The competition is heating up for the next big thing in wireless — 5G — following a downturn in smartphone business. Chipmakers all race to get a piece of the 5G action.A 5G smartphone will be able to process a staggering amount of data, so to power a 5G network, chip makers need to manufacture a new class of chips. 5G networks need greater coordination across the entire semiconductor ecosystem compared to what they pose today. The introduction of 5G, from automated factories and smart homes to cheaper consumer electronics, will drive the industry in the coming years.
TSMC expects sales in the March quarter from $10.2 billion to $10.3 billion, compared to an average analyst estimate of $9.6bn. Since customers from Apple Inc. to Huawei Technologies Co. embraced more advanced semiconductors in smartphones, Taiwan's largest company also reported a fourth-quarter profit that surpassed the highest analyst estimate. The reliable results show how Samsung Electronics Co. and Intel Corp. are the world's largest contract chipmaker investing in chip-making technology to protect its business lead. In 2019, TSMC spent nearly $15 billion on development and resource planning for the arrival of smartphones in the fifth generation in the coming years.
Leading players are already building out their 5G networks. It will take a couple of years for those networks to become ubiquitous and reliable as today's 4G networks. Still, by the end of 2020, customers can get 5G connectivity options on their smartphones. When it comes to 5G mobile chips, the market has become more consolidated, with many players investing in research and development for manufacturing chips that support 5G connectivity. There are still many application servers with 10 processor core on the market.
The 5G modems to feed giant application processors will be a big challenge for chipmakers. The manufacturers connect application processors and other physical chips for 5 G applications based on the finFET transistors. A further vital part of the 5G wireless infrastructure is radio frequency (RF) technology. 4G networks are operated between 700 MHz to 3.5 GHz. In contrast, 5G will need to operate at the mmWave bands, which provide ten times more bandwidth than 4G connectivity. The RF front-end needs to support more than 40 frequency bands and three-carrier aggregation bands on present-day 4G smartphones. In contrast, five network aggregation bands and 50 frequency bands will need to help the RF front-end in a 5 G handset, which will push chip makers to come up with innovative solutions.
Given that, it will take a tremendous effort from chipmakers to make 5G smartphones happen. It will require a far closer collaboration across the entire semiconductor industry.