As semiconductor manufacturers, such as industry leaders Samsung, Qualcomm and Huawei, begin production of new 5G chips and introduce their new 5G devices, the race to lead 5G is heating up. 5G smartphone shipments are already forecasted to reach 5 million by the end of 2019 with much anticipation for the number to increase to 1 billion by the end of 2025. Additionally, electronics suppliers in Taiwan believe 2020 will be the year when many consumers will begin to switch over to 5G devices.
Overall, the increasing demand for 5G devices will ultimately stimulate the global electronics industry’s growth in many aspects. Specifically, a chipset is one of the key electronic components commonly found in smartphones and computers. A chipset is defined as “a group of interdependent motherboard chips or integrated circuits that control the flow of data and instructions between the central processing unit (CPU) or microprocessor and external devices”. Chipsets are essential to electronic devices as they define the device’s platform and features they can support.
Considering the vast difference between 4G/LTE and 5G networks, all 5G devices ultimately require redesigned chipsets. According to Allied Market Research, the global 5G chipset market size is estimated to reach US $2,120 million in 2020 and is projected to reach US $22,929 million by 2026, maintaining a CAGR of 48.7% from 2020 to 2026. Some recent 5G chipset developments include Qualcomm’s release of its second-generation 5G New Radio (NR) modem, the Snapdragon X55 5G modem and Samsung has reportedly started mass production of its own 5G chipset, the Exynos Modem 5100. Additionally, Huawei’s new Balong 5G01 and Balong 5000 modems offer complete 5G solutions for multiple applications while Mediatek’s newly released Helio M70 is a 5G modem supporting wireless networks ranging from 2G to 5G.
As OEM companies gear up for hefty 5G competition, more than twenty 5G smartphone designs are currently in the development stage and some have already showed up in the consumer market. These phones include Samsung’s Galaxy S10 5G, Huawei’s Mate X, Xiaomi’s 5G Mi MIX 3, Oppo’s Reno 5G, and LG’s V50 ThinQ, all of which require redesigned printed circuit boards (PCBs) and additional electronic components to support connectivity to the 5G network. For example, PCBs for 5G devices need more layers and advanced materials than standard PCBs, and typically requires 128 to 192 units of antennas whereas a 4G PCB only needs 64 to 96 units. Ultimately, the widespread commercialization of 5G over the next few years will create huge demand for electronic components and more opportunities for the global electronics industry.
Sidestepping the seemingly temporary “trade war” between China and the U.S., the demand for 5G is continually increasing. As a result, supply shortages and logistic challenges are now requiring more far-reaching strategic planning when searching for 5G chipsets and electronic components. In today’s dynamic trade environment, it is critical for OEMs and EMS companies to work with trusted and resourceful supply chain partners, such as Advanced MP Technology, to stay informed with the changing market condition and to benefit from their global inventory market knowledge and forward-thinking resources.