The first carburetor was patented in 1888. It achieved its primary goal of spitting air and fuel in a chamber at the correct ratio for combustion.
A hundred and thirty years later- after multiport fuel injection and engine control units – that original carburetor is defunct.
The same thing is happening inside mobile devices. Components are being revolutionized to handle the ever-expanding bandwidth required to facilitate the demands associated with gaming, streaming video, etc.
One of the most essential components of any mobile device is the RF filter because it controls the way in which radio frequency (RF) waves are received by the device. This is true in all wireless environments including both cellular and Wi-Fi, where the number of filters is expanding rapidly thanks to increased data demands. As data demand increases, new frequencies are needed to handle the overflow. With most of the low frequencies already dedicated, new cellular and Wi-Fi frequencies are coming that are much higher and more difficult to use than the current generation.
The current generation of bulk acoustic wave (BAW) filters are relatively limited in capability, covering frequencies from 1.8 GHz to 3.2 GHz. Broadcom (AVGO) and Qorvo (QRVO) are the leading suppliers with over 90% of the market, but they have not shown that they can handle many of the frequencies that are coming over the next few years including the current high-frequency 5G cellular and Wi-Fi bands.
Akoustis (Nasdaq: AKTS) is attempting to change the landscape in the RF filter market and revolutionize the industry. On March 06, 2018 the Company announced that it had finalized the manufacturing process for its single crystal BAW. The XB1’s process is a patented method used to manufacture Akoustis’ filters for both cellular and Wi-Fi wafers. According to the company, the XB1 process is capable of producing wafers with frequencies up to 7 GHz, well above 4G and most major proposed 5G cellular bands, and above the current high-frequency Wi-Fi bands. Less than two weeks after it locked its process, Akoustis introduced its first commercial product, the AKF-1252. This new filter is the industry’s first BAW RF filter in the 5 GHz unlicensed spectrum for WiFi. The unlicensed spectrum represents Wi-Fi bands that are not owned and operated by carriers like AT&T, Verizon, Sprint, and the like, so you don’t have to pay to use them.
The AKF-1252 is built to handle the tremendous Wi-Fi demands of the modern world. In addition, the AKF-1252 is nearly twenty-five times smaller than similarly powered filters. This means that the AKF-1252 can be used in mobile devices, not just access points and routers.
The filter’s small size and robust capabilities could make it a very attractive component for mobile device manufacturers.
Earlier this week, the company announced a new addition to its product line. The AKF-1938 wafer operates in the 3.8GHz spectrum and targets radar-based applications, such as phased-array antennas, used in the military market.
If the AKF-1252 and AKF-1938 become the new industry standards, the market demand should be significant. According to a 2017 Mobile Experts report, the BAW RF filter market was approximately $2.6 billion in 2017 and is expected to grow to $4.8 billion by 2021.
AKTS already has four customer engagements for its new XB1 process, which could be the beginning of market traction for the company.
We believe that the current generation of RF filters are going to get phased out just like the carburetor. Based on the performance capabilities of the AKF-1252 and AKF-1938, we believe Akoustis has the ability to become the leader in the RF filter market. If that were to happen, the company could become a very attractive acquisition target for one of the larger stalwarts, that isn’t able to innovate as quickly as Akoustis.
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