Deal enhances Qualcomm’s offerings in the LPWA segment while providing Sequans with capital for 5G RedCap development
Qualcomm has completed the acquisition of 4G IoT technology from France-based fabless semiconductor company Sequans Communications for a reported $200 million. The deal was made through Qualcomm’s IoT subsidiary, Qualcomm Incorporated. Sequans retains full rights to continue to use the technology commercially, via a perpetual license agreement, supporting the company’s ability to expand its 4G business and develop its 5G portfolio.
The addition of Sequans’ 4G IoT technologies to Qualcomm’s advanced end-to-end IoT solutions will strengthen Qualcomm’s Industrial IoT portfolio and provides a unique opportunity to build a leadership position in this low power space. As analysts Counterpoint highlight, the deal isn’t about market share. Qualcomm is already a dominant player in the global 4G IoT (non-automotive) market with a 23% share, while Sequans holds just 0.5%. Excluding China, Qualcomm’s market share soars to over 59%, with Sequans barely reaching 1.4%.
However, Qualcomm can now cater to a much wider audience of enterprise customers seeking low-power, reliable cellular connectivity for industrial IoT applications. According to Counterpoint, Qualcomm’s strength extends across the LPWA landscape, encompassing LTE-M, NB-IoT, Cat-1, Cat-4, and higher categories. While Qualcomm previously faced challenges in the Cat-1 bis segment, it has rapidly gained traction, increasing its market share from 2% to 16% outside of China within one year. This significant improvement demonstrates Qualcomm’s ability to compete effectively in all LPWA technologies without relying solely on external acquisitions like Sequans.
Qualcomm wants to fight better in a market dominated by strong Chinese competitors like UNISOC, Eigencomm, Xinyi, ASR Microelectronics and emerging players like Altair Semiconductor, according to Counterpoint. The acquisition helps Qualcomm address gaps in its offerings, particularly in the LPWA segment by incorporating Sequans’ superior Monarch series chipsets.
“We are pleased to add Sequans’ 4G IoT technology into Qualcomm’s broad product portfolio, adding to our robust, low-power solutions for dependable and optimized cellular connectivity for industrial IoT applications,” said Qualcomm Technologies group general manager, automotive, industrial and embedded IoT and cloud computing Nakul Duggal. “This acquisition supports our commitment to delivering cutting-edge IoT solutions and strengthens our position as a leader in intelligence at the edge.”
Sequans can invest
For Sequans, the deal is a good one. The company had been looking for potential buyers following a challenging 2023, during which its revenues nearly halved. The deal provides Sequans with the capital to strengthen its position and invest in 5G development while retaining its 4G technology for ongoing market service.
According to Counterpoint, earlier this year, Sequans strategically reduced its focus on certain segments, such as FWA broadband. It has now redirected its focus towards core areas of Massive IoT. This shift allows the company to concentrate on key technologies and significant customer wins, including partnerships with companies like Itron. Sequans has several promising projects in the pipeline, including advancements in LTE-M/NB-IoT technology and the anticipated launch of its 5G RedCap TaurusLT chipset, which is expected to contribute to its growth in the coming years.
“We are thrilled to finalize this transaction with Qualcomm and to retain a perpetual license to continue using, commercialising and advancing these technologies,” said Sequans CEO Georges Karam. “It validates the strength of our technology and ensures that our customers will continue to receive top-tier support on our 4G portfolio and cutting-edge 5G innovation from Sequans.”
“The asset sale is set to deliver significant benefits to our customers,” he said. “With a robust balance sheet, proven technology and a comprehensive portfolio that includes low-power LTE-M/NB-IoT, LTE Cat 1bis and the upcoming 5G Redcap/eRedCap technology, Sequans is very well positioned in the market. Supported by a seasoned team dedicated to cellular IoT, Sequans is set to provide best-in-class IoT products and services.”