RESEARCH REPORT

In brief

In brief

  • 5G technology promises an extraordinary expansion in the use cases and customer base available to semiconductor companies.
  • This is a prime opportunity for semiconductor companies to think boldly beyond simply selling chips and reimagine their business models.
  • Semiconductor companies can prepare for 5G’s opportunities by understanding the technology’s implications and building a collaboration ecosystem.


5G is ready for its closeup

Companies and consumers alike are eagerly anticipating what this new cellular network technology will make possible—so much so that 5G adoption is widely expected to outpace 4G’s when it was introduced.

For semiconductor companies, 5G offers plenty of potential. Speed is one factor, but reliability and low latency are the biggest benefits, unlocking vast new applications and use cases. But tapping into this potential require new monetization models as well as a new organization structure and different routes to market to reach customer bases they’ve never engaged with before.

Unlocking new use cases with 5G

Mission-critical applications simply can’t trust the current network. But with 5G’s extreme reliability and ultra-low latency, those concerns largely disappear—making possible all sorts of industry use cases that couldn’t operate before.

Smart cities

5G can enable cities to automate functions from buildings operations to traffic safety, and connect buildings, streets and a wide range of devices.

Healthcare

5G significantly improves outcomes for patients expanding telemedicine, enabling remote monitoring, and allowing AI to improve diagnoses.

Near-limitless possibilities

5G is a true game changer. But at this early stage in the game, no one really knows the extent and types of applications we can expect.

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Riding the 5G waves to success

For semiconductor companies, the expected two-stage adoption means two distinct go-to-market strategies and plans will be needed to more fully capitalize on 5G’s potential.

$31.5B

In the first wave, semiconductor companies must prepare for a big bump in 5G handsets—raising 5G revenue from near zero in 2018 to $31.5 billion in 2023—driven by smartphones and demand for 5G speed.

285%

In the second wave, growth is created by the massive number of new applications beyond smartphones. For example, automotive applications are predicted to have a CAGR of 285% between 2021-2023.

Going beyond silicon as a service

Semiconductor companies need to begin working now to identify new ways to present their products and technology to customers, and new ways to monetize them, to create new value streams across different adoption timeframes.

This could include offering silicon as a service, which innovative semiconductors are already doing. But several other potentially promising models are possible.

Creating value in a platform with embedded silicon

Identify system-level opportunities in which a combination of specific, differentiated silicon can capture a larger share of the market.

Monetizing features after the point of sale

Incorporate additional features in chips and tailor access to those features to what customers actually need, creating a pay-as-you-go model.

Monetizing data after the point of sale

Take advantage of the vast amount of internal performance data available to generate valuable insights for end customers through analytics.

Appealing to a broader customer base

5G’s speed and reliability will expand and diversify the customer base for chips, bringing more companies looking to use semiconductor technology.

Understanding the use cases and real end customer

Semiconductor companies need to truly understand the potential 5G use cases their products enable and who’s the end customer of those use cases.

Restructuring the organization for 5G

A growing customer base significantly impacts how companies structure themselves, develop products and create their product portfolios.

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No semiconductor company today is equipped to develop chips for every single use case 5G enables. A collaboration ecosystem is essential for success.

Building a new approach for 5G

With such an extensive and diverse customer base for 5G, the traditional go-to-market model for chips just won’t work. Instead, semiconductor companies have to think about expanding their scale via a collaborative partner ecosystem.

This creates a prime opportunity for semiconductor companies: to think boldly beyond simply selling chips; to reimagine their revenue streams; and to approach old and the vast number of new customers with new business models.

Syed Alam

Managing Director – Semiconductor, Global


Timothy Chu

Senior Manager – Accenture Strategy


Agneta Björnsjö

Principal Director – Accenture Research


Samridhi Chopra

Research Senior Analyst

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