Does US$94 Million Series B Funding for Morse Micro Signal a Reversal of Fortunes for Wi-Fi HaLow?

Morse Micro, a leading chipset vendor for the nascent Wi-Fi HaLow (802.11ah) protocol, has secured US$94 million through Series B funding, and a new strategic partnership with Japanese fabless company MegaChips, which will provide valuable sales support and additional distribution channels. The capital raised—a sum over 4X the amount previously invested in the company—is the largest outside investment into Wi-Fi chipset technology in recent years, and reflects renewed confidence in a protocol that, until now, has largely been overshadowed by competing technologies. While this will provide a welcome boost to the ecosystem, it should be remembered that Wi-Fi HaLow will not displace the competing low-power connectivity technologies, but rather is a technology with a clearly defined, but narrow niche that ecosystem vendors should focus on exploiting.

Wi-Fi HaLow, otherwise known as 802.11ah, operates in the sub-1 GHz unlicensed band, with narrowband Orthogonal Frequency-Division Multiple Access (OFDMA) channels spanning 1, 2, 4, 8, and 16 Megahertz (MHz). The possible range of Wi-Fi HaLow is 10X that of standard Wi-Fi equipment, with data rates spanning from a maximum of 86.7 Megabits per Second (Mbps) at short distances to 150 Kilobits per Second (Kbps) when 1 Kilometer (km) from the source. This range, combined with high energy efficiency, superior building penetration, the ability to support more than 8,000 devices connected to a single point, and the avoidance of the heavily congested 2.4 Gigahertz (GHz) band have resulted in many proclaiming that Wi-Fi HaLow will become the solution of choice for long-range battery-operated Internet of Things (IoT) devices, such as cameras and sensors. Proponents of the technology might argue that Wi-Fi HaLow’s advantage is that it sits in the “Goldilocks zone” between low-power, short-range technologies like Bluetooth Low Energy (BLE) and Zigbee, and low-power, wide-area network solutions such as Narrowband-IoT (NB-IoT), Sigfox, and LoRa. While this may be true, it also means that the technology is only attractive for applications that fall within the narrow zone that these other existing solutions cannot serve, which is one of the factors that has limited the standards adoption up to now. An additional advantage that HaLow has is its interoperability with other Wi-Fi protocols and support for Wi-Fi-grade security (WPA3), although this has also not been sufficient to drive a high adoption rate, despite the fact that Wi-Fi HaLow devices have been available for half a decade at this point.

Australia-based Morse Micro was a relative early mover in the 802.11ah space, founded in 2016—5 years before the protocol’s official release by the Wi-Fi Alliance. Wi-Fi industry veterans Michael De Nil (who played a key role in developing Wi-Fi chips used in smartphones at IMEC and Broadcom), and Andrew Terry (who led the design of smartphone Wi-Fi radios at Wolfson, Dialog, and also Broadcom) established Morse Micro, and after several years of development, the company’s first chipsets, the MM6108 and MM6104, were released to developers in 2021. Both come in a QFN48 package, offer programmable operation between 850 MHz and 950 MHz, and can connect up to 8,191 devices simultaneously, with the major differentiation being that the MM6104 allows transmission in channels of 1, 2, and 4 MHz with data rates up to 15 Mbps, while the MM6108 also supports 8 MHz and data rates of 32.5 MHz. These characteristics make the former more suited to European markets, where power requirements and bandwidth limitations are stricter, whereas the latter is better positioned for expansive homes in the United States and Australasia, where there are fewer restrictions on power usage, alongside greater bandwidth allocations.

Given the limited adoption of Wi-Fi HaLow, thus far, the size of the US$94 million Series B funding secured by Morse Micro represents an expression of renewed confidence in the technology. This figure dwarfs the cumulative US$20 million previously raised by Morse Micro (almost half of which came through the US$8.5 million raised in Series A funding round 2 years ago). The funding round was led by Japanese fabless company MegaChips Corporation, alongside an assortment of other investors, including Blackbird Ventures, Main Sequence Ventures, Clean Energy Finance Corporation, Skip Capital, Uniseed, Spring Capital, and even the former prime minister of Australia, Malcolm Turnbull (who has reemerged as a technology investor and cybersecurity consultant after retiring from politics several years ago). MegaChips’ role is key to the deal, as the company will not only step in to manufacture Morse Micro’s chipsets, but will also provide quality assurance, sales support, and additional distribution channels. Yet the securing of Series B funding was not the only reason for Morse Micro to celebrate in August, as only several days after the sealing of the deal, the Federal Communications Commission (FCC) announced its certification of the company’s fully integrated Wi-Fi HaLow Module, the MM6108-MF08251, which contains the Wi-Fi HaLow SoC MM6108.

The fact that one of the largest outside investments in Wi-Fi chipset technology in recent years has been directed at Wi-Fi HaLow is an encouraging sign for the technology, and suggests that investors have confidence in Morse Micro’s vision. The company itself has signaled that it intends to use the capital raised to expand the company by 25% and fund new chip designs, which will provide a welcome boost to output and product diversity. The MegaChips partnership is also hugely significant, as it will help accelerate the go-to-market strategy of Wi-Fi HaLow chips and modules, and will provide the company with a gateway into the Asian market. However, it should be noted that there are several challenges that the technology must overcome before more widespread adoption, and, even then, the opportunities for the technology remain constrained to select use cases in which the technology’s unique features can be best leveraged.

One of the core hurdles HaLow faces in the residential market is a classic case of the chicken and egg dilemma. As long as the technology is not embedded into access points, device vendors will not be sufficiently incentivized to implement the technology in end node devices. And by this same logic, infrastructure vendors will be resistant to adopt HaLow into access points while end node devices aren’t equipped with the technology. To address this conundrum, Morse Micro has been working with Internet Service Providers (ISPs) in order to increase the integration of HaLow into consumer wireless infrastructure, but with limited success so far. Part of the issue is that Wi-Fi HaLow is not a transformative technology that will displace other low-power connectivity technologies in the home, but rather is a technology that can only offer significant advantages over competitors in a select range of use cases. Essentially, it is a technology with a clearly defined, but narrow niche. The applications where Wi-Fi HaLow has the most to offer are those in which it can supplant cellular wireless backhaul when both long ranges and relatively high throughputs are necessary. Examples here include conducting diagnostics or delivering firmware updates to automobiles parked in garages, or providing backhaul connectivity to areas of large residences (e.g., guesthouses or barns) where a cellular connection would have otherwise been required. Acknowledging the limited applications of the technology, equipment vendors and ISPs looking to deploy Wi-Fi HaLow enabled equipment should seek to target their solutions at those specific use cases. For example, equipment vendors could incorporate HaLow into mesh nodes, which could project connectivity to IoT devices outside the network’s range, branding the solution as an enhanced version of mesh designed for sprawling residences. As for ISPs, they could look to offer HaLow as part of their packages tailored to residents of large homes, an approach that would help differentiate their products in an increasingly competitive environment.

While residential applications for 802.11ah are somewhat restricted, the standard has broader applications in the industrial realm, where facilities will be keen to harness the long-range, high-throughput potential of HaLow, alongside Wi-Fi features, such as Resource Allocation Windowing (RAW) and Target Wake Time (TWT). Indicative of the potential, a range of vendors are active in this market segment. Newracom is another Wi-Fi HaLow chipset vendor with a selection that includes the industry’s first, the NRC7292, introduced in 2018. These chipsets are used by Japanese wireless connectivity vendor Silex, which provides a complete Wi-Fi HaLow infrastructure ecosystem for industrial applications, including the SX-NEWAH 802.11ah module (the first to be FCC-certified), the AP-100AH access point (capable of 675 simultaneous connections up to a 3 km range), and the BR-100AH (a bridge to transform Ethernet devices into Wi-Fi HaLow clients). Palma Ceia also offers the Wi-Fi HaLow PCS2100 IoT STA/Client, and the PCS2500 modem chip designed for access points.

With the groundwork laid for 802.11ah in the industrial space, it is now vital that regulators and industry bodies act to enable and promote its use. The former group can help raise confidence in the technology by conducting large-scale industrial trials of HaLow, which can demonstrate the advantages of the technology relative to the competition in various scenarios. They should also work to convince regulators of the advantages of spectrum harmonization. As discussed above, there is currently significant regional variation in the power and bandwidth limitations applying to Wi-Fi HaLow, which limits the adoption of the technology in key markets. For example, the European Union (EU), the United Kingdom, and India have some of the most restrictive regulations, with just 25 Milliwatts (mW) of power and 1 MHz channels. In contrast, the United States and Canada have the most supporting regulations, with 1 Watt (W) of power and up to 16 MHz channels. This disparity means that the data rates currently possible in Europe are less than half of those available in the United States and Canada. Other markets face various different regulatory approaches toward the standard, most of which are unaligned (South Korea 10 mW with up to 4 MHz channels and Singapore 500 mW, but just 2 MHz channels). Therefore, in order to ensure that other regions are also able to benefit from HaLow’s full potential, and so that the industry as a whole can benefit from economies of scale, it is vital that regulators coordinate to realize greater spectrum and power harmonization for Wi-Fi HaLow globally.