Global 5G Chipset Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Global 5G Chipset Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The 5G chipset market is expected to register a CAGR of 25.3% during the forecast period. The 5G modem chipsets, in combination with service providers, largely serve and enhance the capabilities of three major applications – enhanced mobile broadband, ultra-reliable and low latency communications, and massive machine-type communications. The applications of this technology are expected to drive the demand for 5G chipsets during the forecast period.

Key Highlights

• The 5G chipsets are expected to be critical components in the deployment of 5G networks, which will soon be rolled out at a massive scale; smartphone OEMs and telecom players are rapidly gearing toward this shift. Major telecom service providers globally, are upgrading their network to 5G, which primarily relies on denser arrays of small antennas to provide ultra-high network and data speeds.
• The emergence of 5G is expected to expedite the use of connected devices in industries that are already pushing toward the fourth industrial revolution (Industry 4.0). Industry 4.0 is aiding cellular connectivity throughout the industry; through the rise of IoT and machine-to-machine connections, it is also instrumental in driving market traction. Several smart city projects and initiatives are ongoing across the world, and by 2025, it is expected that there will be around 30 global smart cities, and 50% of these are expected to be located in North America and Europe. These steps are supported by global investments, which, according to the OECD, are expected to amount to USD 1.8 trillion, between 2010 and 2030, in all the infrastructure projects in urban cities. This is one of the major factors fueling the demand for 5G chipsets, primarily owing to their application in smart city connectivity applications.
• Multiple telecom operators are acquiring spectrums to increase their 5G connection coverage. For instance, in March 2021, Verizon outlined its plans to expand 5G coverage using the spectrum obtained in the recent C-band auction. Verizon more than doubled the existing mid-band spectrum holdings in the auction, adding an average of 161 MHz of C-Band nationwide in the United States for USD 52.9 billion, including incentive payments and clearing costs. The company acquired between 140 and 200 MHz in every available market, including 60 MHz in the 46 markets that will be cleared first by satellite operators, where more than half of the US population lives. Such developments will increase the demand for the 5g chipset market.
• During the pandemic, the WFH setting is prepared for the extra technological benefits of 5G: in the Global Workplace Analytics (2020) survey, more than 80% of respondents stated that they had the technical skills and knowledge required for WFH, as well as easy and reliable access to company networks (presumably by both fixed-line and mobile means). This augurs well for the adoption of 5G’s eMBB services for WFH purposes.
• 3GPP has specified that 5G should offer voice or video communication services based on the IMS, i.e., the IMS must be deployed for 5G-to-3G SRVCC in 3GPP Release 16 or VoNR, EPS FB, VoeLTE, and RAT FB in 3GPP Release 15. Hence such upgrades are expected to increase the infrastructure cost, thereby challenging the market's growth. While every architecture has specific challenges, all of them need network readiness of the IP Multimedia Subsystem (IMS) within the carrier's network.

Key Market TrendsIndustrial Automation to Account for a Significant Share

• According to Zebra’s latest Manufacturing Vision Study, smart asset tracking solutions based on IoTand RFID are expected to overtake traditional, spreadsheet-based methods by 2022. A study by Industrial IoT (IIoT) company, Microsoft Corporation, established that 85% of companies have at least one IIoTuse case project. This number is likely to increase, as 94% of respondents said that they would implement IIoTstrategies by 2021. Such implementation of IOT will create aopportunity for the local and international 5G Chipsets firms to develop new products according to the requirement of customer.
• Further, according to Capgemini, three out of 10 automotive factories have been made smart in the past 18-24 months. Also, 80% of automotive manufacturers believe 5G would be key to their digital transformation over the next five years. For instance, Ericsson and Audi formed a partnership for the usage of 5G technologies during automotive production, with the car manufacturer working towards the smart factory. Ericsson and Audi are using the latter company's production lab in Gaimersheim, Germany, with simulated processes mirroring those used in its headquarters in Ingolstadt to run field trials such as wirelessly connected production robots working on the construction of a car body.​
• A significant trend impacting the market studied is the focus on smart manufacturing practices. According to the data from IBEF, the Government of India set an ambitious target of increasing manufacturing output contribution to 25% of Gross Domestic Product (GDP) by 2025, from 16% currently. The Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) Udyog Bharat 4.0 initiative aim to enhance awareness about Industry 4.0 within the Indian manufacturing industry and help stakeholders address challenges related to smart manufacturing.
• The Industry 4.0 revolution, or industrial internet of things (IIOT) is making a dent in the automotive, manufacturing, warehousing, and logistics sectors by leveraging smart machines and real-time analytics on data produced by dumb machines. However, automation created several challenges in these sectors. Expected operational improvements proved hard to match due to a lack of integration with the required hardware. For instance, automation contributes to just 1% of manufacturing GDP in India, compared to around 5% in developed countries. This stems from a gap in suitable technology available for adoption. Further, According to GSMA By 2025 the total number of consumer and industrial Internet of Things (IoT) connections in North America is forecast to grow to 5.4 billion
• 5G has garnered significant interest considering the promised benefits within industrial environments. Since 3GPP’s Release 16, key capabilities for enterprise 5G (such as 99.999% network availability and reliability, sub-10 milliseconds latencies, and the support for time-sensitive networking) has attracted the industrial players for digitization in the context of Industry 4.0, For example, ABB and Ericsson collaborated to realize Thailand’s Industry 4.0 ambition and facilitate future flexible production with automation systems and wireless communications. The focus areas include ABB’s Robotics & Discrete Automation, Industrial Automation, and Motion business areas and ABB Ability TM Platform Services. The collaboration would cover 5G enabled Augmented Reality Lenses for remote commissioning in manufacturing environments in addition to global NB-IoT connected motors and drives through Ericsson Communication Service Provider partners and its IoT-Accelerator platform.

North America to Account for the Largest Share

• North America is one of the significant regions for the growth of the market studied. The United States has been contributing to a majority ofthe market share in the region. The increase is driven by the demand from IoT, M2M Communications, mobile broadband, and other emerging applications. Also, the United States, being home to some of the most prominent players in the market and a pioneer in the adoption of 5G connections, is one of the primary factors expected to influence the growth of the market studied.
• 5G will account for more than half of total mobile connections in North America, according to the latest ‘Mobile Economy North America 2020’ report from GSMA Intelligence. Of the region’s forecasted 426 million mobile connections, 51% will be running on 5G networks by 2025. The report also suggests that the region will pass 340 million mobile subscribers by 2025.
• Furthermore, according to Cisco Annual Internet Report, in the United States, the average smartphone connection speed will be 81.1 Mbps by 2023, up from 19.2 Mbps in 2018, 4.2-fold growth (33% CAGR). Alongside 5G rollouts, operators are also pursuing ambitious network transformation strategies. Moreover, 18 global telecom and consumer device makers have also partnered with US-based Qualcomm for their 5G chipset.
• The US federal government has plans to build a centralized 5G wireless network across the United States by 2021. Recently, the White House also released its National Strategy to Secure 5G of the US, mainly focusing on upgrading and securing 5G infrastructure at home and abroad. The release of this strategy comes as the US is also reconciling potential threats from China and elsewhere that might already lurk in its telecommunications and 5G supply chain and as it has pushed its network operators not to use products from foreign companies, such as Huawei, which it believes might pose a severe risk to national security.​ This will drive the demand for 5g chipset in the region.
• New safety-sensitive applications, collectively known as V2X or Vehicle-to-Everything, will be made possible by 5G's enhanced throughput, dependability, availability, and decreased latency. In order to facilitate the convergence of various apps for urban, suburban, and highway driving circumstances, 5G Cellular V2X (C-V2X) offers a common wireless network. For instance, According to OICA, Over 288,000 heavy trucks were produced in the United States in 2021, an increase of about 20% compared to the 2020 production volume. The rise in vehicle production will create aopportunity for the studied market to grow.

Competitive Landscape

The 5G chipset market is moderately consolidated, with a considerable number of regional and global players. Innovation drives the market in the product offerings, and each vendor is investing in innovation.

• August 2022 - A second-generation 5G chip will be released by UNISOC, a well-known Chinese chip manufacturer, in the latter part of 2022 or the first half of 2023. Using extreme ultraviolet (EUV) technology, a crucial process for cutting-edge chipmaking, UNISOC had already started mass-producing 6nm 5G devices. UNISOC, which has three distinct types of 5G chips available on the market, will compete to establish itself in consumer electronics, IoT, EV electronics, smart displays, and the metaverse.
• May 2022 - The next generation of 5G smartphones will be powered by MediaTek's Dimensity1050 system-on-chip [SoC], the company's first mm-Wave 5G chipset, featuring seamless connection, displays, gaming, and power efficiency. Dimensity930 and HelioG99 are two more chipsets that were also introduced as part of the company's expansion of its 5G and gaming chipset families. The Dimensity1050, which is constructed using an octa-core CPU and the TSMC 6nm fabrication process, combines mm-Wave 5G with sub-6GHz to aid in network spectrum migration.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Please note: This publisher does offer titles that are created upon receipt of order. If you are purchasing a PDF Email Delivery option above, the report will take approximately 2 business days to prepare and deliver.