Global 5G Chipset Market is Estimated to Witness High Growth Owing to Rapid Adoption of 5G Connectivity and Growing Demand for High-Speed Internet
The Global 5G Chipset Market is estimated to be valued at US$ 32.05 Bn in 2024 and exhibit a CAGR of 19% over the forecast period 2024-2031. With growing need for low-latency connections and increasing demand for high-speed data services, the 5G chipset market is projected to grow significantly. Furthermore, increasing investments by government and telecom operators to develop 5G infrastructure will also positively impact market growth.
Market Dynamics:
Rapid deployment of 5G networks across major markets and growing adoption of Internet of Things (IoT) applications are some of the key factors driving the growth of the global 5G chipset market. 5G technology enables connectivity between a large number of devices and offers capabilities like higher data speeds, lower latency and enhanced coverage. This makes 5G suitable for applications requiring real-time connectivity like autonomous driving, AR/VR and cloud gaming. Additionally, increasing production of smartphones and other smart devices integrating 5G modems is also expected to boost demand for 5G chipsets during the forecast period. While high research and development costs associated with 5G technology and infrastructure upgradation challenges in some regions can hinder the market growth.
Increasing Adoption of 5G-enabled Smartphones is Driving the 5G Chipset Market Growth
The rollout of 5G networks around the world is enabling smartphone manufacturers to launch 5G compatible devices. As 5G provides significantly higher speeds and lower latency compared to 4G, consumers are upgrading to the latest smartphones to take advantage of the improved connectivity. Major smartphone brands like Samsung, Huawei, Apple, and Xiaomi have introduced affordable 5G handsets over the past year, making the technology accessible to mainstream users. As the adoption of 5G smartphones increases, it will drive higher demand for 5G chipsets from manufacturers. This widespread availability of affordable 5G devices is a major factor propelling growth of the 5G chipset market.
Growing Deployment of 5G Networks by Telecom Operators is Fueling Chipset Sales
Leading telecom operators across regions are heavily investing in deploying 5G infrastructure to modernize their networks and offer high-speed connectivity services. 5G provides not only faster data transfers but also enables new applications like augmented/virtual reality, autonomous vehicles, IoT and industrial use cases. To capitalize on these opportunities, telecom companies are launching 5G services and expanding their network coverage. As more territory is covered by 5G networks, it motivates users to upgrade to 5G-capable plans and devices. This growing deployment of 5G networks globally acts as another key driver for increased demand of 5G chipsets from infrastructure equipment manufacturers.
High Research and Development Costs of 5G Chipsets can Restrain Market Growth
Developing cutting-edge 5G chipsets involves substantial investments in R&D over several years. These chipsets integrate complex semiconductor architectures with multiple components like modem, transceiver, RF chip, etc. manufactured using modern advanced process nodes of 7nm and below. The high costs associated with developing these advanced 5G chipsets and bringing them to mass production is a barrier for smaller players. In addition, 5G networks operate at high frequencies that require more base stations for coverage creating additional costs. These high development expenditures associated with 5G can limit startups and restrain faster growth of the overall 5G chipset market.
Manufacturing Challenges of Smaller Process Nodes Can Cause Delayed Availability of 5G Chipsets
Leading-edge 5G chipsets demand manufacture using smaller FinFET process technologies like 5nm and 3nm to accommodate hundreds of millions of transistors. However, chip foundries are facing major challenges in implementing these advanced process nodes due to issues such as low yields, defect rates and electromigration effects. Manufacturing problems can result in delays to ramp up production or higher chip costs. This in turn leads to supply constraints of 5G chipsets especially during the initial years of commercialization and rollout of 5G networks. Limited availability of 5G SoCs manufactured on the latest nodes acts as a restraint for telecom operators and device makers trying to expand 5G services and products.
Increasing Demand for FWA Applications Presents a Big Opportunity
5G fixed wireless access (FWA) is emerging as a popular alternative to wired broadband connections in both developed and developing markets. It provides high-speed internet to homes and offices without requiring fiber to be laid. During the pandemic, remote work and online learning has boosted the demand for reliable home networks. 5G with its ability to deliver multi-Gbps speeds over wireless backhaul is filling this need. Telecom companies are aggressively promoting FWA plans and the subscriber base is growing fast. This rising adoption of 5G for broadband and wireless backhaul will stimulate more chipset sales to telecom equipment makers.
Expanding Industrial and Enterprise 5G Use Cases will Spur Chipset Sales
Beyond consumer applications, 5G has the potential to transform industries by enabling new IoT use cases such as robotics, asset tracking, automation, predictive maintenance using AI/ML, video analytics and more. Several industries are experimenting with private 5G networks within manufacturing facilities, ports and mines. As test deployments deliver results, more companies will adopt 5G based IIoT solutions driving the need for chipsets in gateways, routers and sensors. Increased investments by enterprises in specialized 5G applications and networks present a lucrative opportunity for semiconductor vendors and chipset manufacturers over the coming years.
Link - https://www.coherentmarketinsights.com/market-insight/5g-chipset-market-5155
Key Developments:
- In November 2023, MediaTek, a leading Taiwanese fabless semiconductor company known for its cutting-edge chip solutions, introduced the Dimensity 8300 5G chipset, which includes generative AI capabilities. Utilizing TSMC's second-generation 4nm process, the chipset boasts an octa-core CPU with four Arm Cortex-A715 cores and four Cortex-A510 cores based on Arm's v9 architecture, along with the Mali-G615 MC6 GPU. Designed to elevate the premium smartphone market, the Dimensity 8300 offers users advanced AI features, ultra-realistic entertainment experiences, and seamless connectivity.
- In November 2023, Viettel High Tech, the research and development division of the Vietnamese telecommunications leader Viettel, introduced its proprietary 5G chipset. This cutting-edge 5G DFE (digital front end) chip can execute an extraordinary 1 quadrillion calculations per second, representing a major achievement in the company's goal to create a self-reliant 5G infrastructure in Vietnam.
- In September 2023, Qualcomm, a prominent designer of modem chips for mobile devices, revealed an extension of its partnership with Apple to supply 5G chips for iPhones through at least 2026. This multi-billion dollar agreement ensures stability for Apple's global supply chain as the tech giant faces heightened challenges in the Chinese market and delays in the rollout of its own 5G modem technology.
- In July 2023, Intel, a major semiconductor manufacturer, unveiled a strategic partnership with Ericsson, a leading telecommunications company, to develop custom 5G system-on-chips (SoCs) for Ericsson's telecom networking equipment. Leveraging Intel's advanced "18A" process technology, this collaboration represents a key step in their joint efforts to advance next-generation, optimized 5G infrastructure. The partnership is set to boost Ericsson's ability to provide efficient and robust 5G solutions.
- In May 2023, MediaTek, a prominent Taiwanese fabless semiconductor firm, introduced its new Dimensity 9200+ 5G chipset, designed specifically for premium smartphones. This advanced chipset, built on TSMC's second-generation 4nm process, features an octa-core setup with one ultra-core Arm Cortex-X3 processor reaching up to 3.35GHz, three Arm Cortex-A715 super-cores operating at up to 3.0GHz, and four Arm Cortex-A510 efficiency cores running at 2.0GHz, complemented by the Arm Immortalis-G715 GPU. Smartphones equipped with the MediaTek Dimensity 9200+ are expected to hit the market in May 2023, promising superior performance and efficiency for high-end mobile devices.
Key Players:
Altiostar, Analog Devices, Inc., Anokiwave, Inc., Broadcom Inc., Huawei Technologies Co., Ltd., Infineon Technologies AG, Intel Corporation, Marvell Technology Group Ltd., MediaTek Inc., Nokia, Qualcomm Technologies, Inc., Qorvo, Inc., Renesas Electronics Corporation, Samsung Electronics Co., Ltd., and Texas Instruments Incorporated
