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5G Chip Makers Expect Smartphone Demand to Exceed Expectations November 25, 2019 TSMC expects 300 million 5G smartphone shipments for 2020. Qualcomm forecasted 200 million units. TSMC’s positivity is apparently fueled by the orders it has received from chip clients. Demand is strong that the foundry’s 7nm nodes have apparently been running at full capacity. Qualcomm Inc expects global smartphone makers to ship 450 million 5G handsets in 2021 and another 750 million in 2022. Qualcomm said 5G adoption will be faster than 4G due to the timing of commercialization of the technology in China and availability of chipsets across different price tiers. With most 5G indicators taking a jump in October, November indicator gains were a bit more sedate, with relatively small m/m gains in device counts, which are expected to continue through year-end. In February of next year, 5G smartphone count is expected to increase ahead or during Mobile World Congress, which takes place on February 24, almost a month after the Chinese New Year holiday. China has officially opened 5G to consumers and a wide variety of 5G oriented devices are expected to be shown at CES and a proliferation of 5G related announcements would make 1Q a strong quarter for 5G device announcements. The US still lags in 5G deployments, especially given the different frequencies being used by US carriers, while smaller countries have been able to adopt narrower standards. |
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Figure 1: Total and 5G Smartphone Shipment Forecast
Source: Qualcomm, Mizuho, OLED-A
To date, ~66% of 5G devices support Sub 6 and 34% support mmWave, while 28% support both. The spectrum is divided into a large number of frequency bands, which must also be supported by 5G devices. Currently almost 40 of announced 5G devices support the n78 band, which has the greatest support, followed by three other relatively popular bands. After that device frequency support drops off quickly. As transceivers and antenna systems in these devices get more sophisticated (and smaller), frequency support will become a much smaller issue.
Figure 2: 5G Ecosystem - Primary Indicator
Figure 2: 5G Ecosystem - Primary Indicator
Source: SCMR LLC, GSA.com
5G ramping faster than previous wireless generations: 5G offers gigabit speeds, ultra-low latency, and greatly improved network capacity. 5G technologies are expected to create compelling new business opportunities including virtual & augmented reality, autonomous driving, industrial IoT, smart cities, and more, and could drive innovation and interesting new business models. The transition to 5G is ramping faster than global networks transitioned to 4G and any other previous wireless generations. There are now roughly 40 OEMs and nearly 40 operators launching or announcing 5G products and commercial service.
Ericsson, Nokia, and Huawei likely to maintain dominant RAN market share for 5G networks: 5G networks will require a strong underlying 4G layer, and leading wireless infrastructure 4G OEMs should also enjoy strong 5G share. With Nokia, Ericsson, and Huawei capturing roughly 80% of 4G market share, these three OEMs are well positioned for 5G and with Huawei potentially banned from certain markets given national security concerns, Nokia and Ericsson are positioned to benefit outside of China. However, with China comprising roughly 60% of global 4G and anticipated 5G base stations, Huawei should still enjoy strong scale and 5G share.
5G drives dollar content gains for Qualcomm, Qorvo, and Skyworks: Despite expectations for flattish ongoing global smartphone sales due to consumers holding smartphones longer along with high global penetration rates, the increasing mix shift to 5G smartphones should enable Qualcomm, Qorvo, and Skyworks to grow faster than the smartphone market. Qualcomm anticipates its dollar content in a like-for-like 5G smartphone versus a 4G smartphone or a similar price-tiered 5G smartphone versus a similar 4G smartphone is 1.5x greater. This content increase is driven by both the more expensive 5G baseband and increased RF content for Qualcomm. Given the complexity of 5G smartphones, increased 4G RF content as Chinese OEMs move to more fully integrated 4G solutions in order to reduce Inseego represents a unique small-cap stock well positioned to benefit from 5G rollouts. While Inseego the RF footprint and lower complexity in 5G smartphones are anticipated.
Device OEMs should also benefit from 5G: Inssego launched the industry’s first 5G mobile hotspot with its 5G MiFi M1000 at Verizon and next generation MiFi products with Qualcomm’s X55 modems will mark the inflection point for Inseego’s ramping global 5G sales. 5G could spur a strong iPhone replacement cycle that should benefit Apple.
From: Canaccord Genuity
Ericsson, Nokia, and Huawei likely to maintain dominant RAN market share for 5G networks: 5G networks will require a strong underlying 4G layer, and leading wireless infrastructure 4G OEMs should also enjoy strong 5G share. With Nokia, Ericsson, and Huawei capturing roughly 80% of 4G market share, these three OEMs are well positioned for 5G and with Huawei potentially banned from certain markets given national security concerns, Nokia and Ericsson are positioned to benefit outside of China. However, with China comprising roughly 60% of global 4G and anticipated 5G base stations, Huawei should still enjoy strong scale and 5G share.
5G drives dollar content gains for Qualcomm, Qorvo, and Skyworks: Despite expectations for flattish ongoing global smartphone sales due to consumers holding smartphones longer along with high global penetration rates, the increasing mix shift to 5G smartphones should enable Qualcomm, Qorvo, and Skyworks to grow faster than the smartphone market. Qualcomm anticipates its dollar content in a like-for-like 5G smartphone versus a 4G smartphone or a similar price-tiered 5G smartphone versus a similar 4G smartphone is 1.5x greater. This content increase is driven by both the more expensive 5G baseband and increased RF content for Qualcomm. Given the complexity of 5G smartphones, increased 4G RF content as Chinese OEMs move to more fully integrated 4G solutions in order to reduce Inseego represents a unique small-cap stock well positioned to benefit from 5G rollouts. While Inseego the RF footprint and lower complexity in 5G smartphones are anticipated.
Device OEMs should also benefit from 5G: Inssego launched the industry’s first 5G mobile hotspot with its 5G MiFi M1000 at Verizon and next generation MiFi products with Qualcomm’s X55 modems will mark the inflection point for Inseego’s ramping global 5G sales. 5G could spur a strong iPhone replacement cycle that should benefit Apple.
From: Canaccord Genuity
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