Component News August 18, 2020
5G Set to Transform the Semiconductor Industry

5G Set to Transform the Semiconductor Industry

Telecommunications companies around the world are racing to deploy the best 5G networks and technologies.  For semiconductor companies, 5G will have a considerable impact. 

The rollout of 5G has been long anticipated in the electronics industry, as the introduction of IOT, low latency, and increased connectivity is set to cause a surge in the semiconductor industry.  Current networks are not reliable enough to support critical operations, but 5G would enable the automation of many these critical operations throughout most industries.

5G Will Enable:

5G smart factorySmart factories:

5G promises to allow manufacturing production operations to become more flexible and efficient, while also improving safety and lowering maintenance costs.  5G networks offer manufacturers the opportunity to construct smart factories and fully take advantage of technologies such as artificial intelligence (AI), automation, augmented reality for troubleshooting, and the Internet of Things (IoT).  From design to distribution, the entire chain of product development will be connected.  Smart factories could also incorporate robots powered by AI & machine learning that would be capable of making real time decisions and perform the dangerous or mundane tasks.  According to a study from Ericsson on the 5G business potential, the expected addressable market in 2026 will be USD 113 billion, a substantial 7% potential revenue growth from current service revenue forecasts.

5G smart citySmart cities:

While many cities have already launched smart city initiatives, these initiatives tend to be small and isolated projects, rather than creating a fully integrated smart city.  5G will serve as the foundation for small-cell networks that will power the next generation of wireless network infrastructure in a city.

More specifically, the application of 5G technology would:

  • Enhance security – Security videos to be would be transferred instantaneously to authorities, enabling them to immediately take action promptly when needed.
  • Improving transportation – Zero latency would enable sensors and devices that power the city’s transportation systems to work seamlessly, communicate with autonomous vehicles, and redirect traffic based on road conditions.
  • Improve infrastructure management – Enhance connectivity between every feature of a smart city’s infrastructure.

5G autonomous vehicleAutonomous vehicles:

Autonomous driving systems require enormous data processing capabilities and speeds to replicate the speed of human reflexes.  5G promises to provide speeds that will dramatically strengthen the capabilities of autonomously driven vehicles.

What does this mean for the semiconductor industry?

The implementation of 5G networks and technologies would be a catalyst for a multitude of technological revolutions, all of which would require higher performing components that are 5G compatible.  To make 5G a working reality, new chips, wafers, memory, and storage components are necessary.  This regeneration of components will result in large capital investments into manufacturing.  As a result of the global shutdown due to the coronavirus, there is currently an adequate level of inventory.  As production begins to resume, chipmakers are beginning to allocate their capacity to certain sectors, particularly medical, 5G, mobile and automotive.  According to Fusion Worldwide, ADI has begun allocating 80% of its production capacity towards medical applications, 5G, and Apple.  Due to factory shutdowns in Mexico and Malaysia, Skyworks is giving allocation priority to 5G customers.  “Skyworks has strategically aligned our product development roadmap with 5G platforms.  We are well positioned to capitalize on emerging opportunities and are leading the way in semiconductor integration as carriers upgrade their wireless networks” said David Stasey, vice president and general manager of diversified analog solutions for Skyworks.  Distributors and customers manufacturing products in other applications have been advised to expect to see allocation issues and delivery delays.


Following the peak of COVID-19’s spread, electronic manufacturers are beginning to resume production and the industry is progressing toward a degree of normalcy.  If your facility has resumed production or is preparing to, we invite you to contact us today.  Aegis Components’ procurement efforts are based on the principle of supplying high-quality components to our clients 100% of the time, and we are eager to fulfill any of your electronic component requirements.  Contact us today!


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