Technology trade tensions have been escalating between China and the U.S. for some time. This is best exemplified by the U.S. ban on new communications equipment from Chinese firms like Huawei and ZTE over national security concerns. China is making strategic moves to regain dominance in its domestic technology sectors to combat these actions. These efforts include reducing foreign influence in key areas such as power electronics, semiconductors and telecommunications, particularly within the RF front-end industry.
TECHNOLOGICAL BATTLEGROUND: CHINA’S IP STRATEGY
For the past decade, China has been accelerating and intensifying its competitiveness in the semiconductor industry. The Chinese government has introduced numerous incentives to encourage domestic entities to develop their intellectual property (IP). China aims to establish and secure a self-reliant supply chain for RF front-end modules by focusing on IP development and control. This strategy ensures that domestic needs are met without relying on foreign technologies. The RF front-end module industry’s RF acoustic wave filter sector exemplifies this strategy in action.
SHIFTING IP LEADERSHIP IN ACOUSTIC WAVE FILTERS
The landscape of acoustic wave filter technology in China is highly dynamic, marked by intense competition among various players. Over the past five years, Chinese entities have experienced significant growth in patent filings, surpassing their Western counterparts in activity. Between 2019 and 2023, Chinese players published over 2600 new patent applications, indicating a rapid acceleration in their technological development.
A NASCENT AND EVOLVING ECOSYSTEM
Unlike the mature markets in the U.S. and Europe, where established industrial giants dominate, China’s acoustic wave filter technology ecosystem is still evolving. Many patents are being filed by academic institutions rather than established companies, reflecting a nascent stage of technological development and a growing but fragmented IP landscape. However, instances of collaboration between academia and industry, such as those between ROFS Microsystem and Tianjin University, remain limited.
Despite their late start, some Chinese entities have already closed the gap, quantitatively speaking, with established IP players. This is particularly true in the bulk acoustic wave (BAW) segment. Even though the technological impact and value of these patents may be questioned, especially since around 50 percent of the patent applications are utility models, they still serve as tools that can be leveraged to help Chinese companies grow their businesses.
Recently, some IP players have expanded their patent portfolios abroad. The U.S. and Europe are the primary regions for these extensions, but they are not the only ones, as Chinese entities are filing patents under the Patent Cooperation Treaty. This demonstrates not only a desire to protect inventions in other key markets but also attests to the ability of major IP players to develop valuable innovations. Figure 1 shows the position of Chinese patent assignees according to their patenting activity within the acoustic wave filter supply chain.
Figure 1: Chinese acoustic wave filter patenting activity. VERTICAL INTEGRATION OVER COLLABORATION
Chinese IP strategy tends to favor vertical integration, where companies strive to control all segments of the supply chain independently. This approach mirrors the strategy of major Western corporations. Notable examples include cross-licensing agreements between Huawei and Xiaomi for communication technologies, including 5G, which underscore the importance of IP in China’s industrial strategy.
Today, many Chinese IP players have well-developed core patent portfolios. The next step in this process is to expand them to include other devices and modules. Maxscend Technologies, MEMSonics, Starshine Semiconductors, Radrock Technology and Lansus Technology are among the most notable examples of such vertical integration strategies. Table 1 shows 2023 patenting activities for the most active Chinese patent applicants split by claimed technology.
STRATEGIC LEVERS AND FUTURE IMPLICATIONS
China is actively developing a self-sufficient RF front-end module supply chain supported by IP and substantial investment. Companies like Sappland Microelectronics and SDSX have openly declared their intent to dominate the market through independent IP development. This strategy presents several challenges for foreign companies operating in China:
- Legal Challenges: Foreign companies may encounter legal barriers designed to weaken their market positions.
- Patent Navigation: The increasing number of patent filings by Chinese entities could complicate and discourage market entry for foreign firms. Established foreign players may struggle to compete with the sheer volume of Chinese patents, potentially leading to costly and time-consuming patent litigation, invalidation or cross-licensing discussions.
- Global Expansion: With a strengthened domestic IP ecosystem, Chinese companies might seek to expand their global influence, potentially targeting markets in India and Europe.
However, these companies appear to be following similar strategies, leading to intense national competition in addition to international rivalry. This heightened competition resulted in a significant patent litigation case in China in July 2024, when Huawei initiated legal action against MediaTek over 5G technologies. This case highlights Huawei’s efforts to extend its patent licensing model beyond device manufacturers to the chip segment as well.
INVESTMENTS FUELING INDUSTRIAL GROWTH
Emerging Chinese companies have secured significant funding to enhance their production capabilities in the RF front-end sector. Companies such as EPICMEMS and MEMSonics have each raised over $100 million, while others like SDSX, Chipbetter, GEO-CHIP and Sappland Microelectronics obtained substantial funding in mid-2023. These companies have also significantly increased their patenting activities, demonstrating a strong correlation between market expansion and IP activity.
A GLOBAL VISION
With an established supply chain, Chinese firms aim for global market penetration. Companies like ROFS Microsystem, RadRock Technology and Lansus Technologies are already expanding their patent portfolios internationally, particularly in BAW filters. China’s comprehensive strategy, which combines IP development with substantial financial backing, positions it to potentially dominate the global RF front-end market in the coming years.