NearLink (also known as SparkLink), China's homegrown wireless communication technology, entered commercialization in 2023 after being led by Huawei and supported by more than 400 Chinese companies. NearLink aims to reduce China's reliance on international standards, such as Wi-Fi and Bluetooth, dominated by the US.
NearLink was formed in 2019 after Huawei was banned from contributing to Wi-Fi and SD card standards bodies. This made Chinese firms realize the need for autonomous network standards. With over 430 industry participants spanning chip design, modules, testing, and terminal solutions, the NearLink Alliance gained significant traction, with chip/module manufacturers comprising the largest contingent at 24%. It is worth noting that only MediaTek from Taiwan's IC design sector is currently involved in the alliance.
Top 3 industries' distribution of members of the NearLink Alliance (*)
*As of November 2023, the NearLink Alliance boasts over 430 members.
Source: NearLink Alliance, DIGITIMES Research, February 2024
Upon closer inspection, Digitimes Research Analyst Jim Chien noted NearLink's emergence as a viable alternative to Wi-Fi and Bluetooth in the Chinese market, boasting competitive network latency and terminal connectivity metrics. The transition to commercial viability was catalyzed by Huawei's call to action, rallying industry stakeholders from chip design to end-product commercialization, primarily targeting China's vast domestic market. However, challenges loomed in establishing an ecosystem, and initial NearLink development wasn't aimed at replacing Wi-Fi and Bluetooth but rather coexisting with these established technologies.
NearLink has two main transmission modes - SparkLink Basic (SLB) and SparkLink Low Energy (SLE). SLB offers superior transmission speed, network latency, and device connectivity compared to Wi-Fi, finding applications predominantly in automotive and industrial settings. On the other hand, SLE shares similarities with Bluetooth, catering to consumer electronics such as wireless mice, keyboards, and wearable devices, benefiting from lower transmission distance and power requirements. This makes SLE particularly appealing to chip, module, or instrument manufacturers.
Chen views the maturation of its ecosystem could eventually lead to China mandating NearLink support in all wireless devices sold domestically, similar to how smartphones support multiple navigation systems like GPS, Galileo, BeiDou, and GLONASS.
Historically, Chinese communication chipmakers struggled to compete with top-tier Wi-Fi and Bluetooth players on the international stage. NearLink's tailored approach to the Chinese market presents a unique opportunity for domestic chip manufacturers to avoid direct competition with international giants like Qualcomm, Broadcom, Nordic, and MediaTek. However, challenges persist, especially concerning China's semiconductor fabrication capabilities.
While mature processes suffice for TWS earbud chips, advanced NearLink chips demand cutting-edge processes, posing a critical developmental bottleneck, particularly for players like Hisilicon relying heavily on SMIC for manufacturing support.
HiSilicon, Huawei's chip division, is the largest SparkLink chip provider. However, smaller Chinese chip firms are poised to leverage NearLink's ascent to break free from the dominance of international giants and bolster China's semiconductor autonomy. However, their growth depends on access to advanced foundry processes.
Hisilicon's NearLink Kirin A2, a low-power SLE chip fabricated on SMIC's 14nm process, represents the current state. However, Hisilicon's future roadmap toward higher-speed NearLink SLB chips hinges on SMIC's ability to break the 7nm process barrier, which is critical for future development. In contrast, MediaTek has already adopted the 6nm process for its Wi-Fi 7 chips.
Huawei's latest Mate 60 series showcased its proprietary 5G SoC Kirin 9000S and highlighted the support for NearLink. While NearLink's ecosystem continues to evolve, the interim period witnesses an intriguing dynamic of cooperation and competition within China's semiconductor landscape, heralding a new chapter in the country's wireless communication narrative.
About the Analyst
Jim Chien received his B.S. and M.S. degrees in communication engineering. He engaged in academic research of advanced signal processing and smartphone development and currently focuses on semiconductor technology development and market trends, especially in communication IC design and RF.
