those businesses which is in a somewhat difficult position. There might a brief reprieve for those working with Huawei, though the damage has clearly been done.

In entering Huawei onto the Entity List, effectively banning any US company from working with the Chinese vendor, President Trump released a wave of collateral damage. Skyworks was not one of the worst effected, though as you can see there clearly is friendly fire from the White House.

During last years Annual Report, Skyworks told investors Huawei was one of three firms which accounted for more than 10% of annual revenues. With a third of generated revenues being attributed to three companies, this is not the healthiest position, but in the smartphone segment it is largely unavoidable; there aren’t than many manufacturers after all.

Interestingly enough, while the firm did beat market expectations, this does not seem to have diluted fears from investors.

The management team has greenlit a 16% increase of dividend payments, while there is hope it might be able to continue work with Huawei, but investors are seemingly voting with their feet. At the time of writing, share price declined by almost 7.4% in overnight trading.

This is not a firm which will cease to exist because of these negative events, however it is wounded right now. Huawei is a massive customer for the team and an account which was only getting more profitable as Huawei grew its global smartphone market share. This is not the beginning of the end, but it doesn’t make for the most comfortable reading.

Apple steps up in-house modem efforts – report

Its dispute with Qualcomm seems to have pushed Apple towards developing its own modem in-house so it no longer has to rely on external suppliers.

Apple has been making its own application processors for years thanks to the ARM IP licensing business model and the acquisition of PA Semi not long after the iPhone was launched. Making a competitive modem is a much trickier proposition, however, which is why Apple continued to pay Qualcomm for the job however deeply it resented doing so.

Following the collapse in relations between them it looked like Apple was going to turn to Intel for all its modem needs, but a report from Reuters would seem to indicate that’s not the long term plan for Apple, and that it would rather have full control over its modem destiny.

Apparently Apple has now shifted its modem silo from the supply chain unit to the hardware design one. Accordingly Johny Srouji, who heads up the hardware side of things at Apple, will now also have to deal with this future modem. This especially makes sense since Srouji, who worked at Intel for a while, was brought in in 2008 to head up the in-house SoC side of things.

The benefits of doing as much manufacturing in-house are clear, especially for products as integrated as Apple ones, but Qualcomm has a clear lead when it comes to modem design. What if the future Apple modem is an order of magnitude slower than Qualcomm – what kind of effect might that have on iPhone sales? We’ll probably find out in a few years.

Qualcomm launches a bunch of chips in China

Mobile chip giant Qualcomm used the first day of Mobile World Congress Shanghai 2018 to launch new chips for smartphones and watches.

Qualcomm has the market for third party smartphone SoCs sewn up at the premium end, but Chinese chip-maker Mediatek, among others, is giving it a run for its money in the middle and lower tiers. It’s presumably no coincidence, then, that Qualcomm chose this event to make its mass market chip announcements.

The Snapdragon 800 range is all about the premium tier, then we have 600s for the high tier and 400s for the mid tier. Qualcomm just announced the Snapdragon 632, 439 and 429, which will all be a bit better than their predecessors at things like performance, battery life, and that sort of thing.

“The introduction of Snapdragon 632, 439 and 429 builds off Qualcomm Technologies’ highest-selling mobile platforms and provides users with increased performance and power efficiency, superior graphics, AI capabilities and enhanced connectivity features,” said Kedar Kondap, VP of product management at Qualcomm. “We’re excited to offer these new platforms with enhanced features to our OEMs and consumers.”

The 632 SoC features a Kryo 250 CPU, an Adreno 506 GPU, the X9 LTE modem, and supports a 24MP camera. The 439 has an Adreno 505 GPU and the 429 has an Adreno 504 GPU. No branded CPU cores are detailed, which probably means they use off-the-shelf ARM cores. They support 21MP and 16MP cameras, respectively.

Qualcomm’s other announcement at the show was a new chip designed specifically for the kind of cheaper smart watch you might give to a child. The Snapdragon Wear 2500 Platform has features like extended battery life and low power location tracking so you can keep an eye on where your kids are. The platform also has an LTE modem and a special version of Android designed for kids.

“If you look at the targeted kid watch and tracker segment the growth in these designed-for-kids but highly capable devices, is very exciting, and customers are seeing wide spread global demand,” said Anthony Murray, GM of Voice, Music and Wearables at Qualcomm. “Qualcomm has helped to drive this fast expansion of 4G kid watches with its Snapdragon Wear 2100 platform and there are more than 10 devices commercially available today through retail and carriers,”

“With this next generation Snapdragon Wear 2500 platform, we are supporting new performance and features that customers will be able to use to create even more fun features and compelling use cases for these connected 4G kid watches and with our dedicated kid watch platform we aim to deliver a robust foundation that supports a rich and engaging experience for children.”

There is lots of talk about the whole platform and how great it is for this sort of thing. It supports limited camera, AI voice assistants and name-drops NXP NTC technology that can be handy for giving kids some limited digital wallet functionality. The marketing for these sorts of devices is understandably aimed at parents and talks about things like fitness tracking too. It’s not clear, however, how much traction there is for kid-oriented smart watches and for them to take off they would probably need to be pretty cheap.

The Qualcomm M&A plot thickens with increased NXP bid

Chip giant Qualcomm has upped its bid for NXP in a bid to placate some investors and maybe complicate Broadcom’s attempted hostile takeover.

Qualcomm’s bid for NXP back in October 2016 was accepted by the NXP board, so you’d think that would be that. But there were some grumbles from institutional investors at the time and the NXP share price has improved a further 20% or so since the bid was announced, so Qualcomm decided to up the bid from $110 to $127.50, which equates to around $6 billion.

A possible by-product of this move may be to complicate Broadcom’s hostile acquisition, which was originally based on the original NXP purchase price. Qualcomm’s board is clearly not keen on the Broadcom move and, with only China left to approve the move, presumably thinks it has an even stronger argument in favour of remaining independent with NXP on board.

“Qualcomm’s leading SoC capabilities and technology roadmap, coupled with NXP’s differentiated position in Automotive, Security and IoT, offers a compelling value proposition,” said Steve Mollenkopf, Qualcomm CEO. “With only one regulatory approval remaining, we are working hard to complete this transaction expeditiously. Our integration planning is on track and we expect to realize the full benefits of this transaction for our customers, employees and stockholders.”

“The acquisition of NXP will enable us to accelerate our growth strategy,” said Tom Horton, Presiding Director of the Qualcomm Board. “The Board unanimously believes this is an attractive acquisition at this price for Qualcomm stockholders based on NXP’s recent strong financial performance, the growth in key strategic areas such as Auto and IoT and our high confidence in management’s ability to execute upon the synergy opportunities.”

Paying more for NXP may put off Broadcom if it doesn’t think Qualcomm is getting good value for money, but that in turn may antagonise existing Qualcomm shareholders, especially the ones tempted by Broadcom’s offer. The balancing act continues and Broadcom’s next move may be critical.

Qualcomm claims world’s first 2 Gbps LTE modem

Among the final flurry of announcements to come from Qualcomm’s big 5G day was, curiously enough, a new 4G modem.

The Snapdragon X24 modem claims to be the first to offer 2 gigabits per second throughput, the first to be made on the 7nm manufacturing process (which enable it to do more with less silicon), and the first to support 7x carrier aggregation. The latter allows seven chunks of spectrum to be used in parallel to allow the aforementioned throughput awesomeness.

“As the world’s first announced Gigabit LTE modem to achieve speeds of up to 2 Gbps, the Snapdragon X24 LTE modem sets a major mobile industry milestone, designed to provide enhanced mobile broadband and deliver an extremely important gigabit coverage layer for commercial 5G networks and mobile devices that are expected to start launching in 2019,” said Serge Willenegger, GM of 4G/5G and Industrial IOT at Qualcomm.

“Further expanding on the use of 4×4 and LAA capability, the Snapdragon X24 packs a powerful array of the most advanced 4G LTE technologies commercially available, helping mobile operators to fully mobilize their spectrum assets and maximize the capacity of their Gigabit LTE networks, and mobile device makers to offer consumers a tangible glimpse of our 5G future.”

This was introduced to the assembled commentators in San Diego last week, but we were required to stay silent on the matter until today for some reason. It serves as a timely reminder of several home truths amid the 5G fervor, as Willeneger alluded to. LTE isn’t going anywhere; it will be the primary vector for mobile data for several years yet and even when 5G starts to ramp up LTE will be the fallback technology on the frequent occasions when you’re out of range of a 5G cell, or a leaf gets in the way of the signal or whatever.

It also serves as a reminder that increased speeds are the least exciting part of 5G. 4G is already able to exceed the speeds most people will ever need on mobile devices, and things like capacity, low-latency, massive IoT, etc are more useful innovations. If the X24 performs as advertised it’s likely to be appearing in mobile devices for many years to come.

Apart from the X24, Qualcomm had kept three more announcements up its sleeve until today. One is a new software development kit designed to support the commercialisation of IoT. And then there’s the introduction of Qualcomm Wireless Edge Services, which again is aimed at the IoT ecosystem but this time with the aim of helping with the provision, connection and management of IoT devices. The last PR just reflected on the 5G day and summarised all the good things Qualcomm is doing in the wide, wide world of 5G.

As we’ve written previously this whole exercise seems to have been designed to not just demonstrate Qualcomm’s 5G modem leadership, but also to show what a good job it’s doing of diversifying into the other opportunities expected to be created by 5G, such as IoT, VR and connected cars. It’s especially important for Qualcomm’s current senior management that its investors see this as evidence of how their interests would be best served by keeping the company free from the clutches of Broadcom.

Arm launches dedicated chip designs for machine learning

UK mobile chip design giant Arm has created specialised chip designs specifically for machine learning and object detection.

Arm, which at some stage in the past few months seems to have decided its name is no longer an abbreviation of Advanced RISC Machines and is instead a type of limb, is best known for providing the designs for mobile chips such as applications and baseband processors. As the tech world gets increasingly keen on artificial intelligence and mobile edge computing, it makes sense for Arm to get involved at a silicon level.

This has taken the form of Project Trillium, which is described as ‘a suite of Arm IP including new highly scalable processors that will deliver enhanced machine learning (ML) and neural network (NN) functionality.’ The point of it seems to be to equip mobile devices with a degree of autonomous (as opposed to cloud-based) machine learning capability that they currently lack.

“The rapid acceleration of artificial intelligence into edge devices is placing increased requirements for innovation to address compute while maintaining a power efficient footprint,” said Rene Haas, President of the IP Products Group at Arm. “To meet this demand, Arm is announcing its new ML platform, Project Trillium. New devices will require the high-performance ML and AI capabilities these new processors deliver.”

The main chip design is the ML one, which puts a premium on scalability – presumably meaning more chips equals more ML power. On top of that Arm has launched a distinct design for object detection, which covers things like facial recognition and the detection of other objects via the device’s camera. The two apparently perform even better in combination and better when you throw special Arm neural network software.

Jem Davies, Arm’s GM of ML, has blogged on the launch and unsurprisingly thinks ML is the biggest thing since sliced bread. “In my opinion, the growth of machine learning represents the biggest inflection point in computing for more than a generation,” he blogged. “It will have a massive effect on just about every segment I can think of. People ask me which segments will be affected by ML, and I respond that I can’t think of one that won’t be.”

As a scuba diver Davies chose a diving illustration to show how cool life could be when everything has ML chips embedded in it. You could have a heads-up-display in your mask that provides real-time augmented reality information and even automated action, such as defensive counter-measures if a shark should suddenly turn up unannounced.

Arm ML OD AR

AI and the various other bits of computer cleverness that are generally associated with it, are very much in vogue in the mobile space these days. We’ve been broken in gently by the cloud-driven smart assistants like Siri, but enabling much of that processing to be done locally offers clear advantages. On the back of Project Trillium expect chip vendors, and consequently devices vendors, to be offering novel AI features before long.