Description

The highly anticipated commercialization of 5G finally materialized in 2019, and several countries, including the United States, South Korea, and China, led from the front. The spike in new infrastructure investments, especially in China, will propel the demand for 5G equipment and materials, thereby resulting in a wave of optimism in an otherwise capital-intensive, competitive, and low-margin telecommunications infrastructure equipment industry. To accommodate the exponential growth in mobile data traffic, it is imperative to shift to 5G networks as it is impossible to effectively cater to the unprecedented increase in data traffic through the expansion of existing infrastructure. 5G networks are characterized by ultra-high-speed Internet connectivity, low latency, and improved reliability. However, high frequencies are characterized by a high number of cycles/waves per unit time and entail larger signal losses, thereby limiting the maximum distance traveled by the waves. In addition, high-frequency waves are limited by their ability to penetrate hard surfaces/materials. Thus, unlike earlier generations, 5G infrastructure entails denser networks comprising both macro and small cells or base stations. Accordingly, the materials necessary for 5G applications will be significantly different from those used in conventional or previous-generation network infrastructures.

This Frost & Sullivan study quantifies the consumption of key materials used in 5G network infrastructure (macro and micro base stations) applications, that is, PCB substrate materials (resins), radome materials, and cable materials. The methodology includes an analysis of the changes in the uptake of individual materials per base station (for both sub-6 GHz and mmWave applications). The research service gauges the impact of ongoing trends and the evolving technology scenario on the demand for individual materials over the forecast period (2021-2027).

The study also analyzes the overall market based on 5 important material types—poly tetra fluoro ethylene (PTFE), polyphenylene oxide/polyphenylene ether (PPO/PPE), hydrocarbons, modified epoxies, and liquid crystal polymers (LCPs). It classifies 5G antenna radome materials as thermosets and thermoplastics and quantifies the consumption of these materials over the forecast period. Moreover, the study focuses on quantifying the demand for optical fiber cables and coaxial copper cables and analyzes the consumption of the key materials used in individual layers for the optical fiber cables and the PTFE used in coaxial copper cables.

The raging COVID-19 pandemic (and the ensuing supply chain disruptions) and the political discord over the security concerns associated with 5G equipment (especially against Chinese companies) have affected the pace of 5G network deployment and collaborative development activity across geographies. In addition, most short-term NSA deployments are expected to be in the sub-6 GHz frequency range, which overlaps with the 4G/LTE infrastructure. Some of the infrastructures will also allow software upgrades to 5G, which will impact short-term market growth for 5G materials.

However, the commercial deployment of 5G standalone networks is expected to gather pace in the medium term. The shift to and the proliferation of high-functionality 5G networks entail significant upgrades in terms of equipment (and the value-added materials used therein). The adoption and the large-scale use of specific materials for 5G applications (for both sub-6 GHz and mmWave applications) will usher in a wave of innovative materials and alternatives.

The robust growth in investments in 5G, the aggressive pace of 5G base station installations, especially in China, and the inherent need for materials in 5G equipment in relation to previous-generation equipment offer strong growth opportunity for incumbents across the value chain, including material suppliers, CCL manufacturers, PCB suppliers, and equipment providers/integrators. In addition, the market must continue to ensure agility of material supply across geographies and reduce the lead time associated with the specialty CCLs used in 5G applications.

Frost & Sullivan analysis indicates that the global 5G materials market is slated to register a robust double-digit growth of about 14.6% in terms of volume from 2020 to 2027.

Author: Gautam Rashingkar