The latest report from IHS Markit | Technology indicates that 5G investments will propel the global semiconductor market revenue in 2020.
The global semiconductor market revenue will touch $448 billion (+5.9 percent) in 2020 from $422.8 billion (–12.8 percent) in 2019.
The deployment of 5G will be the main factor propelling this recovery, not only because of the renewed growth it will bring to the wireless industry, but also due to the wider benefits the wireless technology will bestow on global businesses and economies, said Len Jelinek, senior director, semiconductor manufacturing for IHS Markit | Technology.
Samsung, the world’s largest smartphone maker, is powering ahead with the launch of 5G phones and $2,000 foldable handsets as it heats up competition with rivals U.S. Apple and China’s Huawei, Reuters reported.
Strategy Analytics in a report estimates that less than 1 percent of phones sold in 2019 will be 5G devices, but that share will grow to nearly 10 percent in 2020.
Strong sales of Samsung Electronics’ Galaxy Note 10 smartphone series are limiting forecast profit falls at the South Korean tech giant, raising hopes it is getting back on a growth track after years of moribund sales.
5G’s impact will be changing mobile into a pervasive platform that fosters the emergence of new business models and transforms industries and economies. The rise of 5G will have a positive impact on human and machine productivity, IHS Markit | Technology said.
5G will enable $1.3 to $1.9 trillion worth of economic output in the United States alone by 2035. Innovations enabled by 5G, including augmented reality, mission-critical services, fixed wireless access and the massive internet of things will drive this increase in economic activity.
The growth of 5G will have a direct impact on chip sales. The smartphone business is the largest consumer of semiconductors of any industry, with $87.7 billion in global revenue this year.
The global smartphone business is expected to return to annual unit shipment growth in 2020. This rise will boost semiconductor market revenue driven by the smartphone industry, with chip sales to this segment increasing by 7 percent in 2020, following a 22 percent drop in 2019.
The worldwide semiconductor market will also benefit from growth in other areas including the automotive segment, the IOT, data centers and industrial.