Sequans gets €11m from French government for 5G eRedCap R&D

French IoT chipmaker Sequans Communications, which saw its $249m takeover by Japan-based Renesas Electronics come undone at the eleventh hour at the end of last month, has been granted €10.9 million from the French government to go towards development of 5G-based ‘reduced capability’ (RedCap) chips. The funding is from the government’s France 2030 Investment Plan to support “technologies… important to the national interest”.

The money, managed by Bpifrance, will actually be channelled into Sequans’ work with enhanced RedCap (eRedCap) technology, and will be taken in four tranches, as an upfront payment followed by three “milestone payments” over the duration of the project. The France 2030 Investment Plan, which has the telecoms as a key focus area, called for projects to accelerate the development of 5G and beyond as “sovereign solutions”.

A statement said: “In its proposal, Sequans outlined a plan to create a new-generation massive IoT chip supporting 5G NR eRedCap that meets the requirements of the 3GPP standard defined in Release 18 and beyond. 5G NR eRedCap will comply with the latest 5G NR networks and address massive IoT applications with cost-effective, low-power, and ultra-reliable connectivity required for industrial, utilities, medical, asset tracking, and automotive applications.”

Analyst house Omdia said in January that mass adoption of 5G RedCap for mid-tier IoT applications will start from next year (2025), commencing in China. The arrival of RedCap, it said, will help to drive overall cellular IoT connections to 5.4 billion in 2030, representing a (rough) rise of around 70 percent compared to 2023. Roughly, RedCap is expected to replace LTE Cat-4 and Cat-6 based applications, while eRedCap) will replace LTE Cat-1 and Cat-1 bis-based applications.

2G- and 3G-based IoT connections will vanish, effectively, by 2027, new research by the firm suggests. Meanwhile, 4G/LTE-based IoT connections will continue to dominate, going from around 2.6 billion in 2023 to 3.2 billion in 2030, constituting around 82 percent and 60 percent of the total cellular IoT market at either end of the period. 5G-based IoT connections will reach about 1.2 billion in 2030, comprising around 22 percent of the cellular IoT market, from virtually nothing in 2023. 

Georges Karam,chief executive at Sequans, said: “We are grateful that our proposal was chosen by France 2030 as it strengthens and secures our massive IoT low-power 5G product portfolio development. In addition to 5G NR eRedCap support, this new chip will be backward compatible with existing 4G networks, providing a smooth transition path from 4G to the latest 5G networks for the next ten years.”