The Invisible Layer

Some of the most strategically important hardware in the world is also the most invisible. Inside billions of connected devices, smart meters, vehicles, asset trackers, payment terminals, sits a small cellular module, the radio that puts the thing on the network. China dominates the making of them.

The leader is Quectel, the world’s largest cellular IoT module maker, with around 31% of the market by revenue in early 2024.^[1] Behind it sit Fibocom and China Mobile, and together the three Chinese firms hold more than half the global market; China as a whole accounts for roughly 54% of module revenue.^[1][2] Among the top five vendors by shipments, four are Chinese.^[1]

Whoever makes the radio inside a billion devices sits at the connection point of the connected world. That is a chokepoint, and everyone now knows it.

The chokepoint no one saw

The dominance matters because of where these modules sit: at the connection point of critical infrastructure, from utility grids to fleets of vehicles. That is precisely why they have become a security flashpoint. In 2023 the bipartisan US House Select Committee on the CCP formally asked the FCC to add Quectel and Fibocom to its Covered List, and the FCC chair called the modules a national-security risk, warning they could enable remote data exfiltration or even remote shutdown of the devices they sit in.^[4]

One honest caveat on status. As of the latest reporting, these were referrals and requests, not a finalised ban; Quectel and Fibocom are under active US scrutiny and proposed for blacklisting, not yet formally barred. And exact share figures vary by whether you count revenue or shipments, so cite the metric.

Reading it as an investor

The IoT module is the clearest example of a Chinese chokepoint hiding in plain sight, a low-margin, unglamorous component that nonetheless sits inside the connective tissue of the physical internet. That combination of deep market control and strategic sensitivity is exactly what draws regulatory fire, so the sector carries the same double signal as drones: genuine, hard-won dominance on one side, mounting Western market-access risk on the other. We track the module makers not for their margins but for their position; whoever controls the radio inside a billion devices holds leverage far out of proportion to the component’s price, and Washington’s scrutiny is the proof of it.