The global 5G chipset market size was valued at USD 21 billion in 2021. It is expected to reach USD 3,170 billion by 2030, growing at a CAGR of 87.2% during the forecast period (2022–2030).5G chipsets make it possible for smartphones, portable hotspots, Internet of Things devices, and an increasing number of notebook PCs with a mobile network capability to transmit 5G data packets.
5G mobile devices are expected to combine familiar sub-6 GHz bands with new MIMO antenna systems and high-frequency millimeter-wave (mm-wave) bands with highly focused beam-steering. As more countries obtain the requisite infrastructure to enable 5G to promote quicker data transfers and cloud technology, the requirement for 5G chipsets is predicted to soar, offering the tremendous market potential for the investigated market.
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Increasing Demand for High-Speed Internet and Broad Network Coverage with Decreased Latency and Power Consumption
The decline in the price of mobile devices has contributed to the increase in the total number of people using smartphones. It is anticipated that customers will spend a total of USD 92.1 billion on mobile applications worldwide this year. Further, more than three-quarters of these revenues are anticipated to be generated by mobile games, while 24% is expected to come from non-game apps. High-quality audio and video content has increased as well. Mobile smartphones have replaced other digital devices as the most popular means of consuming internet media, including running business apps, file sharing, live video streaming, and audio streaming. However, not all of these uses are fully supported by current LTE technologies.
Internet connection speeds on a 4G network typically range between 2 and 6 Mbps. The demand for speed beyond 10 Mbps owing to the high data-consuming smartphone applications, is increasing the focus on 5G. It is expected that 5G would provide an internet speed greater than 10 megabits per second. This has been a significant factor in the rise in popularity of 5G because it provides extremely high internet speeds, comprehensive coverage, and minimal latency. Such reasons drive the expansion of the market.
Growing Machine-To-Machine/IoT Connections
Massive machine-to-machine communications, also known as MMTC, are anticipated to be supported by 5G. Regarding data transmission, 5G can handle many connections, extremely high bandwidth, and extremely low latency. This technology is expected to play an essential enabling role in the Internet of Things industry in both upcoming and existing applications. Industrial Revolution 4.0 assists cellular connectivity throughout the industry due to the rise of IoT and machine-to-machine connections, which have been instrumental in driving market traction. The smart city revolution is a crucial factor driving the adoption of 5G. IoT and M2M (machine-to-machine) connectivity offer a wide range of sensors and M2M wireless devices that enhance a city's intelligence and connectivity. These factors have been instrumental in assisting the demand for 5G-based connectivity.
Aligning to this trend, Verizon confirmed Indianapolis as the final center for its coordinated multi-city introduction of 5G services in the second half of 2018. The company announced that combining 5G technologies and data analytics would enable municipal administrations to tackle congestion, crime, healthcare, pollution, education, and inequality. In total, 30 smart cities are expected to exist worldwide by 2025, with 50% of those cities being found in either North America or Europe. These actions are supported by international investments, which the OECD estimates will total around USD 1.8 trillion for all urban city infrastructure projects between 2010 and 2030. It is anticipated that it will create several growth prospects for 5G technology.
Fragmented Spectrum Allocation
Spectrum is anticipated to play a vital role in the development, operation, and roll-out of 5G. The fragmentation of the spectrum, expansion of bands, and diversity of licensing schemes are expected to be the consequences of the 5G spectrum. These consequences have raised significant concerns for vendors seeking to align spectrum requirements of future 5G products. However, the allocation of these frequencies does not present a practical and economical approach for carrier deployed networks in the traditional planned fashion. The use of microwave and mmWave bands require a different, consumer-led process to set up service. The restricted coverage area requires diverse spectrum licensing schemes. This is expected to create many concerns, particularly for applications looking for the same frequency band, which may lead to overload on a particular spectrum range. These challenges are expected to hinder the market for large-scale 5G deployment worldwide.
Increase in Demand for Mobile Data Services
Delivering necessary coverage high-speed broadband has been a challenging task for service providers. One of the most daunting concerns is the unpredictability of the soil composition while building broadband fiber infrastructure, as densely populated forests and tall trees can interfere with mobile wireless broadband connectivity. Further, according to the US Department of Transportation, the average cost of laying fiber is USD 27,000 per mile, making it the highest price for fixed broadband deployment. Fixed wireless was initially considered a costly and unreliable broadband delivery technology, as it was difficult to engineer and provided significantly slower service rates than FTTx alternatives. Since the technology's evolution, fixed wireless has become a supplementary access solution to fiber, allowing providers to deliver much higher broadband speeds than standard requirements.
Verizon expects its initial 5G fixed wireless broadband rollout to reach about 30 million US households and to begin offering these services in California. Similarly, AT&T and Charter desire to launch 5G fixed wireless broadband trials in a few American markets. Orange, Elisa, and telecom infrastructure company Arqiva perform 5G fixed wireless trials in Europe. Such trends illustrate the demand for 5G wireless broadband in the market.
The global 5G chipset market is segmented by chipset type, operational frequency, and end-user industry.
By Chipset Type, the global market is segmented into Application-specific Integrated Circuits (ASIC), Radio Frequency Integrated circuits (RFIC), Millimeter Wave Technology Chips, and Field-programmable Gate Array (FPGA).
Application-specific Integrated Circuits (ASIC) account for the largest market share and are expected to grow at a CAGR of 88.8% during the forecast period. Application Specific Integrated Circuits (ASIC) are ICs built for specific applications or purposes. Compared to several other chipsets or a standard logic integrated circuit, using an ASIC for 5G communications can improve speed. The circuit has no additional load from multitasking and does the one thing it is supposed to do exceptionally well. Some of the main benefits of ASIC technology are pushing many 5G chipset manufacturers to select this technology over others, including faster performance, higher density, and lower space requirements. Such benefits drive market growth.
By Operational Frequency, the global market is segmented into sub-6 GHz, between 26 and 39 GHz, and above 39 GHz.
Sub-6 GHz accounts for the largest market share and is expected to grow at a CAGR of 85.4% during the forecast period. Low bands below 1GHz are helpful due to their favorable radio wave propagation, as they provide coverage in remote areas and buildings. Mid-band parts between 1GHz and 7GHz are also likely to be allocated in many countries over the forecast period. Mid-bands within the 3.3GHz to the 5GHz range are likely to be available around 2020 and are seen as essential spectrum resources for terrestrial 5G access networks. It is anticipated that these bands and the amalgamated arrangements of these bands will be critical in the delivery of 5G coverage as well as the capacity for enhanced mobile broadband, the Internet of Things (IoT), industrial automation, and mission-critical business cases, as well as for services related to public protection and disaster relief (PPDR). These are all proposed applications, and the speed in the range of gigabytes is expected to drive the market commercially. Furthermore, the market is expecting exponential growth due to product roll-out from known vendors.
By End-User Industry, the global market is segmented into consumer electronics, industrial automation, automotive and transportation, energy and utilities, healthcare, retail, and other end-user industries.
Consumer electronics account for the largest market share and are expected to grow at a CAGR of 87.9% during the forecast period. One of the major global markets for 5G chipsets is the consumer electronics sector, which is also one of the fastest-growing sectors due to the increasing use of connected devices and technological innovation. Additionally, as a result of rising worldwide demand and the introduction of connected gadgets, shipments of consumer electronics are also expanding. Smartphone firms are investing significantly in 5G-enabled devices due to the growing investments in the 5G network and chipsets. It will increase the company's market share and assist in meeting the demand at this early stage.
For instance, recently, Apple bought a majority stake in Intel's smartphone modem business for USD 1 billion. With this acquisition, over 2,200 Intel employees are expected to join Apple. The acquisition is in line with Apple's move to produce its own 5G modems for its smartphones instead of relying on Qualcomm for the hardware. Such investments in the industry are expected to influence market growth further.
Asia-Pacific Dominates the Global Market
By Region, the global 5G chipset market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
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Asia-Pacific is the most significant shareholder of the global 5G chipset market and is expected to grow at a CAGR of 89.6% during the forecast period. Asia-Pacific is the fastest-growing region, owing to emerging nations such as China, Japan, and India. China, India, South Korea, Japan, and Australia are expected to be the major markets for 5G chipsets. The growing demand for broadband services from emerging countries in Asia is also estimated to expand the scope of the market studied. Most mobile cellular operators in these areas are investing more in their cellular coverage. Satellites are also helping to boost the penetration of cellular communication technologies in these locations so that improved performance and dependability are provided with cost-effective services. As a result, the research industry is a significant area for expansion.
North America is expected to grow at a CAGR of 87%, generating USD 145 billion during the forecast period. The 5G chipset market is predicted to grow strongly in North America. This region's supremacy is attributable mainly to the sector's rapid uptake of cutting-edge technology. Qualcomm, a leader in smartphone communications chips that produces 50% of all core baseband radio chips in smartphones, is based in the area. It is a significant player in the 5G chipset market and one of the leading American technological businesses. The 5G chipset market is predicted to see strong growth in North America, and this region's supremacy is attributable primarily to the sector's rapid uptake of cutting-edge technology. By the end of 2023, more than 48% of all mobile subscriptions in North America are expected to be for the 5G, which would fuel demand for 5G chipsets.
It is anticipated that the growth of 5G mobile subscriptions in Western Europe will provide significant opportunities for the 5G chipset market growth. This is due to the increasing investment by regional telecom players in 5G technology, multiple governments' initiatives to accelerate research and innovation in 5G technology, and growing demand for high-speed internet and broad coverage with reduced latency and power consumption. These factors are expected to drive the growth of the 5G chipset market.
List of key 5G chipset market suppliers profiled