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Consumer Electronics
China’s Espressif Finds Low-Cost Wi-Fi Chip Niche

Russ Arensman
17 June 2016

Two years ago, Shanghai-based Espressif Systems was a struggling Chinese fabless semiconductor company best known for designing chips for other clients. Its first two attempts to develop and sell its own products – Android tablet wireless networking chips – ended up as commercial failures.
Espressif’s fortunes improved significantly however, after the August, 2014 launch of its ESP8266 system-on-a-chip (SOC). Since then, the company has sold millions of these low-cost wi-fi networking chips, while attracting a devoted following among hobbyists and hackers. Adafruit, Arduino.org, SparkFun Electronics and other third-party suppliers have introduced dozens of ESP8266 circuit-board modules and development kits. Meantime, Espressif’s workforce has expanded from 20 to about 100, and it's engineers are putting the finishing touches on another, more powerful, wireless SOC – the ESP32 – to be launched in August.
Espressif’s popular ESP8266 chips add inexpensive Wi-Fi connections to a wide variety of products. Source: Espressif Systems
The ESP8266 is essentially a low-power microcontroller that allows users to add 802.11B, G and N wi-fi Internet connections to a wide array of electronic devices – from coffee makers and lamps to home thermostats. It combines a 32-bit Tensilica processor with antenna switches, power amplifier and other components onto a thumbnail-size chip, which has won praise for its performance and easy programming.
But what really caught users’ attention was the chip’s price-- as low as $1 each in moderate quantities. That has allowed circuit board makers to build and sell ready-to-use ESP8266-based wi-fi modules for as little as $5 – far less than the $10, $20 and even higher prices of modules from competitors such as Broadcom, Particle, Qualcomm and Texas Instruments.
“Nothing else comes even close to this pricing,” said Christian Kim, IHS Technology’s senior analyst for Internet of Things (IoT), connectivity and telecom electronics. “The $1 price point is really attractive for people to try a lot of different things,” he says, adding that low-cost Wi-Fi could turn out to be “the greatest thing that’s happened to the Internet of Things.”
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