For the last few years, tensions between China and the US have been rising, reaching a peak with the ban of new communications equipment from five of the main Chinese companies, including Huawei and ZTE, amid concerns over national security. To overcome this issue, China has started pushing its domestic industries to regain a monopoly over key technologies within its territory. This could potentially lead to the progressive removal of international companies from China.
KnowMade has previously highlighted that various technological sectors have become battlegrounds for China and the US (in “SiC power semiconductor technology: A future battlefield in the US-China trade war?”). Within its territory, it has become essential for China to secure some predominant sectors, such as power electronics, semiconductors, and telecom, which involves establishing a supply chain free from foreign companies. RF Front-End modules and more specifically RF acoustic wave filters are clear examples of how China may operate and use intellectual property (IP) to fulfill this purpose. Current IP players of acoustic filter technology are as much foreign as they are domestic in China.
What is the current IP status in China today?
Among the different components that make up an RF Front-End module for mobile applications, the acoustic wave filter is the segment that shows the highest level of competition. For about 5 years, the related Chinese IP ecosystem has been more dynamic compared to those in the US and Europe. This can be explained by the fact that, while in the US and Europe, there are well-established players, in China there is a higher degree of internal turmoil due to the large number of players, without a clear leadership position yet. The market and IP leaders remain foreign actors such as Murata, Skyworks, Qualcomm, and Taiyo Yuden. However, according to KnowMade's latest RF acoustic wave filters patent landscape, there is a shift happening right now, as evidenced by the significant increase in patent filings by Chinese players from 2019 to 2023. Over 2,600 patents have been published by Chinese players, showing a rapid acceleration in recent years (figure 1).
Figure 1: Time evolution of patent publications related to RF acoustic wave filters filed by Chinese entities
Table showing the time evolution of patent publications by Chinese actors in China in the RF acoustic wave filters sector.
Nevertheless, foreign IP players are still competing fiercely as they have published more than 2,300 Chinese patents at the same time. Today, the patenting activity in China is balanced between Chinese and foreign patent applicants, but it may shift in favor of local IP players in the future.
Figure 2: Most active Chinese IP players in 2023 according to their patenting activity related to SAW, BAW, Acoustic wave circuit and RF FE modules (source: RF Front-End Modules & Components Patent Monitor)
A young and moving ecosystem
Acoustic wave filter technology is very mature and has been used in commercial products for over 20 years. In such cases, the patent landscape is dominated by major industrial players, particularly in Western countries. This trend is not as evident in China, where a significant number of new patent applications are being filed by academic institutions. In other industries, like power electronics, KnowMade has successfully connected advancements made by academics with the emergence of new companies. However, we have identified only a few connections between Chinese research organizations and industrial players in the RF Front-End IP landscape. The sole one is between ROFS Microsystem and Tianjin University. Apart from this, we have not found any instances of shared patent ownership or significant IP licensing agreements in China in this field.
Vertical innovation rather than IP collaboration: from filters to modules
No IP collaborations between Chinese industrial players in the acoustic wave filters and RF Front-End modules IP landscapes have been identified. In general, IP players tend to adopt a vertical innovation strategy, aiming to control all segments of the supply chain. Such a strategy is similar to that of major Western companies. To fully comprehend the potential risks posed by Chinese players, it is essential to examine not only their patents related to RF filters but also their IP activity surrounding RF Front-End modules. Currently, the primary agreements are made between OEMs, and there is a lack of IP collaborations between Chinese IDMs. For instance, two major Chinese OEM companies, Huawei and Xiaomi, have entered into a cross-licensing agreement for various communication technologies, including 5G. Such agreement attests that Chinese industrial players recognize the importance of IP in their national and international development strategies.
What IP levers can China activate?
China's desire to establish a comprehensive RF Front-End module and components national supply chain, backed by IP and fundraising, is evident. In alignment with the government's intentions, Chinese IP players openly express their goal of regaining control over strategic technologies and their production. Companies such as Sappland Microelectronics and SDSX explicitly state on their websites their joint objectives of achieving a monopoly on the market by developing independent IP and at least mastering the RF Front-End module industry from components (PA, LNA, filters, switches, tuners) to module. This is not an isolated case, and we can see these two pieces moving concretely in the RF Front-End Modules & Components Patent Monitor.
Thus, the threat to foreign companies in China becomes a threefold reality:
- Firstly, established players may see their position compromised by legal actions. In a recent article for the Wall Street Journal, “China’s newest weapon to nab Western technology – Its courts”, Stu Woo highlighted the judicial path China was taking to acquire Western technologies.
- Secondly, foreign companies seeking to enter the Chinese market will encounter numerous patents, which may be increasingly limited in value but increasingly large in volume. This could serve as a deterrent and restrict foreign presence, as companies will have to navigate complicated procedures to invalidate these Chinese patents or negotiate licenses with the owners.
- Finally, the consequences of this strong development in IP activity in China are not confined to Chinese territory. If Chinese IDMs successfully strengthen their ecosystem and position in China, they may look to conquer new markets.
Fundraising and IP to support industrialization
Another point demonstrating the rise of a Chinese RF Front-End module ecosystem is the simultaneous increase in patent filings and fundraising announcements. As an example, we previously explored the case of EpicMEMS and MEMSonics, two emerging companies that have seen a significant rise in patent applications. Both companies have secured over $100 million in funding to launch their production, with the aim of becoming leading national providers of RF FEM. More recently, and further showing the national preference, SDSX, Chipbetter, Geo-Chip, and Sappland Microelectronics each successfully raised nearly 100 million CNY in July 2023. These companies are all involved in RF chip technology.
Companies such as EpicMEMS, Starshine Semiconductor, HunterSun, and OnMicro are gradually expanding their patent portfolio to cover other parts of the RF Front-End value chain. Examples of vertical innovators like Choicore and Chaocai Information, which manage to be present throughout the entire value chain, are noteworthy. Overall, from an intellectual property standpoint, it is noted that Chinese players now master all levels of this value chain, from materials to RF devices and Front-End modules.
Therefore, it cannot be ruled out that China may aspire to expand its position globally once its RF Front-End supply chain is established. India and Europe could potentially see an increase in the presence of Chinese providers, potentially accounting for half of the worldwide market. Companies such as ROFS Microsystem, RadRock Technology, and Lansus Technologies have already begun expanding their patent portfolios outside of China, particularly in the field of BAW filters.
