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Exclusive: Resonant CEO On Role In 5G Development: 'We're Basically Arms Dealers To The Filter Business'

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Exclusive: Resonant CEO On Role In 5G Development: 'We're Basically Arms Dealers To The Filter Business'

The future of 5G service is as expansive as the imagination, but the key to opening this future could be the size of a grain of sand.

Santa Barbara, California-based startup Resonant Inc. (NASDAQ: RESN) could be the catalyst for 5G’s future via its patented radio frequency (RF) filters, which are widely known as a component embedded into a smartphone.

To explain how these filters will shape the 5G environment, Benzinga spoke with Resonant Chairman and CEO George Holmes and ‎Vice President of Corporate Business Development and Product Marketing Mike Eddy.

BZ: For the benefit of those who are not familiar with your company, can you please tell us about your technology and where it fits in the 5G environment?

Holmes: This is kind of a quick Cliff Notes version of what Resonant is and what we do. We have an ISN software tool that allows us to develop very complex RF filters, particularly being designed and targeted for mobile applications. We find them going into lots of different applications, in particular driven by 5G and what's happening in WiFi 6 and 6e categories.

From an IP perspective, we have over 350 patents filed and issued, and over 100 are targeted specifically at 5G. Because of 5G, we've leveraged our software tools to invent some pretty interesting technology. One of the big things about 5G is having very wide pipes — we're trying to get the devices to do virtual reality, high-definition videos, and get lots of data into our phones very, very quickly.

The historical, embedded technologies that have enabled 4G won't work in 5G — they can't get there and kind of run out of gas when you get to these higher frequencies. We've got this next generation filter technology that puts us in the right place at the right time.

What is filter technology as it relates to 5G?

Holmes: If you look at these huge pipes coming to your phone and all of the different data types — whether it be GPS, RFID, WiFi, Bluetooth or all the different types of cellular signals — they're all out there colliding.

What you have with filters are little fences that actually keep signals in the proper lane on the highway. If you think about, the data pipe coming to your phone started out as a 10-lane highway and is now a 100-lane highway, and all of these little filters break this up and deliver data to where it's supposed to be in your phone.

What does it mean to a user when the filter isn't working properly?

Holmes: Well, we've all had this experience, but we just didn't know what it was. Our phone starts getting hot when we're talking on it. That's because filters aren't working well. The power amplifiers in the phone are having to work harder, your battery life goes down and you drop calls. Today, we're doing filters for the next generation of phones. And we think we're the only game in town that has the technology can meet the application requirements for the future.

Mike Eddy: Filters in phones are not the sexiest things, and people don't realize how many of them there are in modern phones. For example, the latest iPhones have about 100 filters in there and every piece of spectrum that you use globally needs protection. That’s what we do, and it's not just for 5G but also for the new WiFi standards. All of these new wireless technologies need wide bandwidth, and that's where the requirements for filters changed.

We were lucky enough to realize that 5G is extremely disruptive. We have a software platform that is unique and is extremely accurate at predicting the performance of these RF filters.

We can use our ISN platform to look at what is the optimal structure for these new requirements. And it also turned out there are materials invented by some other companies that allowed us to use a new technology, which are called engineered substrates, where we can take advantage of the flexibility of those substrates.

In order to invent this new XBAR technology — it means that we can get the right kind of acoustic wave material on silicon, with the right orientation and the right crystal entity that we could model to match these new requirements.

To reiterate: You don’t manufacture these filters, correct?

Holmes: Well, this is the great thing: we don't make anything. We design filters and we license them to filter manufacturers and let them build them. It gives us a fantastic business model, right?

We're basically arms dealers to the filter business. You've got these very, very large filter manufacturers — there are seven of them that actually represent 98% of the global market — and we happened to be very, very lucky that when we introduced this new filter technology two years ago, everybody was excited about what we're doing.

Nobody believed it can be done, because we're doing this super high-frequency wide bandwidth filter in a fashion that people didn't think could be done. We came up with this really cool new technology, we demonstrated it and everybody was excited about it.

When we were working to try to find our first customer for the technology, we got lucky and Murata (Pink: MRAAY) signed up to be our first customer and made a strategic investment in us.

Where's the 5G environment today, both in the United States and around the world?

Eddy: It's the early days for 5G. What's happened with 5G in the U.S. is the operators wanted to get a footprint out as quick as possible to market 5G and to be able to claim that they are the first nationwide 5G network.

But rather than give us new bandwidth, they've actually reassigned 4G bandwidth for 5G and this is essentially using the 4G infrastructure for 5G. That's why if you read any reports, 5G speeds are about the same as 4G in the U.S.

China was leading the way and started to deploy real 5G infrastructure, but that's probably going to change because of the position with Huawei right now.

The EU is further behind because it's expensive to build these networks and to almost all of their 4G network was built by Huawei. Because the transition from 4G to 5 requires that you interface both networks and they desperately tried not to use Huawei for 5G, that's really put a hold and a delay on the strategy of moving to 5G. There has been talk about pulling out their 4G network and deploying 4G and 5G networks at the same time because when 5G comes along, 4G doesn't go away — you’ll still that most of the net traffic will stay on 4G connection for the next four years.

What are your plans for the remainder of 2021 and into 2022?

Holmes: For us, we're heads down right now as a technology development company. We had a massive milestone in October, which was a year into the Murata contract, when we passed the technical validation milestone, which was the first milestone.

And then they did a big thing that we didn't know was coming: at their annual shareholders meeting in November, they did the unthinkable for a Japanese company in their investor presentation by having two slides on our technology and on us.

They talked about what technologies they would need to support next generation networks, and for RF filters, they said Resonant’s technology.

We're also focused on the WiFi segment of the market, because the bandwidth required for the WiFi segment is much wider — that will play really well to the strength of our XBAR technology.

The operators are all telling us that we're planning on delivering is going to be kind of the has the potential to dominate, so we're aggressively pursuing our next, contracts with our customers. So that's probably what's big.

And then we've got our legacy business, which continues to grow. Our legacy business is the work that we're doing in 4G, 3G and 2G with our older technology. Obviously, those technologies are much more commoditized. So, we've created a platform that makes it easy for companies to engage with us take standard designs off the shelf and integrate them into their process and go manufacture them.

We don't do a lot of custom work in that second side of the business any longer. When we started the company, that's all we did, because we didn't have any customers yet. You do what you got to do to survive and to grow, and to kind of set up footprint and prove out your technology, and that's what we did.

Now, we have the best of both worlds: our legacy businesses growing and we're well positioned for the next generation technology with our XBAR platform. And then, we've got one of the largest IP portfolios out there.

We're a little company, so that's pretty exciting.

(Photo courtesy of Resonant.)

 

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