The Commoditisation of WiFi Chips (Again)

Not for the first time a major WiFi chip player has decided to exit the market because of commoditisation.

Back in 2003, Intersil, at that time No.1 in WiFi chips, pulled out of the market saying it was becoming commoditised and there were better returns to be had in high performance analogue.

However, there was another reason – Broadcom had launched 802.11g WIFi chips six months ahead of the ratification of the standard – a bold move which was to propel Broadcom into becoming the No.1 supplier of WiFi chips used in infrastructure.

Everything was tickety-boo for Broadcom until 2011 when Qualcomm bought WiFi pioneer Atheros and started to get serious about the market.

Now, according to Digitimes, Broadcom’s new owners Avago have been expressing dissatisfaction with the margins on WiFi chips and is going to exit the market.

What goes around comes around


Comments

6 comments

  1. Yes wise words Mike, I suppose a lot of product types are, or will be, in the same position now that scaling isn’t delivering the old benefits any more.

  2. SecretEuroPatentAgentMan

    Perhaps Broadcom fear that the ISM bands will be hijacked by the telecom companies using the Qualcomm initiative?

  3. Well Mike, I always rather assumed that the WiFi business re-generated its margins every time a new standard came along. Getting to the standard early, or even prematurely, seemed to secure the business at decent margins.

    • Agreed but I think current WiFi tends to be as good as most people need so there’s less innovation now. Still are new initiatives of course but we tend to hear of them a lot less than say a decade ago. Same with Bluetooth as well of course.

      • SecretEuroPatentAgentMan

        There are a few low hanging fruits to be picked still, like more seamless handover between WIFI routers with dissimilar names.

        As for other initiatives I see IrDA pretends to be alive still, with hot news dated 2011. Still, multi Gb rates would still be nice. Still used in Japan of course, but mostly dead around here.

  4. So another volume market is given to the Chinese. When will semiconductor execs realise that today’s higher margin niche is tomorrow’s commoditised product area.

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