Since the advent of the 5G era, Samsung's network products have been broadly divided into two categories. For traditional users who do not wish to be affected by cloudification and related trends, Samsung offers a dedicated radio access network (RAN) based on custom chips from Marvell Technology. Another option is Samsung's virtual RAN product line, which uses general-purpose Intel processors.

However, the South Korean supplier's prioritization of Virtual RAN has raised questions about the long-term prospects of its dedicated product portfolio. According to sources familiar with the matter, developing chips for Samsung's future 5G and 6G network needs has begun to prove economically unfeasible within Marvell. Marvell's entire position in the RAN product market is now precarious.

Samsung's official stance is that its collaboration with Marvell continues as normal. In an emailed statement to Light Reading, the company said, "Samsung and Marvell will continue to collaborate on chips." However, the statement also acknowledged that Samsung is exploring alternatives, including developing its own chips. "Samsung has been designing and manufacturing its own modem chips for over 30 years, which differentiates it from other RAN suppliers," the statement continued. "Samsung has also been working with key partners outside of Marvell to develop modem SoC (System-on-a-Chip) chipsets designed for integration into the hardware baseband."

The challenge lies in the significant cost of developing more advanced chips based on smaller transistor sizes for a relatively small market. Nokia is another major RAN customer of Marvell. Early in 5G development, the company contracted with Intel to supply network chips based on a 10-nanometer process. A few years later, the transistor size of the Marvell chips used in Nokia's latest 5G products appears to be only half that of the original. Experts say that shrinking the size incurs high costs, especially in cutting-edge areas such as massive MIMO, an advanced RAN technology.

The Radio Access Network (RAN) market

Meanwhile, the Radio Access Network (RAN) market continues to shrink as operators drastically reduce network deployment investments. Although specific figures for last year have not yet been released, data from Omdia (the parent company of Light Reading), an analytics firm under Informa TechTarget, shows that RAN product sales revenue fell from $45 billion in 2022 to $40 billion in 2023, and further to only $35 billion in 2024. Ericsson and Nokia, the two largest non-Chinese RAN suppliers, have laid off tens of thousands of employees to maintain profit margins. Previously, market share had already declined; Nokia's Mobile Networks Group reported sales of €5.3 billion (approximately $6.2 billion) in the first nine months of 2025, with an operating loss of €64 million (approximately $75 million).

The deterioration in the telecommunications industry has also impacted Marvell's performance. In its fiscal year 2023 (ending January 2023), its operator division's revenue was close to $1.1 billion, accounting for more than 18% of the company's total sales. Two years later, annual revenue plummeted to only $338.2 million, less than 6% of turnover.

Marvell offset its revenue decline by significantly increasing sales of data center chips to meet the demands of artificial intelligence. Sales of carrier-grade chips also improved in fiscal year 2026, increasing 88% year-over-year in the first nine months to $436.3 billion. However, this is still only half of Marvell's revenue in the first nine months of fiscal year 2024, and market interest in radio access networks (RAN) appears to have waned. According to Motley Fool's earnings call transcript, 5G was mentioned 34 times in an earnings call in early 2021. However, in the most recent earnings call in early December, 5G was not mentioned at all.

The Customization cost of RAN chips

The lackluster performance of the RAN chip market has fueled interest in virtualization. Unlike application-specific integrated circuits (ASICs), which cater to a single need in a smaller market, general-purpose processors can meet a variety of needs, including those of RAN developers. Even if these processors require some customization to support specific RAN functions, the majority of the investment remains in developing the same technology for a larger potential market. This is more economically justifiable.

Concerns within Marvell about the cost of customizing future chips for specific telecom operators may be exacerbated by Samsung's small market share in the radio access network (RAN) sector. With the overall potential market shrinking, Samsung Networks' revenue plummeted from 5.39 trillion won (approximately $3.74 billion) in 2022 to 2.82 trillion won (approximately $1.95 billion) in 2024. In the first nine months of 2025, Samsung's network sales reached 2.1 trillion won (approximately $1.46 billion). However, according to Omdia, Samsung's market share also declined from 6.1% in 2023 to 4.8% in 2024.

Meanwhile, Samsung has clearly increased its investment in Virtual RAN, with its most prominent customers opting for this 5G technology. These customers include Verizon in the US (which has consistently touted Virtual RAN as superior to traditional 5G) and Vodafone in Europe. In October, the UK-based telecom company announced plans to use Samsung's Virtual RAN products in several European markets, starting with Germany.

Nevertheless, Virtual RAN itself still represents a small share of the Radio Access Network (RAN) market, with Samsung being its primary representative. Omdia predicts a 10% share in the RAN computing sub-segment in 2023, referring to the servers and equipment used to process signals received by radio units and their antennas. A major long-standing objection to Virtual RAN has been the inability of general-purpose processors to match the performance and efficiency of Application-Specific Integrated Circuits (ASICs). However, this concern appears to have eased with the launch of Intel's latest Granite Rapids series of chips.

Another major concern with Virtual RAN is the lack of alternatives to Intel, a company that has been struggling financially. Last year, Intel confirmed plans to spin off its networking and edge computing businesses, casting doubt on its commitment to the RAN market. However, last month, Intel secured $2 billion in funding from Japan's SoftBank and a $5 billion investment from Nvidia, providing relief to shareholders and customers and allowing the spin-off plan to be shelved. Despite rumors of RAN products based on AMD (using the same x86 instruction set as Intel) or Arm (using its competing architecture) chips under development, Intel currently appears to remain the only commercial option.

Nokia's transformation

However, this didn't stop Nokia from announcing its own shift towards general-purpose chips, which could impact Marvell. In October, the Finnish company received a $1 billion investment from Nvidia and disclosed plans to design software for 5G Advanced and 6G networks that will run on Nvidia's graphics processing units (GPUs), typically used in artificial intelligence or gaming.

A few weeks later, Nokia CEO Justin Hotard stated at Nokia Capital Markets Day, "We can shift our investment towards software and ultimately achieve differentiation and value in key areas – that's the shift from proprietary hardware to general-purpose hardware." Nokia is striving to reuse as much software as possible developed for Marvell chips, but some software needs to be designed from scratch. Furthermore, maintaining separate development processes for Marvell and Nvidia for 5G Advanced and 6G products respectively will increase costs.

This still puts Ericsson, the world's largest 5G supplier headquartered outside of China, in the spotlight. Unlike Nokia, Ericsson has two R&D pipelines: one is a dedicated radio access network (RAN) product line partially based on its own chips, and the other is a Virtual Radio Access Network (VRAN) line based on Intel. Unlike Samsung, Ericsson's dedicated product portfolio currently accounts for almost all of its sales. However, under CEO Börje Ekholm, R&D spending has increased significantly, projected to reach SEK 53.5 billion ($5.8 billion) by 2024, up from SEK 37.9 billion ($4.1 billion) in his first year in office (2017). However, Ericsson's return on capital has been poor, declining from 17% in December 2020 to 2.5% four years later.

Ericsson's senior management increasingly talks about virtualization technology, believing it allows for the development of a single software suite for multiple hardware platforms. They envision software initially designed for Intel CPUs being deployable with minor modifications to CPUs from AMD or Arm licensees. This flexibility, coupled with the narrowing performance gap between CPUs and ASICs, makes it difficult for Ericsson to justify investing in developing its own chips.

If Marvell exits the market, 5G developers will have very limited options for RAN chips. Aside from RAN vendors themselves, only Intel and Marvell currently hold significant positions in 5G macro networks. Some experts believe that Nvidia's GPUs are still too expensive and power-intensive to be a viable alternative. AMD has made little progress. While AWS now offers Graviton chips for RAN computing, other cloud platforms are unlikely to offer these chips.

According to Earl Lum, founder of analytics firm EJL Wireless Research, Broadcom might be a potential target. However, he points out that Broadcom's role in the Radio Access Network (RAN) field has so far been primarily focused on radio units, such as providing digital front-end chips for Nokia. Attracting Broadcom or any other company into this market with its limited growth prospects will not be easy.

Source: Compiled from lightreading

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