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Unisoc Goes it Alone in 5G At MWC 2019

by Sravan Kundojjala | Feb 26, 2019

At MWC 2019, China-based private wireless fabless semiconductor company Unisoc has announced a new 5G platform MAKALU and a new IVY-branded multi-mode 5G baseband IVY510. The IVY510 joins an already competitive 5G baseband landscape. The company says MAKALU is named after MAKALU mountain, a fifth highest peak in the world. Unisoc is a merged entity of Spreadtrum and RDA Microelectronics. China-based Tsinghua Unigroup acquired both Spreadtrum and RDA in 2013. Tsinghua spent ~2.7 bn on these acquisitions at that time. In 2014, Intel invested $1.5 billion in Spreadtrum & RDA for 20 percent stake and at MWC 2018 Intel and Spreadtrum expanded their relationship to cover 5G modem development. But, Intel has announced that the company will no longer pursue this partnership in light of US-China trade war and the market outlook.

Unisoc’s IVY510 5G baseband, manufactured in 12 nm process technology by TSMC, supports multi-mode 5G (5G/4G/3G/2G), sub-6GHz (100MHz bandwidth) and NSA (non-stand-alone) and SA (stand-alone) modes. The IVY510 is a discrete multi-mode 5G chip and excludes support for mmWave. Unisoc is targeting handsets and non-handset applications with this chip.

Unisoc is currently the third largest baseband company in terms of volume, by Strategy Analytics estimates.

  • Unisoc is going through a very challenging phase currently. The company couldn't transition successfully from 3G to 4G. Despite some initial 4G success, Unisoc was left behind as its competitors Qualcomm and MediaTek raised the bar.
  • A sharp decline in 3G basebands shipments compounded the problem for the company. Even in 2G, Unisoc's shipments declined in recent quarters. Based on Strategy analytics estimates, Spreadtrum's baseband shipments declined year-on-year for the seventh consecutive quarter in Q3 2018.
  • Unisoc, a key player in sub-$50 / $100 smartphones, lost to affordable mid-rangers from Qualcomm and MediaTek.
  • Unisoc's primary 3G customer Samsung shifted 4G sourcing to Qualcomm and in-house primarily. This has affected Spreadtrum's 4G market position. The company has had some success in 4G feature phones, but in 4G smartphones the company's performance hasn't been impressive.
  • Unisoc's partnership with Intel didn't yield good results so far. Unisoc used Intel’s x86 cores in a couple of chips and used Intel’s fabs to manufacture those chips. Our estimates suggest that Unisoc didn’t generate much volume from this partnership.
  • Intel’s dream of expanding x86 technology in smartphones with the help of Unisoc’s strong presence in emerging markets didn’t realise. This can be attributed to Intel’s slow progress in advancing its x86-based smartphone CPU roadmap. In 2016, Intel itself had to retrench from the smartphone apps processor market as the company abandoned its internal integrated chip effort.
  • Intel originally thought Unisoc partnership would help it to proliferate its 5G modem technology in smartphones. But the latest development suggests Intel and Unisoc will compete on their own in 5G smartphones. Unisoc is hoping to get a piece of 5G pie in China in 2020.
  • From a business and market share perspective, we think this announcement doesn't affect Intel as Intel didn't benefit much from this relationship so far anyway. As we mentioned yesterday, Intel needs SoCs to expand beyond Apple.
  • Unisoc is still on LTE Cat.7 and didn't even announce its gigabit LTE chip so far. Unisoc's less than impressive 4G track record could affect its 5G transition. Spreadtrum is at least 3-4 years behind Qualcomm in baseband products and the gap continues to be widening.
  • Unisoc has the financial backing of Tsinghua Unigroup. It's been almost five years since Tsinghua acquired Spreadtrum. Unisoc is prioritising AI, 5G and IoT as future growth areas. Tsinghua claims to have big ambitions in wireless. Strategy Analytics will be closely monitoring Unisoc’s quarterly baseband market share and its progress in 5G basebands.
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