Nokia has announced a partnership with Broadcom to develop its Reefshark system-on-chip (SoC) for its AirScale radio access hardware.
The June 15 announcement doesn’t detail what Broadcom’s role is in the partnership. In its press release, Nokia only said that it will “continue to further expand its silicon capabilities and improve the penetration of ReefShark solutions in its AirScale radio access portfolio.” With that said, it’s safe to assume that Nokia is taking steps to diversify its chip suppliers after running into issues with its primary supplier, presumably Intel and its 10nm transistor node.
Broadcom, one of the world’s largest network technology developers, has ample experience in networking hardware, including ASICs and SoCs for wired and wireless connectivity. Although Broadcom lacks its own semiconductor fabrication plants, it has deep relationships with fabs all around the world, including TSMC. In addition to Broadcom, Nokia also has partnerships with Marvell and Intel to develop and produce its chips.
Nokia has been battling to reduce the high cost of its ReefShark chips. According to FierceWireless, Nokia initially chooses field-programmable gate arrays (FPGA)–a chip that can easily be programmed but is more expensive–for its ReefShark products, but FPGA’s higher cost ate into the 5G profit margins. For 2020, Nokia will be slowly switching from FPGA to cheaper alternative custom chips.
In Nokia’s Q3 2019 earnings call, Nokia chief executive office Rajeev Suri said he expects the company’s cost-saving efforts to lower the prices of Nokia’s 5G products in early 2021.
The ReefShark SoCs will be used in a stack of Nokia’s AirScale radio access and baseband hardware.
Given that all three big telcos in Canada have signed deals with Nokia to build their 5G networks, the cost reduction is of interest to Canadian carriers that are developing their infrastructure. Nokia has recently been selected by Bell as its first 5G supplier choice. In addition, Telus and Rogers have also signed deals with Nokia for their own 5G networks.