Samsung launches a new 5G modem.

Korean electronics giant Samsung had revamped its Exynos 5G modem and processor range with a couple of new ones manufactured on the 7nm EUV process.

The Exynos Modem 5123 and Exynos 990 processor are made using a 7 nanometer process technology, which is about as advanced as silicon tech gets these days and uses extreme ultra-violet is some clever way to deal with the physical challenges of operating at such tiny sizes. To the layman this means you can cram more transistors into a smaller space and thus make the chip perform better.

“Milestones in technological advancements are imminent all around us,” said Inyup Kang, President of the System LSI Business at Samsung Electronics. “Mobile 5G technology is opening new avenues for communication and connection, while AI is poised to become an everyday tool for people worldwide. Samsung’s Exynos 990 and Exynos Modem 5123 are perfectly adapted for high-volume 5G and AI applications, and are designed to help the world’s most ambitious enterprises, large and small, achieve their goals of bringing new capabilities to their markets.”

Samsung has plenty more detailed technical claims to make about the new chips but you get the gist. In other news Samsung is seeking to promote its new ‘experience space’ in Kings Cross by getting people to send in their selfies, which it then beams into space and displays on a Galaxy S10 smartphone that is somehow dangling in orbit. Here’s a video about it.

 

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.

Micron earnings devastated by US/China conflict

Micron Technologies unveiled fourth quarter and full-year financials for 2019, with the on-going tension between the US and China shattering the spreadsheets with distressing effect.

The company, which is a US producer of advanced semiconductor products, is one of the unfortunate victims of the US/China trade war. Like many other technology companies who are a supplier to Huawei, the on-going saga is having a catastrophic impact on financials. Unless there is a resolution on the horizon, Micron could look like a very different business in the very near future.

“We have applied for licenses with the Department of Commerce that would allow us to ship additional products, but there have been no decisions on licenses to date,” said CEO Sanjay Mehrotra during the earnings call.

“We see ongoing uncertainty surrounding US China trade negotiations. If the Entity List restrictions against Huawei continue and we are unable to get licenses, we could see a worsening decline in our sales to Huawei over the coming quarters.”

A word of warning for those who do not like are of a delicate disposition, the numbers being quoted below are not pretty.

Total revenues for the final quarter of 2019 stood at $4.87 billion. This is a slight increase quarter-on-quarter, but down roughly 43% compared to the $8.44 billion brought in for Q4 2018. Net income came to $561 billion for the three-month period, compared to $4.33 billion in the same period of 2018.

For the full-year, revenues stood at $23.406 billion compared to $30.391 billion across 2018, while net income dropped to $6.313 down from $14.135 billion.

President Donald Trump might well be pursuing national security, assuming you believe the statements, though that will come as little comfort for any of Micron’s employees, investors or suppliers.

Mehrotra has attempted to put as positive a spin as possible on these results, but it is a very difficult sell. The markets are looking positive for the business if you ignore the omission of Huawei as a customer, but it is very difficult to avoid the fact the company will make less money if it is not allowed to do business with the Chinese firm.

What is worth noting is that the business is slightly prepared for this nightmare scenario. The team have put in the work to prepare the organization, and as such, Micron actually delivered beyond analyst expectations for the quarter. That said, with share price declining 9.5% since the earnings call, it is clearly not a favourable position.

And Micron is not alone in this sticky position.

Skyworks Solutions, a supplier of semiconductors to Huawei, reported revenues of $767 million during the latest financial results, compared to $894.3 million in the previous year. The decision to ban work with Huawei only came a few weeks prior to this earnings call, and we suspect the financial hole will be substantially bigger come the next time Skyworks Solutions addresses investors.

Finisar is another US firm which saw revenues decrease to $285 million from $317.3 million year-on-year owing to challenging macro-economic environment. Qorvo is one firm which has seemingly survived the first waves of conflict, though it is forecast to have an impact soon enough.

“Ultimately, we were able to begin shipments of certain products [To Huawei] late in the quarter and we have applied for a license to expand the products we can sell,” Qorvo CEO Robert Bruggeworth said during the earnings call in August.

“We will continue to support them consistent with all applicable legal requirements. Finally, as our June quarter and September guidance demonstrate, we are effectively navigating a challenging environment and our products and technology continue to support solid sustainable results.”

Qorvo is forecasting revenues of $745 million to $765 million during the three-month period we are currently in. This would compare to $884.4 million which was brought in for the same quarter of 2018, prior to the Huawei misery.

And while these companies are applying for licences to work with Huawei while simultaneously praying for an end to the conflict, the chaos might continue well into the future.

Huawei founder Ren Zhengfei has recently said Huawei has begun the production of 5G base stations which do not contain any US component.

“We carried out the testing in August and September, and from October on we will start scale production,” Ren said.

This is something which should be viewed as worst-case scenario for everyone involved from the US side of the conflict. If you are of a sceptical nature and believe the tension has been heightened by Trump as a means to demonstrate US power to gain an edge in trade talks, Huawei surviving is a bad outcome. Another bad outcome is Huawei surviving and then restructuring its supply chain to removal any US suppliers.

Ren has initially said it would start production of base stations free of US components immediately, targeting 5,000 a month. Huawei is currently targeting the production of 600,000 base stations this year, scaling up to 1.5 million in 2020, though it is unknown how many of these will be with or without US components.

If Huawei can operate without any US suppliers in the supply chain, then it becomes a much more stable company. It is also an outcome which would please the Chinese Government considering the ‘Made in China 2025’ plan. This strategy aims to move China away from being the world’s ‘factory’ and move to producing higher value products and services.

And finally, onto President Trump, this is a disastrous outcome. The White House perhaps implemented this aggression towards Huawei to make the company falter and demonstrate power. If Ren is to be believed, Huawei will have negotiated the turbulent times and come out the other side without the need for US suppliers. The quality of the supply chain alternatives remains to be seen however.

Prior to this chapter of the saga, US firms were making profits from Huawei’s success; this might not be the case anymore.

Samsung unveils its first 5G integrated chipset for smartphones

Samsung Electronics introduced Exynos 980, its first 5G integrated mobile chipset for the mainstream market. Mass production will start by the end of the year.

Samsung’s 5G devices have so far been using separate modem and APE solutions, including its own Exynos 9820 and Qualcomm’s Snapdragon 855 chipsets teamed up with the Exynos 5100 and Snapdragon X50 modems. The new 5G integrated chipset announced today is Samsung’s first. With an 8nm footprint, the chipset combines the 5G modem and APE processors using 8nm FinFET process.

“With the introduction of our 5G modem last year, Samsung has been driving in the 5G revolution and paved the way towards the next step in mobility,” said Ben Hur, VP of System LSI marketing at Samsung Electronics. “With the 5G-integrated Exynos 980, Samsung is pushing to make 5G more accessible to a wider range of users and continues to lead innovation in the mobile 5G market.”

The chipset’s key specifications include:

  • Modem: supports 5G NR Sub-6GHz with max 2.55Gbps downlink and 1.28Gbps uplink speeds. It is also backward compatible with LTE, 3G, and 2G.
  • CPU: one 2.2GHz Dual-core based on Cortex-A77, and one set of 1.8GHz Hexa-core based on Cortex-A55. It may be worth noting that Samsung’s high-end Exynos 9820 can go up to a max speed of 2.73 GHz.
  • Camera support: single-camera up to 108Mp, or dual-camera 20MP+20MP. Samsung also stresses the integrated AI capability to support photo taking.
  • Video support: 4K UHD 120fps encoding and decoding with HEVC(H.265), H.264, VP9

Samsung said in the announcement that the mass production of Exynos 980 is expected to start by the end of this year, indicating Samsung 5G smartphones and tablets based on this new chipset will hit the market in the first half of 2020, if not the first quarter.

One day earlier, Samsung announced Galaxy A90 5G, a mid-range 5G smartphone, based on Qualcomm’s Snapdragon 855 platform, which is aimed at taking 5G to the mainstream users. The new Exynos 980 is likely to power the next generation of mid-range devices.

The 5G momentum in South Korea, Samsung’s home market, has been going strong. After registering 1 million subscribers by the beginning of June, government data showed that by the end of July the total number of 5G subscribers, from all three operators combined, already topped 2 million.

Here is Exynos 980’s promotion video:

 

Opportunities and challenges as eSIM technology is primed for take-off

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Yuval Mayron, General Manager, IoT at Amdocs, takes a look at the business environment created by the mainstream adoption of eSIM technology.

When Apple declared in September that its handsets would have eSIM capabilities, the technology was still in its infancy. Widespread adoption was still someway off, but it’s integration into the iPhone X as part of a dual-SIM function was a clear indication of the significant role it would play in the next generation of mobile technology.

The eSIM incursion

Unlike its predecessor, eSIM is built into the mobile handset, part of a global specification from the GSMA that enables remote SIM provision for any device.

Although most smartphones do still have a physical SIM slot, eSIM is already taking hold. The latest models of the iPhone and Google Pixel have eSIM capabilities, for example.

However, it’s not just the smartphone market that will be bolstered by the arrival of eSIM. The technology is set to be a key growth driver for the Internet of Things (IoT). Consumer devices, which require always-on connectivity, such as wearables (e.g. Apple Watch or Fitbit), connected home devices (e.g. Amazon Echo), laptops and tablets, will all reap the rewards of eSIM and its ability to connect consumer and enterprise IoT devices.

eSIM will transform the mobile ecosystem, and widespread adoption of the technology will have significant ramifications for many of the industries stakeholders.

Consumers, the enterprise, CSPs and suppliers – the eSIM beneficiaries

According to the GSMA, eSIM is expected to create $8.96 billion in revenues by 2020. With this figure in mind, it’s understandable that stakeholders in the industry are jostling for a slice of the eSIM pie.

Amongst those to benefit most from the technology’s introduction are consumers and communication service providers (CSPs), but eSIM will also present opportunities for the enterprise and suppliers too.

Consumers

eSIM enables users to download multiple digital profiles (up to eight at any given time) from the cloud, directly onto their device; empowering subscribers to switch operators with unprecedented ease.

As eSIM enables subscribers to connect more devices, operators can offer multi-device packages and bespoke data plans. With eSIM, device bundling will become much easier, and consumers will be able to conveniently add new devices to their plans without having to enter a shop or wait for a physical SIM card to arrive in the post. Ultimately, consumers will benefit from reduced costs and enhanced customer experience through simplified device setup.

The enterprise

Businesses are set to profit from the convenience of eSIM too; adding new phones to a corporate mobile service and swapping devices between users with ease. The technology will also enable enterprises to offer personalised profiles and data plans for each user, which can be adjusted and optimised via eSIM remote management tools, depending on the individual needs of the employee.

Furthermore, any business that relies on IoT systems is likely to profit from the cost saving benefits of eSIM. Enterprises can remotely connect equipment to a mobile network using eSIM, which uses less space and is cheaper than traditional SIM technology. Consequently, mobile connectivity can be integrated into hardware where it was previously not feasible due to cost and space restrictions. This will be particularly useful to large-scale machine-to-machine deployments such as manufacturing and warehousing facilities, oil and gas, or power plants.

CSPs

The increase in multi-device packages, enabled by consumer and enterprise adoption of eSIM, should also present new revenue opportunities for mobile operators as customers scale-up their plans by adding new data-centric devices.

In fact, the opportunity for CSPs is tremendous. With the growing proliferation of smart devices across every consumer and business market, the demand for mobile, wireless connections will skyrocket. These opportunities will only be augmented by the arrival of 5G, which is yet to realise its full potential.

Manufacturers and suppliers

On the face of it, the arrival of the new eSIM standard should spell the end for the manufacturers and suppliers of SIM cards, with the physical SIM all but obsolete. However, eSIM, combined with the momentum behind connected devices, opens up a number of exciting and untapped markets.

Each new device and future innovation in the connected devices space is, in theory, primed for eSIM technology and ripe with opportunity for manufacturers and suppliers. It’s all about supply and demand, after all.

eSIM adoption – the business and technology challenges

Despite the rosy picture that eSIM presents, there remain a number of practical business and technology challenges which need to be addressed by CSPs before it can realise its full potential.

The new eSIM customer experience is complicated by the fact that each original equipment manufacturer (OEM) has its own proprietary processes and screens. Onboarding these, as well as BSS integration and modification, is convoluted, and new protocols, processes, integrations and certifications will be required.

There may also be challenges when troubleshooting eSIM-enabled devices. Call centre support agents are not currently able to analyse profile download issue for all eSIM-enabled devices from one screen and will therefore not be able to perform proactive corrective actions.

These issues could be further complicated by the need for integration with other ecosystem players, such as retailers, point of sale, channels and roaming, which will each require its own solution.

Overcoming the eSIM challenge

eSIM represents a seismic shift in the way the mobile ecosystem operates, so it’s only natural that there will be some teething problems before the technology is up and running smoothly.

For eSIM to succeed, operators need to develop a solution that enables a simple and intuitive customer experience, with seamless support for all functionalities and capabilities that we’ve come to expect from the latest generation of connected devices. This will only be possible if call centre and customer service agents have visibility of devices and control from a single screen.

The other issue is that of compatibility and integration. CSPs need a solution that will work in tandem with the full range of eSIM-enabled devices along with billing systems that work with all the relevant players and platforms in the ecosystem.

Achieving such capabilities is a complex undertaking, which will almost certainly require a specific enabler. This will likely be in the form of an eSIM cloud solution, which would allow integration to all device OEMs and services providers, enabling a one-time integration, and eliminating the need to integrate hundreds of times with all the different players.

This will result in a unified experience in eSIM lifecycle management, for every device type, every OEM, channel, and location, effectively and seamlessly managing settlement among all ecosystem stakeholders.

With a cloud solution in place, eSIM technology could finally be primed for take-off.

Qualcomm makes its Wi-Fi 6 move

Mobile chip giant Qualcomm wants a bigger piece of the wifi action and reckons the advent of the next generation of technology is a good opportunity to grab it.

At a recent event in San Francisco devoted entirely to Wi-Fi 6, Qualcomm launched a family of Wi-Fi 6 platforms branded the Networking Pro Series. There are four platforms, to be precise, named 1200, 800, 600, and 400, that are distinguished as follows:

qualcomm wifi 6 products

Qualcomm has been banging on about Wi-Fi 6 (or 802.11ax as it was known before the Wi-Fi Alliance belatedly saw sense on nomenclature), for years, so this move is no great surprise. The big improvement isn’t so much about data rates but the number of devices a given router can support – i.e. capacity, as well as a bunch of other less obvious enhancements.

“Wi-Fi 6 is a transformational reimagining of how Wi-Fi works, a leap forward arriving alongside 5G and designed to accommodate the massive surge of connected devices,” said Nick Kucharewski, GM of wireless infrastructure and networking at Qualcomm. “The Qualcomm Networking Pro Series platforms raise the bar for the management of the ever-growing number of connected devices, the variation and complexity of those devices’ data needs, and the quality of the overall connectivity experiences they deliver.”

“The transformative nature of Wi-Fi 6 will have a deep impact across all categories of connected devices and environments,” said Edgar Figueroa, CEO of the Wi-Fi Alliance. “We’re going to witness dynamic changes in Wi-Fi with the inclusion of advanced features in Wi-Fi 6 which will drive improved network capacity, better performance and increased speeds.”

As well as potentially helping it grab wifi router market share from the likes of Broadcom and Cisco, Qualcomm reckons its focus on Wi-Fi 6 can help it in other markets such as connected car and IoT. It could also do a lot to proliferate the mesh technology that Qualcomm has also been very keen to promote.

Huawei claims AI leadership with launch of Ascend 910 chip and MindSpore

Networking giant Huawei reckons the new Ascend 910 is the world’s most powerful AI processor.

The chip was launched alongside ‘an all-scenario AI computing framework’ called MindSpore at an event positioned as the realisation of the AI strategy announced in October of last year. “Everything is moving forward according to plan, from R&D to product launch,” said Huawei Rotating Chairman Eric Xu. “We promised a full-stack, all-scenario AI portfolio. And today we delivered, with the release of Ascend 910 and MindSpore. This also marks a new stage in Huawei’s AI strategy.”

Huawei chucked around a few datapoints involving things like Teraflops, to support its claim that the Ascend 910 kicks AI ass. It also consumes around 10% less power than Huawei had previously expected it to. “Ascend 910 performs much better than we expected,” said Xu. “Without a doubt, it has more computing power than any other AI processor in the world.”

MindSpore is not the omniscient, Skynet-like AI platform implied by the slightly creepy name, but an AI development platform. Among its priorities are flexibility, security and privacy protection and it’s designed to be used to develop AI stuff across both devices and the cloud.

For obvious reasons anything Huawei announces these days features liberal references to the importance of security and privacy. “MindSpore will go open source in the first quarter of 2020,” said Xu. “We want to drive broader AI adoption and help developers do what they do best.”

At the same event Xu reportedly addressed the impact of all the US aggro on its bottom line. Referring specifically to the consumer business unit Xu said he’s optimistic it won’t be as badly affected as previously feared, but that the impact of US sanctions could still be as much as $10 billion in revenue.

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.

The calm before the storm – semiconductor sales plummet in Q2

Data from the Semiconductor Industry Association (SIA) show semiconductor sales are hitting depressing levels, though history suggests this might be the fast before the feast.

The SIA statistics suggest worldwide sales of semiconductors reached $98.2 billion during the second quarter of 2019, a minor increase on Q1 (0.3%), but a massive 16.8% crash on the same period of 2018. Cumulatively, year-to-date shipments during the first half of 2019 were 14.5% lower than through to the same point in 2018.

“At the midpoint of 2019, the global semiconductor market remains in a period of decreased sales, with revenues through June lagging the mid-year totals from last year by nearly 15%,” said SIA President John Neuffer.

“Year-to-year sales were down across all major regional markets and semiconductor product categories. One silver lining was that sales during the second quarter of 2019 narrowly outpaced sales during the first quarter.”

Looking at the data, there is a sense of history repeating itself.

Semiconductor Sales

Although it is not necessarily the easiest of graphs to read, there are a few peaks and troughs which can loosely be attributed to significant events.

Starting with the troughs, each can be attributed to two or three different things. Firstly, macroeconomic events which would have impacted purchasing patterns and investor confidence, and secondly, the introduction of a new ‘G’, therefore a new refreshment cycle for devices.

For the two troughs which can be seen following ’01 and ’09, these could perhaps be attributed to the burst of the dot-com bubble and the 2008 global financial crisis. Following both of these incidents, not only did consumer spending decrease, leading to fewer device shipments, business confidence in mobile technologies would have been impacted. Naturally, purchases of semiconductors would have decreased dramatically.

Another factor to consider is the prospect of a new ‘G’ on the horizon. This evolution could explain the troughs on the graph, but also the surging spikes. If we are to suggest 2G devices achieved mass market penetration in ‘00/01, 3G in ‘04/05 and 4G in ‘11/12, the spikes in semiconductor purchases could be explained by device manufacturers preparing for flagship launches.

Looking at the troughs, these could be explained by consumers delaying the purchase of new devices in anticipation of next-generation launches.

Perhaps this explains the dip which the semiconductor industry is currently navigating at the moment. Smartphone shipments have been steadily declining year-on-year, while the consumer appetite for 4G devices seems to be weakening with the prospect of 5G on the horizon. Smartphone manufacturers and the telcos are hyping up this new ‘G’ so much perhaps we should have little surprise demand for 4G devices is flagging.

Looking at the big chip manufacturers, the misery has been well spread. At Samsung, the most recent quarterly earnings demonstrated 4% decline in revenues and a 53% crash in net profit. The sluggish semiconductor business, often the profit driver for the business, has been the scapegoat this year. At Broadcom, another significant supplier in the mobile space, revenues attached to the Semiconductor solutions declined 10% year-on-year. For Qualcomm, the CDMA Technologies unit saw revenues decline by 12.7% year-on-year, while the Technology Licensing business felt a decrease of 10.5%.

Although the semiconductor industry will not be happy with declining revenues, if history has taught us anything, a spike in purchasing is not far away. 5G networks have been launched and early adopters have their hands on devices right now. It might be a year or two before mass market penetration is achieved, but the preparation for flagship launches will take place in the short- to mid-term future. This means smartphone manufacturers spending a lot more on new, and potentially more expensive, components.

The semiconductor industry is heading through a tough period at the moment, but this appears to be nothing new; a cornucopia of cash might just be around the corner.