Sequans receives EUR 11 mln grant in France for 5G RedCap chip for IoT applications

Sequans Communications said that it has secured a EUR 10.9 million public grant in France to create a new chip for massive IoT applications that supports 5G NR eRedCap (5G new radio enhanced reduced capability). This product will meet the requirements of the 3GPP standard defined in Release 18, said the company, noting that it will also be backward compatible with existing 4G networks. The funding for this R&D project comes from the ‘France 2030’ investment programme operated by public investment bank Bpifrance.

The new funding follows the release earlier this month of Sequans’ preliminary financial results for 2023. The company said that it expects to achieve sequential growth in revenues in all four quarters of the current year. 

The company reported a turnover of USD 4.8 million for the three months to December, down 70 percent from USD 15.9 million in Q4 2022. It is now targeting revenues of over USD 7 million and a gross margin rate greater than 60 percent for Q1 2024, after reporting a rate of 12.2 percent in Q4 2023 and 78.5 percent in Q1 2023.

For the whole of 2023, revenues nearly halved to USD 33.6 million, from USD 60.6 million in 2022. Over the same period, the operating loss widened to USD 30 million from a comparable loss of USD 3.8 million.

Sequans CEO Georges Karam mentioned that the company’s board was actively engaging with multiple partners to explore various alternatives on the strategic front. This follows the collapse of the planned takeover by Renesas, which abandoned the acquisition of Sequans at the end of February after an adverse tax ruling.