eSIMs are the Missing Link for Chipset Manufacturers

The eSIM is radically transforming modern connectivity. It’s not just improving the devices we use, and the wider Internet of Things (IoT) but the processes through which they are created. 

An embedded SIM chip (eSIM) is soldered on to a device's motherboard during manufacturing. Users can then download a SIM profile as soon as they switch on. 

It's entirely rewritable, removing the need for a consumer to procure an external SIM card every time they want to change their network provider. With an embedded chip, all the internal elements of a device are self-contained and don't need to be removed, saving space and allowing for more durability and water-resistance. For the consumer, it's been nothing but good news. 

But before a device makes it that far, a long and complex process of manufacturing, software design, and industry cooperation must be completed. The production chain for something as small as a smartphone or a connected watch consists of multiple different elements, all of which are essential but largely separate. 

An Original Equipment Manufacturer (OEM) will design and assemble the final product, but SIM vendors, software designers, and chip foundries must also play their part.  

eSIMs & chipsets 

So how has the eSIM changed this? Two ways: by simplifying the production process, and by opening new channels of cooperation and collaboration between the disparate links of the connected device industry. 

One of the first links in the production chain for any 'smart' device is the chipset manufacturer. These are the companies that assemble the essential information processing systems (silicon-mounted chipsets) that OEMs need to make their devices function. For prior generations of devices, their role had always been essential but limited, until the advent of eSIM technology.  

In June 2018, Geneva-based STMicroelectronics became the first chipset manufacturer to gain GSMA-certification for eSIM integration. This meant they could sell chipsets with a rewritable eSIM built in. When an OEM purchased their chips for a device, that package now included instant connectivity. 

However, the eSIM didn't just simplify things for chipset manufacturers. It provided the basis for a whole new set of partnerships and increased relevance within the value chain. 

A new role to play 

Chipset companies are still able to sell their product to OEMs, who then decide how best to provision the connectivity in their devices. However, modern chipset manufacturers can also take on the connectivity question themselves by striking deals directly with SIM operating system (OS) providers and MNOs. 

By working with SIM OS providers and network operators, companies like STMicroelectronics now make their eSIM-enabled chipsets compatible with specific connectivity partners, giving them increased power within the connected device market.

Instead of losing their relevance as soon as chips were shipped to the OEM, deals made at these early stages now keep adding value all the way through to the consumer's experience. 

Network agility 

It’s been a concern for IoT professionals since the very first days of the industry that having a device locked to a specific network might deter users from picking that product.

The agility and network switching provided by eSIM technology has created a competitive marketplace where promoting certain 'preferred' networks is an industry standard. Device makers like Apple establish partnerships with specific connectivity providers, like when the Apple Watch 3 launched in the UK in 2017 it carried an embedded SIM chip only compatible with EE. Chipset manufacturers have been able to take the lead and enjoy the advantages that this brought them, and benefit from recurring revenue streams.

In every aspect of the production chain, the eSIM has given manufacturers new ways to simplify and streamline the process. Chipsets are now shipped to an OEM with the SIM OS and full connectivity already enabled, and are MNOs benefiting from cast-iron assurances that their services will are promoted in any device that carries their partners' chips. 

Industry bedrock

This has built dynamic connections between what were previously isolated sections of the value chain, creating a simpler, more effective structure within connected device production. For OEMs, SIM OS providers, MNOs and chipset manufacturers alike, the eSIM represents the new bedrock of the industry.

1GLOBAL IoT

Whether it's eSIM or IoT SIM cards, 1GLOBAL has helped dozens of companies develop sustainable, scalable, IoT infrastructures that prepare them for the current surge of connected device usage and mobile data demands.

1GLOBAL IoT solutions are specifically designed to be scalable and flexible, without compromising on security or performance. With a globally redundant core network, multilingual service teams, and full SGP.32 support, 1GLOBAL IoT delivers personalized solutions.

Find out more about how 1GLOBAL has helped make the industry what it is today or speak to our team directly to explore using 1GLOBAL solutions with your business.