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Is 5G Catalyst for the Semiconductor Market?

IntroBlurring the lines between physical and digital worlds, IoT and cyber-physical systems play an integral role in the rampant development of technology. Smart grids, autonomous vehicles, AI, and robotics are reconfiguring the way we live and work.

Especially with the rollout of 5G technology in many parts of the world, it features maximum data transmission speeds of around 10Gbps and has minimal latency. 5G innovation put forward seamless, HD video streaming, factory automatization, and robust medical telepresence. This has led to a growth spurt in the stagnant market of the semiconductor industry that was vastly affected by the onset of the pandemic.

Impact of 5G on Semiconductor Market can be seen from the fact that various components of the IoT infrastructure like processors, modems, and logic chips at leading-edge devices will require increased memory output and higher performance to sustain and support the next-gen applications of the future.

Even though the coronavirus pandemic had temporarily threatened the components supply chain in the semiconductor market leading to an acute shortage of chip manufacturing in the past year, 5G deployment in various parts of the world, had saved the day. Armored with innovative features while integrating with IoT at a large scale, Impact of 5G on Semiconductor Market is massive, to say the least.

5G’s impact on every industry is predicted to break the confines of the tech industry while affecting every aspect of society and driving new economic activity leading to a spur in the growing demand for microchips.

Deficit in Semiconductor Market Supply Chain

Albeit rising prices and geopolitical tensions across the world due to pandemic times, 5G component sourcing has become more challenging in the past few years as companies are forced to comply with the laws and regulations of the government of their respective countries due to which, Impact of 5G on Semiconductor Market also suffered a blow.

fig 1Like the US-China tariff war that had split the worldwide market for mobile communications networks. With the first blow coming from the US government, as they forbid US companies from doing business with China’s ZTE and later Huawei, the Chinese government retaliated by banning government purchases of US software, and telecom infrastructure products.

This resulted in a standstill between the import and exports relations of many semiconductor industries at a massive scale. And then the onset of pandemic after this worked like a cherry on the cake which led to a temporary shutdown of many markets. Due to this, Impact of 5G on Semiconductor Market will be greatly affected.

Since the situation in North America has changed massively due to the recent change in government and the anti-China sentiment going around the country, this is not the end for all the discussion of Impact of 5G on Semiconductor Market as well.

Despite this deadlock, market, devices, and technology adoption have started moving forward despite the bureaucratic side of the discussion. Other companies, like Taiwanese Semiconductor company, will be benefitting from this opportunity as well as Nokia and Ericsson that will also grab this golden opportunity, since countries like Mexico, Germany, and the UK might weigh the risks of angering Washington by utilizing 5G networks based on a kit from Huawei. This will also show the Impact of 5G on Semiconductor Market.

Because of the 5G rollout, demand for Field-Programmable Gate Arrays (FPGAs) should also grow which will help both Intel and Xilinx. Meanwhile, Ethernet switches and networking equipment should also play their role in boosting the sales from Intel again as we count on Impact of 5G on Semiconductor Market.

Role of IoT Features in Boosting 5G and Semiconductor Markets

fig 2While market specialists and businesses justify investments in 5G technology on the expectation that we’ll be using this technology for not just mobile data in the coming decade but also for the onset of IoT devices.

5G networks are predicted to be a key enabling technology for the coming IoT revolution with a long-term promise to expand the capacity of future devices that will be able to handle the massive amounts of data these devices consume.

With the onset of intelligent devices performing various applications like smart grids, smart appliances, and many more, IoT infrastructure will be needing support from both 5G and semiconductor industries to make the transition of next-generation possible, thus confirming the Impact of 5G on Semiconductor Market.

Apart from this, other IoT devices will also show different requirements like instead of high data capacity, they will need the highest levels of reliable connectivity and very low latency that can be achieved only with the help of 5G networks. That will in turn have an Impact of 5G on Semiconductor Market.

Future Challenges and Prospects

fig 3Impact of 5G on Semiconductor Market has already started taking its shape in the form of innovations getting developed all around the world. And as Smart cities and devices, autonomous vehicles, etc, have started spreading at a wide scale, the future is not far behind where we can imagine a world having chips in just about everything that defines our way of life.

With many recent developments happening worldwide in the 5G world, the Impact of 5G on Semiconductor Market has started to show us a trailer of the upcoming future where the semiconductor industry will play an integral role in the technology sector.


Aishwarya Saxena

A book geek, with creative mind, an electronics degree, and zealous for writing.Creativity is the one thing in her opinion which drove her to enter into editing field. Allured towards south Indian cuisine and culture, love to discover new cultures and their customs. Relishes in discovering new music genres.

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