GCT Semiconductor Holding, Inc. Signs Strategic Definitive Agreement with European Tier One Telecommunications Supplier

Rhea-AI Summary

GCT Semiconductor Holding (NYSE: GCTS) has signed a definitive agreement with a European tier one wireless infrastructure provider to develop Fixed Wireless Access (FWA) technology using GCT's 5G solutions. This follows their MOU signing in August 2024 and builds on an existing customer relationship. The FWA devices launch is expected in H2 2025. According to the Ericsson Mobility Report, 5G FWA connections are projected to grow from ~30 million to ~280 million between 2023 and 2029, representing an 800% increase.

Positive

• Strategic partnership with European Tier One telecommunications supplier secured
• Product launch timeline established for H2 2025
• Building on existing customer relationship, indicating strong business continuity
• Positioning in high-growth market with projected 800% increase in 5G FWA connections by 2029

Negative

• None.

Insights

Technology Market Analyst

This strategic agreement marks a significant milestone in GCT's 5G market expansion. The partnership with a European tier-one telecom supplier validates GCT's technology and positions them favorably in the rapidly growing Fixed Wireless Access (FWA) market. The projected 800% growth in 5G FWA connections by 2029 represents a substantial market opportunity, expanding from 30 million to 280 million connections. The development partnership could provide GCT with a steady revenue stream and strengthen their competitive position against larger chipset manufacturers. The planned 2025 product launch timeline aligns well with the market's growth trajectory, though execution risks remain in the highly competitive semiconductor space.

Supply Chain Analyst

The formalization of this partnership through a definitive agreement, evolving from the previous MOU, demonstrates strong commercial traction. For a company with a market cap of 106.4M, securing a tier-one European telecom supplier represents a significant achievement and potential revenue catalyst. The FWA market's focus on underserved areas creates a unique opportunity for sustainable growth, potentially reducing dependency on traditional customer segments. However, investors should monitor the execution timeline closely, as semiconductor development cycles can face delays and cost overruns, particularly in complex 5G implementations.

The Agreement with European Tier One Supplier Further Accelerates GCT’s momentum in 5G chipset development with strategic partners

SAN JOSE, Calif.--(BUSINESS WIRE)-- GCT Semiconductor Holding Inc. (“GCT” or the “Company”) (NYSE: GCTS), a leading designer and supplier of advanced 5G and 4G semiconductor solutions, announced today the signing of a definitive agreement with a European tier one wireless infrastructure and terminal provider (the “Tier One Supplier”) to collaborate on the development of Fixed Wireless Access (“FWA”) technology using GCT’s 5G solutions including modem chipset and RFIC.

The Company previously announced the signing of an MOU with the Tier One Supplier in August 2024, a continuation of an existing key customer relationship now moving to 5G. GCT expects the launch of FWA devices related to this activity to commence in the second half of 2025.

“This collaboration is a major milestone and reinforces the momentum we are gaining in solidifying customer engagement and strengthening client relationships for growth as we prepare for our 5G chipset launch,” said John Schlaefer, CEO of GCT. “We look forward to working together on this significant partner’s 5G portfolio and high-performing FWA technology.”

The growing 5G FWA technology is a cost-effective alternative to traditional wired broadband options and offers reliable connectivity in remote or underserved areas. Based on the Ericsson Mobility Report (June 2024)*, the number of 5G FWA connections worldwide is projected to increase over 800% from the end of 2023 to the end of 2029, representing an increase from ~30 million connections to ~280 million connections. With its strong expertise in 5G chip development, GCT is fully prepared to take advantage of this growing market.

About GCT Semiconductor Holding, Inc.

GCT is a leading fabless designer and supplier of advanced 5G and 4G LTE semiconductor solutions. GCT’s market-proven solutions have enabled fast and reliable 4G LTE connectivity to numerous commercial devices such as CPEs, mobile hotspots, routers, M2M applications, smartphones, etc., for the world’s top wireless carriers. GCT’s system-on-chip solutions integrate radio frequency, baseband modem and digital signal processing functions, therefore offering complete 4G and 5G platform solutions with small form factors, low power consumption, high performance, high reliability, and cost-effectiveness. For more information, visit www.gctsemi.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1955. These forward-looking statements include, without limitation, statements regarding Tier One Supplier, FWA and 5G market opportunities and timing of launch of FWA devices. Words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company's control and are difficult to predict. Factors that may cause actual future events to differ materially from the expected results, include, but are not limited to: the ability of the Company to develop its 5G products and generate revenue; the ability of the Company to enter into and meet the obligations under partnership and collaboration agreements; the ability of the Company to grow and manage growth profitability and retain its key employees; the Company's financial and business performance, including the Company's financial projections and business metrics; changes in the Company's strategy, future operations, financial position, estimated revenues and losses, forecasts, projected costs, prospects and plans; the Company's inability to anticipate the future market demands and future needs of its customers; the impact of component shortages, suppliers' lack of production capacity, natural disasters or pandemics on the Company's sourcing operations and supply chain; the Company's future capital requirements and sources and uses of cash; the ability of the Company to raise sufficient capital to fund its operations; the ability to implement business plans, forecasts, and other expectations, including the growth of the 5G market; the risk that the Company may not be able to repay its debt; the risk of economic downturns that affects the Company's business operation and financial performance; the risk that the Company may not be able to develop and design its products acceptable to its customers; actual or potential conflicts of interest of the Company's management with its public stockholders; and other risks and uncertainties indicated from time to time in the Company's filings with SEC, including registration statements on Form S-1 and quarterly reports on Form 10-Q and those disclosures under the "Risk Factors" sections therein. The foregoing list of factors is not exhaustive. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

*Source: Ericsson Mobility Report June 2024 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241125186361/en/

• Investor relations website: investors.gctsemi.com
• Investor relations contact: Gateway Group, Matt Glover & Ralf Esper, GCT@gateway-grp.com
• Media contact: Sophie Heerinckx, sheerinckx@gctsemi.com

Source: GCT Semiconductor Holding Inc.

FAQ

What is the new partnership agreement announced by GCT Semiconductor (GCTS)?

GCT Semiconductor has signed a definitive agreement with a European tier one wireless infrastructure provider to develop Fixed Wireless Access (FWA) technology using GCT's 5G solutions.

When will GCT Semiconductor (GCTS) launch its FWA devices from the new partnership?

GCT Semiconductor expects to launch FWA devices related to this partnership in the second half of 2025.

What is the projected growth for 5G FWA connections according to the Ericsson report cited by GCTS?

According to the Ericsson Mobility Report (June 2024), 5G FWA connections are projected to grow by over 800% from ~30 million in 2023 to ~280 million by the end of 2029.