Nokia has just signed a contract with Broadcom that will bring custom-made 5G chipsets for the smartphone brand. It is the third major company to sign such a deal after Intel and Marvell back in March. Through this contract, the Finnish company will be able to expand its presence in the market and increase shipments. The brand expects 35% of all 5G products to be equipped with this custom-made 5G chip by the end of 2020. Broadcom will be busy in the coming months to ensure Nokia’s demand.
Industry insiders state that Broadcom, along with the two other chipmakers, will help Nokia expand its ReefShark-branded platform. It is used in AirScale radio products while reducing the size and power consumption. Moreover, these companies want to deliver the improvements in the same time providing capacity and a major performance overhaul.
Due to the cost and supply chain challenges, Nokia had to rethink its decision to use Field Programmable Gate Arrays for its 5G equipment which is more flexible, but also more expensive. Sandro Tavares, Nokia’s head of mobile networks marketing, told Reuters that the company still stands by the decision to use FPGAs. According to him, the market is evolving fastly and Nokia needs to speed up the process of developing new suppliers.
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Broadcom’s ASIC capabilities will increase Nokia’s performance and reduce the time and resources spent
According to Tommi Uitto, president of mobile networks at Nokia, Broadcom’s ASIC capabilities will allow the Finnish company to deliver a high performance.
The Finnish company delivers 5G services to several markets across the world including 5G network operators for the United States. Therefore, the company needs to keep reducing the cost of its chips. In the first Quarter of 2020, the company said that 17% of its 5G equipment had custom chips. That is up from about 10% at the end of 2019, and by the end of this year, it intends to have custom chips in more than 35% of its 5G equipment. The company’s ultimate goal is to hit a rate of 100% by the end of 2022.
Nokia has a big opportunity in its hands to become one of the world’s biggest 5G solutions supplier. With the US government’s continuous campaign against Huawei, the Finnish company is a good option in the 5G segment. There are several countries that don’t want to go against the US, but that are desperately needing a solid 5G infrastructure.
We’ll probably see the first fruits of the new partnership with Broadcom in the coming months.
