The global 5G substrate materials market size was valued at USD 234.44 million in 2022. It is estimated to reach USD 1,633.66 million by 2031, growing at a CAGR of 24.1% during the forecast period (2023–2031).
Fifth Generation (5G) is the latest communication backbone enabling revolutionary industrial, medical, automotive, and defense applications. 5G has enormous benefits, such as improvement in speed (ten times that of 4G), latency (at least ten times lower than 4G), and density (supporting approximately one million Internet of Things (IoT) devices per square kilometer). The 5G technology will enhance the devices' overall security, reliability, quality of service, and efficiency.
An active antenna system is one of the main hardware materials required for 5G end-user applications. These active antenna systems solve the 5G difficulties of increased capacities through space diversity and localized beams employing massive multiple-input multiple-output (MIMO) technology, allowing for remote radio heads. 5G base stations and mobile devices utilize these MIMOs. Further, Printed circuit boards (PCB) composed of materials like Polytetrafluoroethylene (PTFE), Polyimide (PI), Liquid Crystal Polymer (LCP), ceramics, and glass are used to construct these antennas. Due to their low Dk, low Df, high moisture absorption, and inexpensive manufacturing costs, these materials find widespread application.
In the 5G world, the PCB substrate materials may be called building blocks of the 5G industry. There is a vast range of materials catering to the electronics industry. Still, only specific characteristics of materials make them suitable for operating and existing in the high-frequency radio frequency (RF) world of 5G. The key factors that play a crucial role in selecting materials for 5G equipment and infrastructure are its dielectric constant, dissipation factor, coefficient of thermal expansion, coefficient of dielectric coefficient, and thermal conductivity. These characteristics decide whether a material is suitable for 5G infrastructure.
With the growth in 5G systems and technology rollout, materials such as polymers and ceramics will be paramount in manufacturing 5G-specific devices. The demand for multiple-input multiple-output (MIMO) antennas placed at 5G base stations will drive the demand for materials with low dielectric constant, are cost-friendly, and improve antenna bandwidth and efficiency. Some companies working on advanced materials for 5G infrastructure are Dupont de Nemours, Inc., AGC Inc., and Rogers Corporation. This, in turn, drives market growth.
In the 5G network deployment race, countries are pushing toward advanced 5G plans and building a more comprehensive core network of base stations and equipment. Countries such as China, the U.S., Japan, and South Korea have made significant strides toward being 5 G-ready and are investing heavily in 5G development. China is one of the leading countries, excelling in various aspects of 5G deployment. This is mainly due to strategic planning by the government and its coordination with 5G-based industry players.
Telecommunication vendors are manufacturing 5G infrastructure components and getting full support from governments of different countries. The positive impacts of the 5G rollout on a nation's economic position incentivize various national governments to accelerate its deployment. For instance, the Chinese government has invested a bulk amount of USD 400 billion for 5G deployment in close coordination with 5G equipment manufacturers and technology providers. With the fast pace of 5G deployment, the demand for 5G substrate materials is expected to increase significantly in the global market.
The primary concern behind the growth of 5G technology is its infrastructural expense. Companies and enterprises must invest in making their company 5G-enabled with the Internet of Things (IoT). These services require high-frequency operating devices and antennas. In addition, material cost is a major contributor to the high cost of 5G infrastructure. The mm-wave components require high-performance materials with very low dielectric constant, are moisture-proof, and have low transmission losses, among other features. The companies such as Rogers Corporation, PolyOne Corporation, and Panasonic Corporation are developing high-efficiency delivering materials but at a very high cost, thereby hampering the market growth.
5G technology enables industries with better connectivity and IoT capabilities, thus helping them uplift their annual revenue generation. Developing countries in the initial phase of trials and infrastructure to set up 5G rollout may serve as bright opportunity areas for material manufacturers to invest in. In addition, companies can invest or expand their manufacturing facilities in the countries to get close to their customers while preparing for the impending growth in the global 5G infrastructure. The governments of different countries are actively helping companies to invest in and work on developing 5G-related equipment and materials to help them roll out 5G at an efficient pace in the planned timeline.
Furthermore, leading players such as Panasonic Corporation, Kuraray Co., Ltd., and DuPont de Nemours, Inc. are expanding their production facilities in the Asia-Pacific region to meet the growing demand from Asian countries. Material manufacturers should get in touch with 5G antenna manufacturers in developing countries and work on a contract basis to cater to the customized demands generated by the end users. Therefore, helping evolve their overall growth in the material industry and grabbing new opportunities presented in the market.
| Study Period | 2019-2031 | CAGR | 24.1% |
| Historical Period | 2019-2021 | Forecast Period | 2023-2031 |
| Base Year | 2022 | Base Year Market Size | USD 234.44 Million |
| Forecast Year | 2031 | Forecast Year Market Size | USD 1633.66 Million |
| Largest Market | China | Fastest Growing Market | Asia Pacific |
China Dominates the Global Market
Based on region, the global 5G substrate materials market is bifurcated into North America, Asia-Pacific and Japan (APJ), China, Europe, the U.K., and the Rest-of-the-World (RoW).
China is the most significant global 5G substrate materials market shareholder and is anticipated to exhibit a CAGR of 27.7% during the forecast period. China is one of the prominent players in the market operating across the globe. China has established national plans to completely deploy 5G, capture the profits from its domestic markets, enhance its industrial backbone, and attain a strong position in telecommunication equipment suppliers worldwide. As China is the hub of primary raw materials required for manufacturing these advanced 5G equipment and materials, the country displays strong bargaining power of suppliers. In addition, the country is responsible for supplying raw materials to various countries. The government of China displayed great interest in the deployment of 5G. It introduced an initiative called "Made in China 2025", which will propel the growth of materials manufacturers, equipment manufacturers, and ultimately the entire 5G industry in the nation. Further, the China government has announced an investment of USD 400 billion in the development of 5G technology and the 5G infrastructure's deployment, enhancing market growth.
Asia-Pacific and Japan (APJ) is projected to exhibit a CAGR of 24.4% over the forecast period. The Asia-Pacific and Japan (APJ) region includes technologically advanced nations such as China, Japan, and South Korea working on 5G substrate materials manufacturing and consists of nations such as Taiwan, South Korea, and Japan. These countries have many companies working on 5G substrate materials and producing copper-clad laminates. These are used to manufacture advanced circuit boards to deploy 5G infrastructure and end-user applications such as smartphones, servers, and autonomous vehicles. Further, Japan is one of the leading countries with many leading 5G substrate materials manufacturers in the ecosystem. Some of the largest manufacturers of 5G substrate materials market are Kaneka Corporation, Hitachi Chemical Company, Ltd., and Panasonic Corporation.
In North America, 5G trials have been taking place to speed up the 5G deployment on a commercial scale. The region leads concerning the long-term evolution (LTE) market share. North America has over 28.6 million 5G connections and 502 million LTE connections. 5G has been initially planned to be deployed to provide extra additional coverage and capacity where LTE is already present. In addition, the region comprises giant telecom industry players and equipment manufacturers such as AT&T, Cisco, Nokia, and Ericsson. Therefore, with the growth in the deployment of 5G infrastructure, the demand for 5G substrate materials is, in turn, expected to propel in the region
Europe is lagging behind various Asian nations and the U.S. regarding 5G deployment in the region. Europe strongly depends on China and the U.S. for importing 5G devices and materials. However, Europe consists of key 5G companies originating from Sweden and Finland, i.e., Ericsson and Nokia holding significant market shares following that of Huawei in the global ecosystem, thereby driving the global market growth. Due to the pressure of U.S.-China trade war conditions, multiple manufacturing sites for European Union (EU) manufacturers worldwide contribute to the market growth.
The Rest-of-the-World comprises South America and the Middle East and Africa. South American countries have taken steps toward adopting 5G from FY2020 onward. Due to the COVID-19 pandemic, the frequency spectrum auctions are expected to be delayed, along with the base station installations and an estimated drop in 5G smartphone demand. Another major challenge for the South American countries is the U.S.-China trade war condition, which has significantly impacted the countries' supply chains.
Furthermore, the Middle East and Africa region actively depend on 5G equipment imports from China and South Korea. U.A.E and South African countries are vehemently working toward adopting 5G, with Vodacom and MTN as the two largest telecom operators in South Africa. In order to capitalize on the UAE's strong smartphone demand compared to other MEA nations, Etisalat, a UAE-based telecom operator, teamed up with Huawei and Ericsson to roll out a 5G mobile network in 2019. These developments and planning strategies of companies in the Middle East and Africa region also benefit the 5G substrate materials industry and equipment manufacturers.
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The global 5G substrate materials market is segmented by product and application.
Based on the product, the global 5G substrate materials market is divided into organic laminates, ceramics, and glass.
The organic laminates segment is responsible for the most significant market share and is anticipated to exhibit a CAGR of 24.3% over the forecast period. The market is seeing a great demand for 5G infrastructure and component materials in the next 5G era. Organic laminates include thermosetting insulating components used as the foundation for circuit boards in rigid and flexible copper-clad laminates. Polytetrafluoroethylene (PTFE), polyether ether ketone (PEEK), polyimide (PI), liquid crystal polymer (LCP), and other substrate materials are included in organic laminates that are utilized to implement 5G technology. These materials are used in various final products, including base station antennas and smartphones.
Ceramic materials are most likely to play a vital role in various emerging 5G applications. For these applications, ceramics are a perfect choice because of their low dielectric constants and improved thermal conductivity for thermal management in 5G devices and equipment. Low-temperature cofired ceramic (LTCC) materials will be used in various integrated systems containing MIMO antennas. Ceramic materials are also used in 5G antennas, filters, and resonators. Various research institutes and companies are working on developing ceramic materials for advanced 5G systems and enhancing their overall performance and price. Some manufacturers producing ceramic materials are Murata Manufacturing Co., Ltd., Skyworks Solutions, Inc., and Kyocera International, Inc.
Based on application, the global 5G substrate materials market is segmented into smartphones, base stations, and others.
The smartphone segment owns the highest market share and is anticipated to grow at a CAGR of 24.2% during the forecast period. The 5G smartphone industry is one of the advanced substrate materials' most significant end-use applications. New 5G smartphones to operate on the mm-wave frequency band need antenna arrays that support 4X4 MIMO, 8x8 MIMO, or even more complicated MIMO. Businesses are creating more sophisticated, smaller antennas to operate on the 5G frequency range. The frequency band allocation varies geographically from country to country, and various governments worldwide are still discussing allocating a few bands. In addition, 5G smartphones entered the commercial market in 2019. Apple Inc., Huawei Technologies Co., Ltd., and Samsung Electronics Co., Ltd. are the giants leading the 5G smartphone market. The global demand for 5G cell phones dropped significantly due to the COVID-19 outbreak.
The escalating 5G network technology market and its applications further drive the demand for 5G base stations in the countries. Although just a few nations have deployed 5G base stations, the demand for 5G is anticipated to rise further due to clever measures taken by telecom companies, equipment suppliers, and governmental organizations worldwide. China, South Korea, and the U.S. are the leading countries where 5G base stations are installed at a breakneck pace. In addition, China is actively producing 5G base stations to deploy 5G in their country and is also looking forward to working on 6G soon. According to China's Ministry of Industry and Information Technology (MIIT), as of July 2021, there are 847,000 5G base stations in the country. It plans to install 1.7 million base stations by the end of 2021. The growth and demand for 5G base stations will ultimately raise the demand for 5G MIMO antennas in the global market. The substrate materials play a very crucial role in the efficient functioning of these MIMO antennas.
