A few days ago, the annual Mobile World Congress (MWC2025) arrived in Barcelona, Spain. At this exhibition, which is known as the vane of the mobile communication industry, communications, mobile phones and chip manufacturers from China have increasingly become an important force, leading the industry in technological innovation such as 5G, AI and the Internet of Things.

At this year's MWC, the second exhibitor, Arcjet Technology Co., Ltd. (688220.SH) showcased a number of innovative applications and products, including the first LTE octa-core smartphone platform, and the world's only chip platform for IoT and smart wearables that supports both RedCap+ Android.

Leading the 5G Redcap IoT innovation and enriching the layout of mobile phone chips, the strategic layout of Aojie Technology was highlighted at this MWC. On the basis of the solid advantages established in the field of Internet of Things chips, increasing investment in the smartphone chip business and expanding the business boundary, "smartphone + wearable" is expected to provide a two-wheel drive for the future development of Aojie Technology and further enhance its position in the global communication chip market.

The eight-core smart machine chip is here

As one of the few IC design companies in the world that has mastered the development capabilities of 2G-5G full-standard cellular baseband chips, the company's technical strength in the field of wireless communication provides a solid foundation for its entry into the smartphone chip market.

In recent years, Arcjet has increased its investment in smartphone chips and achieved rapid iteration. The smartphone chip business has become a long-term development direction.

Last year, Arcjet launched the company's first 4-core smartphone chip ASR8601, which has been mass-produced and shipped to white-label customers in Latin America and China. In addition to smartphones, ASR8601 shipments also cover smart watches, smart tablets, learning machines and other scenarios. As of 2024, the chip will have shipped millions of units, showing that the chip has been recognized in some smart terminal markets, opening up the situation for its development in the field of smartphone chips, and accumulating experience and user base for subsequent product iterations.

In addition to inheriting the advantages of high-integration ASR8662 and low-power design, Arcjet also introduced a ASR8661 ASR866X series of innovative features such as self-developed NPU and self-developed ISP through built-in construction, bringing better image effects and multimedia capabilities, bringing more choices to the 4G smartphone market.

Specifically, the CPUs of the ASR866X series adopt the mainstream 8-core ARM Cortex CPU architecture (2xA76 @1.8 GHz+6xA55 @1.5 GHz), which has powerful computing power and excellent multi-threaded processing advantages.

The GPU is equipped with Arm G310 (with a frequency of 819MHz), which has advantages in performance and power balance and graphics processing performance, supporting up to 1080p@60fps H.265/H.264 encoding and 1080p@60fps H.265/H.264/V8 decoding, which can run multimedia applications such as video and games smoothly, and supports FHD+@60fps and HD+120fps resolution and refresh rate.

In order to further strengthen the capabilities of AI and imaging. Combined with the self-developed ISP equipped with the whole system, Aojie Technology has introduced a 1TOPS computing power NPU into the ASR8661 platform, which can support a variety of algorithms such as hardware multi-frame noise reduction and self-developed video image stabilization, bringing better low-light performance in actual shooting and improving the clear and delicate image experience. The ASR866X series supports (Apple) HEIC photo format, which has better color reproduction effect and better compression ratio, only 1/3 of the size of JPG format under the same picture quality, and more than 3 times more photos can be stored in the same mobile phone memory, which greatly saves memory space for users.

It should be pointed out that Aojie Technology has a deep accumulation of ISP-related IP, and has gradually established cooperative relations with terminal brands by licensing image processing (ISP) and other IP technologies to mobile phone manufacturers such as OPPO and Xiaomi, and at the same time further deepened the understanding of market demand, continuously optimized the technology and improved the performance, laying a solid foundation for the subsequent research and development of ISP, and also enhancing the market competitiveness in the field of high-performance image processing technology.

In addition, the ASR866X series adopts a highly integrated architecture design, based on the 8-core ARM Cortex CPU architecture, and integrates AP/RF/GNSS/FM on a single chip, which greatly simplifies the hardware design and provides better power consumption control performance. Compared with UNISOC T615, MediaTek Helio G85 and other competing products that commonly use plug-ins, the high integration of the ASR866X series brings more efficient data transmission, and at the same time, through the collaborative optimization of the system, it can significantly improve the power consumption performance, the optimization of motherboard space and wiring, and further optimize the cost of the whole machine.

In terms of wireless connectivity, the ASR866X series supports Wi-Fi 6 and Bluetooth 5.4, making mobile phone connections more secure and bringing a smoother network experience. Storage interfaces, including eMMC5.1, UFS2.2, LPPDDR4x, and LPDDR3, can also achieve extensive support.

According to the Antutu test data, the overall performance of the ASR866X series is ahead of the competition, and it has the advantage of cost performance.

Comparison of a mobile phone equipped with a ASR866X platform (first from the left) and a competitor's platform

ASR866X In terms of highlight performance, it can be seen that the highlight detail is ASR866X retained, while the brightness of the dark area is increased, with a wider dynamic range.

Comparison of a mobile phone with a ASR866X platform (first from left) and a competitor platform

Another set of samples shows that smartphones with ASR866X chips show significant advantages in imaging performance. Thanks to highlight protection technology, subjects such as flowers maintain accurate exposure control when shooting high-contrast scenes, while detail is fully preserved. In addition, the sensor's image processing capabilities are also excellent in low-light environments, capturing more dark details and significantly improving the image quality of low-light scenes.

At the same time, thanks to the powerful hardware multi-frame noise reduction capability of the ASR866x chip, the preview image and video capture are processed by MCTF (Motion Compensation Time Domain Filtering) to achieve an excellent balance between noise suppression and detail preservation, which significantly improves the image quality performance of real-time preview and video recording.

From the perspective of the industry, the smartphone chip market has been dominated by Qualcomm and MediaTek for a long time, and Aojie Technology, as one of the very few chip designers in the world with 2G/3G/4G/5G full-standard communication technology layout, has broken through technical barriers and patent restrictions, and overseas market expansion and domestic substitution opportunities have provided it with differentiated competition space.

On the basis of the successful introduction of the quad-core smart machine chip to the market last year, the eight-core product has been launched this year to achieve rapid iteration, reflecting the determination of Arcjet to continue to make efforts in the smartphone chip business, and it is expected that with the continuous evolution of the future product planning route (high performance, 5G), the smartphone business will become the second growth curve of Arcjet.

There are still opportunities in the mobile phone chip market

At present, the world is accelerating the deployment of 5G networks, especially in China, which has become a global benchmark after the commercialization of 5G in 2019.

There are some views that at the moment when 5G is developing rapidly and 5G smart phones are widely popularized, the 4G smart phone market space is limited, and the mobile phone chip market has been mainly occupied by Qualcomm, MediaTek and other large manufacturers, and the opportunity for late entrants is small. The author does not agree, because if you take into account the global and market segment demand, there is still room for 4G smart phone chips, and there are also opportunities in the mobile phone chip market.

First, emerging markets such as Latin America, Africa, and India still have potential. These areas are generally undergoing the process of switching from 2G feature phones to 4G smart phones, and there is still a great demand for 4G networks. According to the data, in 2024, the shipment volume of the Latin American smartphone market increased by 15% year-on-year to 137 million units, of which the segment priced below $300 accounted for 72% of the total annual shipments. In 2024, mobile phone manufacturer Transsion will sell 107 million 4G smartphones in the African market, a year-on-year increase of 15%.

Secondly, a large number of specific consumer groups such as the elderly and students who are more sensitive to price require mobile phones to meet basic communication, social networking, entertainment and other functions. With its cost-effective advantages, 4G mobile phones can often better meet the needs of consumers in this part of the market.

Third, in recent years, as Qualcomm, MediaTek and other chip manufacturers have increased their efforts on the high-end flagship product side, and the entry-level product definition and related investment in emerging markets have slowed down.

According to Jiwei.com, Aojie Technology has set a roadmap for continuous evolution of smartphone chips, and will continue to launch at least one smartphone chip every year starting from 2023, 4G 4-core chips will be launched in 2023, 4G 8-core chips will be launched in 2024, and 4G 8-core chips will be launched this year.

It should be pointed out that many technologies and experiences of 4G octa-core smart machine chips, especially those related to application processors, such as CPU, GPU, multimedia, etc., can be reused in the research and development of 5G smart machine chips, which also lays the foundation for the roadmap of Aojie Technology to carry out 5G smart machine chips. At present, Arcjet is actively promoting the research and development of 5G smartphone chips, and the 5G baseband chip has been successfully taped out in 2022, and is currently actively promoting the mass production process, and is expected to launch 5G smartphone SoC chips in 2026.

According to data from market analyst TechInsights on the global smartphone market in the fourth quarter of 2024, global smartphone shipments increased by 5.7% compared to last year to 1,217.8 million units. The market recovery was led by Africa, the Middle East, Latin America and the Asia-Pacific region. Among them, emerging markets such as Africa, South Asia, Latin America and Southeast Asia are still the main markets due to the slow construction of 5G infrastructure. With the continuous evolution of technological innovation and market demand, the 4G and 5G markets will coexist for a long time and have an obvious long-tail effect.

In terms of overseas markets, the successful shipment of the Latin American market is an important step in the globalization strategy of Aojie Technology, and it also lays the foundation for the mobile phone chip business to further develop the market. At present, Arcjet is adopting a pragmatic strategy to promote the development of markets in Africa, Southeast Asia and other regions. On the basis of ensuring the iteration of product speed, we started from white-label and localking customers, and gradually expanded to second- and third-tier and first-tier brands.

Leading the way in driving 5G Redcap innovation

As a "lightweight" 5G technology, RedCap is an important evolution direction for 5G for medium-speed and large-scale IoT scenarios, and 5G RedCap technology has significant advantages in smart wearable devices, especially in optimizing the balance between performance, cost, and power consumption. However, the application of consumer smart terminals such as smart wearables and smartphones is still in the stage of development.

However, with the continuous development and maturity of 5G technology and the advancement of lightweight technologies such as 5G Radcap, the application of 5G in the field of wearable devices is gradually increasing. Although the cost of 5G RedCap is quite different from that of Cat.4 at this stage, as major operators promote the commercialization of 5G RedCap and the follow-up effect brought about by the introduction of Apple's smart watches this year, it will accelerate the switch of wearable products such as smart watches to 5G Redcap. From the perspective of the industry, smart wearables have begun to enter the 5G era, and the future market space will gradually increase.

In the field of 5G, Arcjet has always kept up with the evolution and innovation of technical standards. Especially in the field of RedCap, the company took the lead in investing in the basic research and development of 5G RedCap chip technology, and successfully achieved commercial mass production. At present, Aojie Technology has launched the RedCap chip platform for the two major application scenarios of smart Internet of Things and smart wearables, further expanding the industrial application territory of 5G.

At present, Arcjet has launched the RedCap chip platform for the industrial Internet of Things and smart wearables respectively, and it is also one of the few mobile phone chip manufacturers to independently build a chip platform for RedCap.

In the second half of last year, Arcjet has launched the first high-performance and high-integration, 5G RedCap terminal commercial chip platform ASR1903 for the Industrial Internet of Things, which meets the R17 standard and supports RTOS and Linux dual operating systems, which can be widely used in vertical industry scenarios such as smart modules, smart grids, industrial Internet of Things, and smart finance. At present, ASR1903 has entered the stage of large-scale commercial use, and has successively obtained the warehousing certification of China Mobile and China Unicom.

The first RedCap smart wearable chip platform (entry-level) ASR3901 also successfully passed the China Mobile chip certification a few days ago, which shows that the relevant chip products have excellent RedCap communication performance and high-quality product experience, laying a solid foundation for the large-scale commercial use of RedCap technology and the development of industrial ecology.

The ASR8603 series launched this time is a new smart wearable platform (high performance) that supports the Android system, and it is also the only smart wearable chip platform on the market that supports 5G Redcap + Android.

The ASR8603 series of Arcjet Technology complies with the 3GPP R17 standard, supports NR SA/LTE Cat.4 dual-mode, and covers the mainstream frequency band of 450MHz~6GHz.

The processors of the ASR8603 series adopt a quad-core architecture of 1x A76 1.7GHz + 3xA55 1.5GHz, and integrate RF system and GNSS unit, with simplified antenna design, which can bring low power consumption, high reliability and longer battery life experience to 5G devices. The memory is LPDDR3 1866Mbps, LPDDR4x 3200Mbps, and eMMC 5.1.

In terms of display, ASR8603 supports the highest FHD+ resolution and 120Hz refresh rate, which is suitable for smooth UI experience & lightweight 3D games, and can automatically adapt to screen optimization to adapt to smart terminal applications such as mobile phones and tablets.

ASR8603 supports hardware-level self-developed ISPs and NPUs, with a NPU computing power of up to 1Tops, and supports 1080p@30fps H.265/H.264/VP8 encoding and decoding. The camera supports single camera 50MP or dual camera 16MP+8MP, with a variety of safety features

In addition, the ASR8603 series is equipped with a low-power Sensor Hub (RSIC-V 512KB), which can dynamically schedule NPU resources for low-power AI computing, realize AI voice noise reduction, AI sensor data analysis, and AI image vision processing, further reducing device power consumption and extending battery life. The wireless connection solution with built-in GNSS and external wifi6+BT5.4 provides strong performance support for smart wearable devices to meet the needs of users in communication, multimedia, health monitoring and other aspects.

The ASR8603 series inherits 5G-native capabilities including network slicing, 5G LAN, URLLC, and high-precision timing. Since ASR8603 can support the most widely used Android operating system in the world, devices and end customers equipped with ASR8603 can quickly integrate existing Android development resources, greatly improve development efficiency, and accelerate product launch.

On the one hand, the launch of the ASR8603 series is an expansion and improvement of the Redcap wearable platform product line, from entry-level to high-performance, marking the addition of another heavyweight chip platform to the RedCap product line. With the first-mover advantage in 5G RedCap, Arcjet has become the first echelon of the industry, and it is also another solid step in its continuous promotion of the commercialization process of RedCap.

On the other hand, "RedCap+Android" enables the ASR8603 series platform to have the advantages of strong compatibility, convenient development, wide application scenarios, better user experience and high network adaptability, which can expand more application scenarios and further reduce the entry threshold of RedCap terminals, making it an ideal choice for lightweight consumer terminals represented by smart wearables and a wide range of IoT devices, and promoting the enrichment of terminal products. It is of great significance to facilitate the widespread implementation of 5G applications.

Five advantages to develop the smart wearable market

With the improvement of 5G infrastructure, the demand for diversified scenarios and ubiquitous smart terminals in the Internet of Things era has also shown an explosive trend, opening up new market space for wearable device chips. In the latest 2024 financial report released by Arcjet, revenue increased by 30.23% year-on-year, among which, cellular IoT products made breakthroughs in the market segment, and sales rose sharply.

The wearable market has a variety of consumer groups, taking smart watches as an example, they are divided into children's watches, adult watches, elderly health care watches, etc., with the core demands of their respective segments. Chip manufacturers need to develop corresponding needs for different groups of people. At the same time, it is also necessary to solve the challenges of battery life, board area, ecological function, user experience, cost and other aspects, especially in the face of rapid changes in demand and fierce market competition, how to provide a complete solution to help terminal manufacturers quickly land their products is the key to the success of chip manufacturers.

After years of development, Arcjet's smart wearable products have formed the following advantages.

First, high integration and high performance. High-performance hardware such as CPUs and GPUs, as well as abundant peripheral interface circuits. The high degree of integration and small area of the package make the design more flexible and bring a more compact and beautiful appearance of the whole machine.

The second is independent communication capability. Cellular products are shipped worldwide and have passed hundreds of carrier compatibility certification tests around the world. It can adapt to the network requirements and standards of different regions of the world. The communication capability covers all scenarios, so that it can stably connect to the network and ensure smooth communication in different environments.

The third is long-lasting battery life. With a large number of self-developed IPs, Aojie has a deep accumulation in low-power circuit design, which is very suitable for the needs of wearable and other smart terminal devices for long battery life and miniaturization.

Fourth, we will deepen the market segment and improve the ecology. From entry-level to high-performance, it provides complete solutions for different groups of people, different scenarios and other market segments, supports a variety of mainstream systems and extended applications, and can give terminal devices higher flexibility and scalability.

Fifth, AI supports intelligence. It supports dozens of health and exercise algorithms such as gesture recognition and sleep monitoring. The integrated independent sensor hub can efficiently process sensor data and reduce system power consumption. The self-developed ISP works with NPU and VPU and uses a variety of noise reduction algorithms to significantly optimize image and video quality when taking photos and video recording, meeting the needs of users in scenarios such as social sharing, health monitoring, and exercise recording.

On this basis, Arcjet is able to provide chip-level turnkey solutions, including hardware design, software systems, reference designs, development tools and support, and ecological adaptation and enrichment of the whole process, so as to help customers reduce the difficulty and cost of smart watch product development and accelerate product launch.

At present, Arcjet's smart wearable products have covered nearly 100 brand customers, with a cumulative shipment of more than 60 million units. The shipment market covers the whole world; The product covers all ages and continues to iterate.

In terms of the domestic market, Aojie Technology is committed to achieving breakthroughs in first-line brands, enhancing the market recognition and market share of its products and further expanding its brand influence with the help of the market influence and channel resources of first-line brands. In terms of overseas markets, we actively expand overseas markets such as Latin America, Africa, and Southeast Asia, actively conduct field tests in multiple regions, and achieve breakthroughs and shipments through cooperation with local brands such as localking and second- and third-tier brands, so as to expand the market territory, reduce dependence on a single market, and achieve market diversification.

At the MWC, Arcjet exhibited nearly 20 smart watches based on the smart wearable chip platform, covering children's watches, youth watches, adult watches, health watches and professional sports watches, fully demonstrating its extensive product layout.

From the perspective of the industry, smart wearables, as one of the key tracks that Aojie Technology has been deeply cultivating for many years, have been investing for a long time, constantly innovating and evolving technologies and products, planning and launching many products and independent platforms, and continuing to work the customer side, which is a significant difference between it and other mobile phone manufacturers such as Qualcomm, MediaTek, and Zhanrui.

With continuous innovation and continuous enrichment of the product matrix, Arcjet has achieved multi-point flowering in the fields of smart home, smart wearable devices, and industrial Internet of Things by covering all scenarios of communication protocols (cellular + non-cellular), and is expected to benefit from the incremental demand brought by emerging technologies such as 5G RedCap in the future, and the market scale will expand steadily and show a rapid growth trend.