5G Wireless Infrastructure Semiconductor Analysis
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5G WIRELESS INFRASTRUCTURE SEMICONDUCTOR ANALYSIS SIA CONFIDENTIAL | 5G INFRASTRUCTURE ANALYSIS | 1 2 | 5G INFRASTRUCTURE ANALYSIS EXECUTIVE SUMMARY On behalf of SIA, a wireless market intelligence firm has analyzed all of the semiconductor function product families within the key elements of a 5G radio access network (RAN)- baseband unit (BBU) and active antenna unit (AAU)/remote radio unit (RRU) systems for 5G base stations along with the current domestic United States and foreign/international semiconductor suppliers. Our conclusion is that despite the United States maintaining overall market-share leadership in semiconductors with a 45% share of the global market, substitutes for U.S. components exist for nearly every semiconductor product family required to build a complete RAN infrastructure. In fact, our analysis indicates that of the more than fifty critical semiconductor elements necessary to design, manufacture, and sell a competitive 5G RAN network1, only 3 components could face supply constraints outside the United States in the event of an export restriction. For each of those three components, we have further concluded that alternatives are currently being deployed or under active development, especially within China by Huawei’s semiconductor design arm, HiSilicon. 8 | 5G INFRASTRUCTURE ANALYSIS | SIA CONFIDENTIAL OUR CONCLUSION FOR THE BASEBAND UNIT SYSTEM FOR A 5G BASE STATION IS THAT THE TWO KEY SEMICONDUCTOR PRODUCT FAMILIES THAT MAY PRESENT SUPPLY ISSUES OUTSIDE OF THE UNITED STATES ARE: • Commercial off-the-shelf Field Programmable Gate Arrays (FPGAs) • 10Gbps Ethernet PHY Transceivers/Switches This is based upon current available information regarding foreign/ international semiconductor suppliers, their current products, and performance metrics. For FPGAs, this bottleneck only applies to merchant FPGAs, as several BBU vendors including Huawei, Ericsson, and Nokia have long had internal capability to develop their own Application Specific Integrated Circuits (ASICs) that can replicate the minimum necessary requirements of an FPGA within a baseband unit. This is called the ASIC crossover, as vendors first deploy FPGAs in initial product release then deploy ASICs to reduce costs and improve power efficiency. These ASICs are designed in-house with fabrication outsourced to leading foundries, typically at the 14nm FinFET node ASICs for wireless infrastructure are developed on the same advanced process nodes as merchant chips. Deploying an ASIC as opposed to an FPGA does not degrade the overall functionality of the BBU. For merchant FPGAs, we note that state-of-the-art process nodes are at 7nm FinFET using Taiwan Semiconductor Manufacturing Company (TSMC) silicon foundry services. Current state of the art FPGAs available from Chinese domestic suppliers are at a 28nm process node. While it is logical that foreign FPGA suppliers have access to all of the process nodes at TSMC, Chinese suppliers will likely attempt to develop and scale FPGA designs to be on par with the U.S.-based suppliers. 1 For the purposes of this report we identified only semiconductor components deemed “critical” to aspects of a 5G RAN network. Critical is defined as essential for the design, manufacturing, and sale of 5G RAN equipment and possessing technical performance parameters unique to 5G networks. 5G INFRASTRUCTURE ANALYSIS | 4 EXECUTIVE SUMMARY For Gigabit Ethernet PHY transceivers and switches, we note the availability of 1Gbps Ethernet PHY transceiver and switch solutions from foreign/international semiconductor suppliers but no availability for 10Gbps Ethernet PHY transceiver and switch solutions outside the U.S. Within the 5G base station systems, the 10GE standard is predominantly used for optical/electrical transport functions. We understand that China-based suppliers, as identified in this report, are rapidly closing the gap between their current capability of 1Gbps to 10Gbps, and we project the gap can be closed in the next eighteen months. We are convinced time is the only issue for development of non-U.S.-based designs and availability for these two functional product families. Non-U.S. based chip designs will continue to have access to leading semiconductor electronic design automation (EDA) tools and the best semiconductor foundries, enabling rapid development and manufacturing. We are also convinced the amount of investment capital available in China is not an issue in preventing the evolution of the domestic semiconductor design industry. EXHIBIT 1: BBU FUNCTION PRODUCT FAMILY BOTTLENECK ANALYSIS Memory Fronthaul Optical L1-L3 Baseband SDRAM Clock Gen/Dist Power FPGA Switches Power Conversion Modules Processing Flash Std Logic Management EEPROM 10 GE PHY Bottleneck No Supply Issue OUR CONCLUSION FOR THE AAU/RRU SYSTEM FOR A 5G BASE STATION IS THAT THERE IS ONLY A SINGLE POTENTIAL SUPPLY CONSTRAINT, AGAIN BEING THE FPGA. ALTHOUGH, AS NOTED ABOVE, VENDORS SUCH AS HUAWEI HAVE ALREADY DEVELOPED ASIC SOLUTIONS THAT REPLACE THE FUNCTIONALITY OF THE FPGA. IN EFFECT, THIS POTENTIAL SUPPLY CONSTRAINT DOES NOT IMPACT HUAWEI, BUT COULD IMPACT OTHERS. 5 | 5G INFRASTRUCTURE ANALYSIS Similar to our outlook for research and development of such semiconductor products, it is simply time and money, neither of which is limited from the perspective of the domestic Chinese semiconductor design industry. We do not have a timeline as to how quickly and when such products will become available at the same performance as current U.S.-supplied solutions. For radio frequency (RF) functions such as power amplifiers, GaN has been identified as a key enabler for 5G radio systems due to the inherent wider bandwidth of operation as well as thermal performance. Additionally, we believe that the current evolution of 4G radio systems will also require GaN technology to achieve optimal performance. We believe that foreign/ international availability of GaN power amplifiers is sufficient and will not be a supply chain issue currently. We also note that while domestic Chinese supply of GaN may be performance limited, research and development will not be impacted by a lack of investment capital. EXHIBIT 2: AAU/RRU FUNCTION PRODUCT FAMILY BOTTLENECK ANALYSIS Fronthaul Optical Digital Front End Analog Clock Gen/Dist Power Isolator RF Filter Antenna FPGA Power Conversion Modules Beamforming Front End Std Logic Management Circulator Multiplexer Array CPRI/eCPRI A/D Converters RF SoC Power Amplifiers Fronthaul D/A Converters Low Noise Amplifiers Bottleneck RF Switches No Supply Issue 5G INFRASTRUCTURE ANALYSIS | 6 EXECUTIVE SUMMARY The potential for development of domestic Chinese semiconductor products is based upon access to semiconductor foundries for silicon, silicon germanium (SiGe), silicon on insular (SOI), gallium arsenide (GaAs), indium phosphide (InP), silicon carbide (SiC), and gallium nitride (GaN) semiconductor materials. WE NOTE THE FOLLOWING NON-U.S. BASED COMPOUND SEMICONDUCTOR FOUNDRIES AND THEIR LOCATIONS: • Advanced Wireless Semiconductor Company (Taiwan) • Global Communications Semiconductors (U.S., Taiwan) • OMMIC S.A. (France) • United Monolithic Semiconductors (France) • Wavetek Microelectronics Corporation (Taiwan) • WIN Semiconductor (Taiwan) • Sanan Integrated Circuits (China) WE ALSO NOTE THE FOLLOWING NON-U.S. BASED SiGe FOUNDRIES AND THEIR LOCATIONS: • Innovation for High Performance (Germany) • Tower Jazz (U.S., Japan, Israel) We believe that any potential supply chain bottlenecks to the specific semiconductor functional products highlighted in this analysis is merely a temporary “blip” in the supply chain. While there may be some level of disruption and performance degradation due to the unavailability of these specific products, we expect that these issues will be resolved. 7 | 5G INFRASTRUCTURE ANALYSIS WIDESPREAD FOREIGN AVAILABILITY FOR KEY AAU/RRU SEMICONDUCTOR COMPONENTS ADC FRONTHAUL OPTICAL MODULES FPGA RF SoC DIGITAL FRONT END Company A Company A Company A Company B Company B Company B Company C Company C Company D Company C Company D Company D Company E Company E Company E Company F Company F Company F Company G Company G Company H Company G Company H Company H Company I Company I Company I Company J Company J Company K Company K Company L Company M Company N Company O Company P Company Q ANALOG FRONT END Tx AMPLIFIER ANALOG FRONT END Rx LOW ANALOG FRONT END RF SWITCH [] Company A NOISE AMPLIFIER Company A Company B [] Company A Company B Company C Company B Company C Company D Company C Company D Company E Company D [] Company E Company F Company E Company G Company F [] Company F [] Company H [] Company G Company G Company I Company H Company H Company J [] Company I Company K Company J Company L Company K Company M Company L Company N Company M Company O Company N ISOLATOR/CIRCULATOR RF FILTER/MULTIPLEXER ANTENNA ARRAY Company A Company A Company A Company B Company B Company B Company C Company C Company C Company D Company D Company D Company E Company E [] Company E Company F Company F Company F Company G Company G Company G Company H Company H Company H Company I Company I Company I Company J Company J Company J Company K Company K Company K Company I Company I Company I Company L Company L Company L Company M Company M Company N 5G INFRASTRUCTURE ANALYSIS | 8 INTRODUCTION: WHAT IS 5G? The 5G standard, also known as IMT-2020, is the next evolution for the wireless industry. Every ten years, the wireless industry adopts a new, next generation standard for the network architecture as well as the radio waveform.