GCT Semiconductor Holding Inc. (NYSE:GCTS) saw its stock price move higher, gaining 8% in premarket trading on Thursday, following the announcement of a licensing agreement with a major satellite communications provider to incorporate GCT’s 5G and 4G chipsets into the satellite firm's user devices.
Under the terms of the deal, the satellite provider will be able to integrate GCT’s chipset portfolio across multiple user devices, enabling those devices to connect via both terrestrial networks and satellite links. The agreement also establishes a path for future chipset sales, with the partner set to use GCT’s newly released 5G chipset in direct-to-satellite applications.
GCT indicated that shipments of the 5G products that support this initiative could begin as early as the second half of this year. The company will provide access to its full chipset portfolio to enable the development of user equipment compatible with unified terrestrial-satellite connectivity.
John Schlaefer, chief executive officer of GCT, said the collaboration positions both companies at the forefront of emerging 5G-to-space networks that aim to deliver global coverage, including underserved regions, and intends to accelerate the industry’s move toward unified terrestrial-satellite networks.
The company highlighted its experience in non-terrestrial connectivity and referenced proprietary mode-switching capabilities as features that should allow devices using its chipsets to outperform the current generation of non-terrestrial equipment.
Implications for the market and device manufacturers include accelerated integration of chipsets that can operate across multiple network modalities and the potential for expanded addressable markets if the satellite provider scales its use of GCT’s 5G solution. For GCT, the agreement could translate into recurring business if the pathway to future chipset sales materializes as described.
While the announcement coincided with a notable premarket stock move, the timing for shipments and the extent of future sales depend on execution by both parties under the agreement.