5G Semiconductor Market Will Be a $260 Billion Opportunity

Two new forecasts from IDC shed light on the sizable opportunity for 5G-related semiconductors in smartphones and macrocell base transceiver stations (BTSs) for the period 2021-2025. Over the next five years the cumulative market size for processors and RF components in 5G smartphones will be $231 billion, while 5G RF analog, signal processing, and network semiconductors in 5G macrocells will be $29 billion.

Increasing RF complexity in mobile phones is concentrating all the semiconductor growth among RF components while processors, discrete and integrated application and baseband processors, will see relatively flat growth. Among 5G phones specifically, processors will have a five-year compound annual growth rate (CAGR) of 17% while for RF components it will be 32%.

"The addition of mid-band spectrum, more carrier aggregation capabilities, and in some cases mmWave modules is creating a lot of new revenue opportunity in 5G phones," said Phil Solis, research director, Connectivity and Smartphone Semiconductors at IDC. "The potential of this market will grow as Chinese OEMs expand globally with support for more RF bands and as mmWave 5G phones gain acceptance. Catalysts for mmWave module include Apple's inclusion of mmWave modules in all of its U.S. smartphones, mmWave network buildouts in more countries, and impending mmWave products from mobile phone semiconductor vendors other than Qualcomm.

Worldwide revenue attributable to the semiconductor contents of 5G macro cellular base stations will grow from $4 billion in 2020 to $6 billion in 2025. Semiconductor types include communication processors, RF power amplifiers, transceiver semiconductors in radio antennas, and baseband units for 5G macrocell BTS.

"Macrocell base transceiver stations capable of processing new radio signals are the major enablers to deliver high-bandwidth and low-latency 5G services over a large service area, and C-band spectrum provides optimal capacity and coverage characteristics to accelerate mobile communication transformation," said Ben Sheen, research director for Enabling Technologies: Networking & Communications Infrastructure at IDC. "Further deployment of the mmWave small cell layer on top of the existing networks in an overlay architecture will boost network capacity and bandwidth to reach 5G's game-changing performance targets.

Outside of 5G phones and macrocells, growth in the 5G semiconductor market will come from 5G small cells, repeaters, and customer premise equipment (CPE) as well as 5G-enabled PCs, media tablets, cars, and a long tail of IoT products. 5G smartphones and radio access network (RAN) infrastructure are where the concentration of 5G-related semiconductor revenue exists.