Recently, several friends asked me: “I bought two in a row and both were defective — what’s going on? You’ve been in the chip industry for years, do you know which ones are reliable and affordable?” Against the backdrop of today’s Sino-US tech rivalry, China’s chip R&D prowess has grown from weak to strong. In the high-end communications chip sector, you can see the trajectory of China catching up across the board. So here is a casual chat about the key players and camps in the domestic scene.
From the perspective of communication modem chip camps, let’s take a casual look at the portable WiFi landscape in China.
1. The Supreme Master: HiSilicon (Huawei)
Huawei is currently the world’s number one in 5G, and its strength in communications is unquestionably first-class. HiSilicon is Huawei’s chip division, and its communication modem chip performance is also top-tier. HiSilicon’s main R&D team is based in Shanghai, with over a decade of accumulated talent and first-rate management. Their chip design philosophy has always been: performance first, cost second. From catching up in the 3G era to leading in the 4G era, HiSilicon chips have never been sold externally, so the only brand under its banner is Huawei. Backed by Huawei’s formidable brand power, Huawei portable WiFi devices have always been number one in the domestic market. The downside: they are a bit pricey. If money is no concern, just buy Huawei. However, Huawei’s chip business has been hit by a series of US sanctions and crackdowns, and the road ahead is long and difficult. I sincerely hope Huawei can weather this tough period and find new breakthroughs and opportunities.
2. The International Powerhouse: Qualcomm
Qualcomm was the world number one in the 3G era. In the 4G era, its communication modem chips were overtaken by Huawei, and on many performance benchmarks, they can no longer match HiSilicon. Qualcomm’s main R&D teams are in Silicon Valley, where costs are high, and the US always demands high profits, so Qualcomm chips are not cheap. Developing portable WiFi devices with Qualcomm chips is relatively difficult. The main domestic R&D players include ZTE, TCL, Shanghai Sanqi, and Shanghai KuanYi. ZTE’s influence in the domestic consumer market is weak, its portable WiFi devices are not great value for money, and sales are modest. TCL (Alcatel) mainly targets the European and American markets and does not sell domestically. Other design houses, also due to cost-performance reasons, have no domestic brand clients using Qualcomm. So currently, Qualcomm-powered portable WiFi has very little influence in the market.
3. The Naturalized Master: ASR (Airoha)/Marvell
Although ASR was founded only five years ago, its founder carries substantial industry clout and attracted a large number of elite professionals to join the venture. Most importantly, in 2017, ASR acquired Marvell’s communication chip R&D team — a world-class player — dramatically boosting its strength and making it a newly risen top-tier contender. Marvell was founded by a Chinese-American couple and was one of the few Silicon Valley top-tier tech companies where Chinese-Americans could reach senior management. It trained many Chinese-American chip elites and also built a highly capable communication modem chip R&D team in Shanghai. Its products successfully entered Samsung’s supply chain and achieved large-scale shipments in Samsung phones (kudos for that!). Unfortunately, against the backdrop of Sino-US rivalry, Marvell’s communication chip business struggled and was forced to sell its R&D team and assets — perhaps the inevitable fate of this American company. Since Marvell chip-based portable WiFi is relatively difficult to develop, there are few R&D players, mainly Shanghai Nuoxing and Shanghai Deming. Among them, only Shanghai Nuoxing supports a handful of domestic brands (such as Oben). Marvell used to be relatively expensive. After ASR took over, it has continuously launched competitive new chips, growing ever stronger. So currently, ASR-powered portable WiFi is both good and cheap. Of course, reliable R&D alone is not enough — comprehensive quality management capability is also needed. For example, some small design houses produce poor-quality Marvell solutions that should be avoided. Overall, the ASR camp’s market share in portable MiFi is set to grow steadily — one to watch.
4. The Homegrown Contender: Spreadtrum
Spreadtrum is a veteran domestic communication chip developer, relatively focused on mobile phones. In the 2G era, relying on cost-effectiveness, it ultimately outlasted its rivals to become number one. The company’s DNA excels at marketing and price wars, though its R&D capability still lags behind the international top tier. In the 3G era, after hard work to catch up, its WCDMA communication modem chip once successfully entered Samsung’s supply chain. However, due to underwhelming performance and stability, it faltered badly in the Russian market and was soon abandoned in the 4G era. As a result, Spreadtrum never entered the 4G communication modem chip market, focusing instead on 4G phone SoC chips — ultimately suffering a major defeat in the 4G market, with revenue in continuous decline. Spreadtrum’s go-to-market approach uses a turnkey model, making development relatively easy. Its camp includes many brand companies and design houses — almost every player in the mid-to-low-end phone brand and solution space has ties to Spreadtrum. In the portable WiFi market, the last two years have seen cloud-SIM WiFi devices emerge using phone chipset solutions (imagine: the portable WiFi device is in Xinjiang, but the data SIM being used is in Shenzhen). Their biggest advantage is that you can use all three carriers’ networks without inserting a SIM card, so sales have been climbing steadily. The main brands are various white-label players using e-commerce and other fast-in, fast-out models. The two biggest hidden risks are: 1) it runs counter to real-name registration requirements, and there is no guarantee it won’t be banned at any time — if the Shenzhen cloud SIM pool servers get shut down, your device could turn into a brick. 2) Cloud SIM service providers have a track record of running off with the money (collecting 1–2 years of fees, then vanishing after a few months).
5. The Broken-Winged Master: ZXIC (ZTE Microelectronics)
ZXIC is ZTE’s chip subsidiary. ZTE has a good habit: whatever Huawei does, it tries to emulate. Huawei has been very successful in phone chips and 4G communication modem chips, so ZTE follows closely. But because ZTE’s phone business has never taken off, its investment in 4G communication modem chips has been modest. Its early chips were of poor quality, but after continuous improvements, they finally reached basic stability. However, the 2018 US sanctions on ZTE brought its phone business to a halt. ZTE was forced to stop 4G communication modem chip development. It is now relying on older products to generate some sales. ZXIC’s market approach is similar to Spreadtrum’s, using a turnkey model. The entire portable WiFi R&D solution is done by ZXIC, then manufactured and promoted by Shenzhen DH. The brands it supports include Xinyi and Xinxun, and the overall trend is declining.
6. The Heretic Master: Second-Hand Chips
What are second-hand chips? Guangdong has the world’s largest communications product recycling center. During the recycling and sorting process, some chips are re-balled and functionally tested, then re-enter the market. Their biggest advantage: cheap. Their biggest disadvantage: high defect rates. A 10–20% defect rate is common; 5% is a lucky day. They have been very popular in the low-end market in recent years. In price-sensitive phone markets like Mexico, India, Russia, and Africa, they have killed off many local king brands. In the domestic portable WiFi market, several companies have long used second-hand components, harvesting the low-end market with low prices. With ASR and other solutions bringing quality, affordable portable WiFi to market, the price gap has narrowed, and there are now no brands that purely use second-hand chips. However, a few Shenzhen brands still mix new and second-hand components. The friend who had two defective units in a row ran into the misfortune of second-hand components.
Summary:
In the domestic portable WiFi market, homegrown communication modem chips have thoroughly taken the mainstream, with multiple strong players covering all tiers and leaving no room for foreign competitors — a cause for celebration. Hopefully, they will go on to capture the global market as well. After all, in the mid-to-high-end chip space, there are still few areas where China can claim thorough mainstream dominance globally. One side note: China’s high-end chip R&D talent is concentrated in Shanghai, while white-label products are almost all clustered in Shenzhen.
| China Portable WiFi Landscape & Camps | ||||||
| Positioning | Chip Company | R&D Players | Domestic Brands | Trend | Pros | Cons |
| Supreme Master | HiSilicon | Huawei | Huawei | Leader | Top-tier performance | A bit pricey |
| Intl. Powerhouse | Qualcomm | ZTE/TCL/Sanqi/KuanYi | ZTE | Others | – | – |
| Naturalized Master | ASR/Marvell | ZTE/Nuoxing/Deming | Oben | Rising | Great perf. / cheap | Weak brand |
| Homegrown | Spreadtrum | Many | Shangzan, Xinxun | Uncertain | Cheap data | May be banned |
| Broken-Winged | ZXIC | Xinyi | Xinyi, Xinxun | Declining | Cheap | Slightly weaker perf. |
| Heretic | 2nd-Hand Chips | – | Some SZ brands | Declining | Very cheap | High return rate |
Translated from https://zhuanlan.zhihu.com/p/269140651