Industry Voices—Madden: A shake-up is coming to RRH semiconductors for LTE base stations

Cell tower
The LTE base station market continues to decline.

We’ve been tracking the sad decline of the LTE base station market and watching the semiconductor layoffs as Remote Radio Head (RRH) shipments drop this year. It’s no surprise; after all, we predicted this decline in 2014. The pattern matches the market decline that we saw for 3G and 2G cycles.

But here’s an insight about how the high-tech market works: When the market dips, it’s time to realign technology for the next cycle. Companies take risks when they are afraid that somebody else will snatch their market share. That’s what we are seeing now.

In the market for mobile infrastructure, the change to Massive MIMO is shaking up the established order. Comfortable players like Xilinx and Analog Devices are developing radically different and new semiconductor modules to capture a larger share of the future market, with higher levels of integration. As one simple example, we will see integration of data converters with the digital front end, to cut power consumption by 40%. The size of the radio will shrink by 70% or more, so that the OEMs can line up 64 radios together in a Massive MIMO array. It’s not your father’s base station anymore.

Also, new companies such as NanoSemi are taking advantage of the 5G disruption to enter the market. NanoSemi’s digital predistortion technique is much more efficient for wideband signals, especially for the 5G NR scenario that comes out between 200 MHz and 1 GHz of bandwidth.

At Mobile Experts, we have rebuilt our base station forecasting model from the ground up, to properly account for 16T16R, 32T32R, 64T64R, and 128T128R radio configurations. We’re at the point of the development cycle where everything is possible, and we see huge differences between the approaches of the top-tier OEMs.

For the 80-100 chip vendors that support the RRH, this year is a critical time. Each supplier must choose a direction for 2018-2019 products, and the uncertainty around 16T16R or 128T128R is paralyzing many of them. But there’s no time to wait: The wide bandwidth and high performance required in 5G will drive a new profit cycle in RF semiconductors, so chip vendors can’t miss the 2019-2020 wave of deployment.

The bottom line: A 5G radio head will look very different than LTE, and it’s not just Massive MIMO. The guts of the radio will be different also, and chip vendors will have to realign, merge, partner, or scramble in some way to stay on top of it.

Joe Madden is Principal Analyst at Mobile Experts LLC, a network of market and technology experts that analyze wireless markets. The team provides detailed research on Small Cell, Base Station, Carrier Wi-Fi, and IoT markets. Mr. Madden currently focuses on trends in 5G, IoT, and Enterprise markets for wireless infrastructure. Over 26 years in mobile communications, he accurately predicted the rise of Digital Predistortion, Remote Radio Heads, Small Cells, and the rise of a Mobile IT market. He validates his ideas with mobile and cable operators, as well as semiconductor suppliers, to find the match between business models and technology. Mr. Madden holds a physics degree from UCLA. Despite learning about economics at Stanford, he still obeys the laws of physics.