6G Early-Stage Investment Guide: Uncovering Telecom Hidden Champions

The 2024 World Mobile Communications Conference (MWC 2024) is attracting market attention. On February 26, ten countries, including the United States and the United Kingdom, issued a joint statement during MWC 2024 to support 6G principles. The AI-RAN Alliance was also established at an event during MWC 2024 on the same day. It aims to integrate artificial intelligence (AI) into cellular technology to further advance radio access network (RAN) technology and mobile networks to prepare enterprises to compete in 6G.

Qualcomm's vice president of technology and standards said that the industry cycle of 5G is about 10 years. The first part is the transition from 4G, and the latter part is the iteration to 6G. Currently, we are in the middle stage of 5G.

The iteration of communication technology often leads to an explosion of demand in the radio frequency chip market.

The radio frequency chip, simply put, is a device responsible for receiving and sending signals. It works in synergy with the baseband chip. The radio frequency chip receives the signal and passes it to the baseband chip. The baseband chips then convert the signals, and ultimately, countless radio signals become a message, voice note, or picture on your phone screen.

Specifically, radio frequency chips are mainly divided into four categories: RF Switch, filter, low noise amplifier (LNA), and power amplifier (PA).

In the radio frequency (RF) sector, companies such as Skyworks, Qorvo and Murata are recognized as key players. In terms of baseband chips, Qualcomm and MediaTek are leading providers. For filters, both Broadcom and Qualcomm are notable suppliers in the industry.

1) Skyworks Solutions: Specializes in manufacturing RF components, including power amplifiers, front-end modules, and RF subsystems used in wireless handsets, wireless infrastructure, and other consumer electronics.

Exhibit: Radio Frequency chips market share:

2) Qorvo: Provides RF solutions for mobile devices, infrastructure, and defense/aerospace applications. They produce components like power amplifiers, switches, and filters.

3) Broadcom: Known for its RF filters, especially the Bulk Acoustic Wave (BAW) filters used in high-end smartphones. Broadcom also supplies a wide range of semiconductor devices.

4) Qualcomm: A leading provider of baseband chips. They are known for their Snapdragon series of processors, which integrate baseband and RF functionalities. Meanwhile, MediaTek is a strong contender, especially in the mid-range and budget smartphone markets, providing competitive baseband solutions.

Exhibit: Baseband chips market share:

These companies compete in a complex ecosystem that includes direct competition, partnerships, and supply chain relationships. The specific market segments and technologies they focus on can vary, with some specializing in certain types of RF components or serving specific end markets.

6G is widely anticipated to become a new catalyst for the communications industry. As the successor to 5G, 6G is expected to offer even faster data speeds, lower latency, improved reliability, and greater connectivity.

Still, it is important to note that 6G technology is in the early stages of development and it will take some time before it is widely available. Besides, the profits of related companies are mainly affected by the mobile phone sales cycle. The past two years have been sluggish. Fortunately, the sales of mobile phones in the Android camp have recently recovered, and the sales of Apple Vision Pro devices will also bring about marginal improvements.

According to Bloomberg data, the revenues and EPS of most companies in 2024 are expected to gradually improve in 2024. Financial details are as follows:

Source: Counterpoint, Yole

By Moomoo US Calvin