August 29, 2022 – Ottawa, Canada – Edgewater Wireless Systems Inc. (TSXV: YFI) (OTC: KPIFF), the industry leader in Wi-Fi Spectrum Slicing technology for residential and enterprise markets, is pleased to announce its financial and operational results for the Fiscal Year ending April 30, 2022, which are available on SEDAR (www.SEDAR.com).
“During Fiscal Year 2022, we continued our focus on the residential Wi-Fi market, deepening our collaboration with a major Tier 1 Service provider and strengthening our products. Building on the successful PoC, we proved the superior real-world performance of our ‘beta’ Spectrum Slicing silicon in a demanding Pilot,” said Andrew Skafel, President and CEO of Edgewater. “Delivering on our promise to on-shore silicon production, we’ve solidified our relationship with CMC Microsystems and established access to GlobalFoundries — the largest foundry owned and operated in North America.”
Fiscal Year 2022 Highlights:
- Building on the successful, large-scale Proof of Concept (PoC), where we clearly identified a significant market opportunity for Spectrum Slicing in 75% of all homes, our engagement with a major Tier 1 Service Provider progressed to a Pilot at a globally renowned test facility. The performance of our ‘beta’ silicon solutions in the Pilot was impressive and mirrored the PoC results while significantly lowering latency for all devices. Discussions are moving from technical to implementation and commercial in nature.
- Revenue in FY 2022 was $11,193 from sales of lab system and Wi-Fi Spectrum Slicing development kit purchases.
- Net loss for FY 2022 was $1,057,599, compared to a net loss of $773,447 for FY 2021
- In the reporting period, the Company made a significant pre-payment to a global semiconductor supplier to secure design optimization and production of the next generation of silicon solutions.
Fiscal Year 2022 Results and Accomplishments:
Key results and accomplishments for Fiscal Year 2022 include:
Completed: Proof of Concept with Major Tier 1 Service Provider
The first residential Proof of Concept (PoC) with a major Tier 1 Service Provider focused on 6-million devices in 750,000 homes and clearly demonstrated the global market opportunity for Edgewater’s Spectrum Slicing in the home. Results from the PoC illustrated a 7 to 18 times performance gain in 75% of homes surveyed. An in-depth, analysis of the individual gateways/access points and connected devices clearly showed all 2.4 GHz radios were limited to using a single 20 MHz wide channel. 5GHz radios were limited to 40 MHz wide channels on average. Congestion and interference dramatically limit Wi-Fi performance in most homes.
Additionally, data highlighted that the PHY rate (physical maximum connection speed) declined with each device added — due to contention on the single channel — and, correspondingly, the total aggregate throughput declined.
Compared to the existing single-channel architecture, Edgewater used a 6-channel Spectrum Slicing configuration and equally divided the number of clients over the number of channels. The reduced contention resulted in increased performance in the home. For example, Edgewater’s current platform can deliver 3-channels in 2.4 GHz vs a single channel by ALL other silicon suppliers (3:1).
The results of the PoC demonstrated the residential market opportunity for Edgewater’s physical layer (PHY) Spectrum Slicing approach.
Completed: Pilot with a Major Tier 1 Service Provider
Building on the successful PoC, the major Tier 1 Service Provider requested a Pilot of our ‘beta’ silicon solution. Using a globally renowned independent test organization, the third party conducted extensive tests. Scenarios compared the current single-channel PHY architecture, offered by ALL today’s Wi-Fi systems up to and including Wi-Fi6E, to Edgewater’s patented, physical layer multi-channel Spectrum Slicing. Amid COVID restrictions, the test house applied rigorous testing to validate the impact of Spectrum Slicing in both commercial and residential applications.
Replicating scenarios seen in the 750,000 homes during the PoC independent tests that conclusively determined the powerful capabilities of Spectrum Slicing. Highlights include:
- An impressive 50% improvement in latency
- 6-12 times throughput gains for Residential Service Provider use cases from the PoC
- A globally renowned, independent test house conducted all tests under rigorous real-world scenarios.
Latency, or the time it takes for a packet to move from one point to another, is the most significant factor impacting Wi-Fi performance. Delays in packet delivery result in ‘jittery’ video, laggy gameplay and often dropped connections. On conclusion of the Pilot, the major Tier 1 and test organization were impressed with the reduction in latency and, at a recent industry forum, have highlighted the impressive improvement in latency as one of Edgewater’s key benefits.
With COVID restrictions easing worldwide, in-person engagements have resumed. Recent in-person discussions with the major Tier 1 Service Provider have progressed beyond the technical evaluations to implementation, unit costs and scale as they move into the next refresh cycle for their residential gateways.
Market Insights: Product Expansion Opportunities
Insights gained working hand-in-hand with a major Tier 1 Service Provider, and as part of the CableLabs family, have provided a deeper understanding of the technical and business challenges in the broader residential Wi-Fi market. Ongoing discussions and key learnings drive design revisions for Edgewater’s next-generation Spectrum Slicing silicon solutions, honing the Company’s focus and driving innovations. Understanding the limitations of the traditional, single-channel/link Wi-Fi approach in most homes gives Edgewater a clearly defined market opportunity where we have a competitive advantage. Capital will be required to capitalize on the identified opportunities.
From a technical perspective, recent discussions have highlighted a key competitive weakness in WiFi6E/WiFi7 implementations in the newly released 6 GHz band. Using the newly released spectrum (see FCC news release[i]) offers a relatively uncluttered frequency band and is a welcome addition to the existing 2.4 GHz and 5 GHz bands widely deployed globally. However, there is little separation, or space, between the upper 5 GHz band and the 6 GHz band, and as a result, the use of the 6 GHz band interferes significantly with the existing 5 GHz band. As a result, expensive filters are required on each 5 and 6 GHz antenna (i.e. 4×4 MIMO in 5 GHz requires four filters and 4×4 MIMO in 6 GHz requires another four filters for a total of 8 filters). Filters add significantly to hardware costs and complexity.
Edgewater’s IP and expertise in adjacent and co-channel interference mitigation (ACI/CCI) may eliminate the need for expensive filters. We are researching the engineering viability of using Edgewater IP to address the issue and, in the upcoming 6-12 months, are working to quantify the potential commercial opportunity.
As the commercial engagement with the major Tier 1 Service Provider progresses beyond the resource-heavy technical evaluations of the PoC and Pilot, we are broadening our customer prospects to include select OEMs and vendors. Like most major Tier 1’s, after specifying the technical and design requirements, the major Tier 1 Service Provider outsources the building of their residential gateways to global OEMs. With the support of the service provider and industry advocates, Edgewater will be working directly with the OEMs to broaden our funnel (OEMs work with several customers, from service providers to branded gear manufactures like Cisco). Equipment manufacturers, offer another channel to market. Edgewater is establishing a framework to have its products included in gateways, mesh nodes, access points and Wi-Fi software solution vendors in the market today.
Global Silicon Market Dynamics
The global semiconductor shortage has been well-documented and has continued into 2022. The pandemic’s arrival in early 2020 saw factory shutdowns. It resulted in a sharp rise in cancelled work orders, affecting just-in-time manufacturing and delivery practices and immediate decreases in silicon manufacturing output. At the same time, dramatic changes in the use of laptops, tablets, 5G phones, gaming equipment and other electronic devices due to work-from-home, online learning, and stay-at-home mandates significantly increased consumer demand for new computer equipment and mobile devices (and their requisite silicon chips). As lockdown subsided, manufacturing orders returned, and semiconductor companies could not keep up. The Semiconductor Industry Association (“SIA”) had projected that worldwide semiconductor sales for 2021 will show a 25.6% increase from 2020 totals as demand for silicon chips continues to outpace manufacturing capacity[ii].
Although fabrication plants ramped up production heading into 2021, order-to-delivery lead times for silicon wafers reached nearly eight months by the fall of 2021, compared to 1 to 1.5 months pre-pandemic. While the industry, backed by government initiatives to on-shore the semiconductor industry, has responded with the promise of more semiconductor production and, critically, domestic production in the future, the new fabs will not come on line for years. The current 2022 production capacity is generally fixed and unable to meet demand. However, the promise of more semiconductor production in the future offers Edgewater a great opportunity to scale alongside the growing production capacity.
Edgewater management continues to build alliances with several potential silicon partners to strengthen its move to capture the volume market for Spectrum Slicing. The ultimate goal is to create an ecosystem of world-class silicon partnerships to continue to move its strategic initiatives forward.
In Q2 2022, the Company entered into a Memorandum of Understanding (MOU) for technology sharing with CMC Microsystems, manager of Canada’s National Design Network© (CNDN). Under the agreement, Edgewater will provide CMC with access to their Spectrum Slicing Development Kit for IoT devices in residential and industrial applications. CMC will in-turn facilitate access to state-of-the-art design environments (CAD), prototype services (FAB) and equipment for device validation (LAB). CMC will also provide pre-fabrication support in the form of an independent design review and validation process using members of its pan-Canadian research network.The goal of this MOU is to accelerate the commercialization of Edgewater’s Spectrum Slicing silicon solutions for or use in massive IoT applications.
Building on the successful MOU, in March 2022, Edgewater announced the selection of CMC Microsystems[iii] as an on-shore fabrication services partner. Working with CMC Microsystems, Edgewater has access to GlobalFoundries, the largest silicon manufacturing foundry owned and operated in North America. The relationship provides the Company with low-cost access to multi-product and single-product wafer fabrication, quality assurance and production-related support.
In advance of government programs incentivizing on-shore silicon development, Edgewater initiated strategic steps to on-shore silicon development and commercialization of our next-generation Wi-Fi Spectrum Slicing silicon. The strategic initiative offers the Company more direct control of its silicon process and supply line, including critical design and quality assurance efforts. It provides closer access to North American foundries and gives the Company more direct control over silicon supply lines, including design and quality assurance. On-shoring the design and verification process will effectively allow complete domestic development in preparation for prototype manufacturing and lab validation of full-duplex Wi-Fi ASICs.
For further information, visit www.SEDAR.ca or www.edgewaterwirelesss.com
About Edgewater Wireless
We make Wi-Fi. Better.
Edgewater Wireless (www.edgewaterwireless.com) is the industry leader in innovative Spectrum Slicing technology for residential and commercial markets. We develop advanced Wi-Fi silicon solutions, Access Points, and IP licensing designed to meet the high-density and high quality-of-service needs of service providers and their customers. With 26 granted patents, Edgewater’s Multi-Channel, Single Radio (MCSR) technology revolutionizes Wi-Fi, delivering next-generation Wi-Fi today.
Edgewater’s physical layer Spectrum Slicing allows a frequency band to be divided, or sliced, to enable more radios to operate in a given area. Think of Spectrum Slicing like moving from a single-lane road to a multi-lane highway — regardless of Wi-Fi technology. The recently completed Proof of Concept (PoC) with a major Tier 1 Service Provider showed 7 to 18 times performance gains in 75% of homes surveyed. Interestingly, homes with the most devices saw the greatest improvements.
For more information, visit www.edgewaterwireless.com.
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Edgewater Wireless Contacts:
Andrew Skafel, President and CEO
Bill Mitoulas, Investor Relations
T: +1.416.479.9547
Forward-Looking Statements
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[i] FCC Opens 6 GHz band for Wi-Fi and other unlicensed uses:: https://www.fcc.gov/document/fcc-opens-6-ghz-band-wi-fi-and-other-unlicensed-uses
[ii] Source: https://www.eusemiconductors.eu/sites/default/files/ESIA_WSTS_AutumnForecast2021.pdf
[iii] CMC Microsystems: https://www.cmc.ca/about-us/