WiFi Chip Prices Rise as WiFi 6 Router Demand Increases

Rising WiFi Chip Prices During the Semiconductor Shortage

During the global semiconductor shortage, WiFi chip supply became increasingly tight. According to information reported by a chip supplier in August 2021, the price of some WiFi chips used in terminal devices had risen to about $17, compared with approximately $3.50 a year earlier.

The shortage affected much of the semiconductor industry, while the supply of WiFi module chips remained limited. Longer chip delivery cycles also created challenges for manufacturers of computers, routers and other wireless devices. As a result, many manufacturers increased component orders to secure production capacity and reduce the risk of production delays.

Growing Demand for WiFi 6 Chips

Another factor driving demand was the transition from WiFi 5 to WiFi 6. As more consumers and businesses adopted devices supporting WiFi 6, manufacturers required greater quantities of compatible wireless chipsets.

WiFi 6 was designed to improve wireless network capacity, efficiency and performance, particularly when multiple devices are connected to the same router. These advantages made WiFi 6 increasingly important for home, office and enterprise wireless networking applications.

However, higher wireless performance also placed greater requirements on chipset design, manufacturing processes, power efficiency and thermal management. Combined with limited semiconductor production capacity, growing WiFi 6 demand added further pressure to the chip supply chain.

Impact on WiFi Routers and Wireless Devices

Chip shortages and higher component costs could directly affect the manufacturing cost and availability of wireless networking equipment. WiFi routers, 4G LTE routers, CPE devices and other wireless terminals all depend on semiconductor components for wireless connectivity, processing and network functions.

For router manufacturers, stable chipset supply is therefore an important part of maintaining production schedules and controlling product costs. Changes in semiconductor availability can also influence lead times, hardware configurations and the selection of chipset platforms for different projects.

From WiFi 5 to WiFi 6

Despite the temporary supply challenges experienced by the semiconductor industry, the transition toward WiFi 6 represented an important development in wireless networking.

Higher network capacity, improved efficiency in multi-device environments and better overall wireless performance made WiFi 6 increasingly suitable for broadband routers and CPE products. As wireless technologies continued to develop, demand for more capable WiFi chipsets was expected to remain an important factor in the router and mobile broadband device market.

For manufacturers such as Honlly, developments in WiFi chipsets and semiconductor supply are closely related to the design and production of 4G/5G CPE, WiFi routers and other mobile broadband devices. Maintaining flexible hardware solutions and following changes in wireless technology can help support different customer and market requirements.