Gaining the edge: Semiconductors & 5G opportunity
July 8, 2020
July 8, 2020
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.
The semiconductor industry is changing. To stay on top of the ever-changing processes, you should understand the benefits of 5G’s for the industry.
READ MOREFor 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.
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.
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.
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.
No semiconductor company today is equipped to develop chips for every single use case 5G enables. A collaboration ecosystem is essential for success.
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.