Global 5G Chipset Market Outlook to 2030

Global 5G Chipset Market Overview

• In 2023, the global 5G chipset market was valued at $24 billion, driven by increasing demand for high-speed internet, rising smartphone adoption, and expanding IoT ecosystems. The proliferation of smart devices and the need for enhanced network capabilities have significantly fueled the demand for 5G technology.

• The market is dominated by key players such as TSMC, Samsung Semiconductors, Infineon Technologies, Qorvo and NXP Semiconductor. These companies lead the market due to their innovation, extensive product portfolios, and strategic partnerships.
• In 2023, the European Union launched the "Digital Decade" initiative, aiming to achieve comprehensive 5G coverage across the region by 2025. This initiative includes substantial investments in 5G infrastructure and research, promoting innovation and digital transformation.

Global 5G Chipset Current Market Analysis

• North America as dominant region: In 2023, North America's 5G chipset market dominance is driven by substantial investments in 5G infrastructure, amounting to $100 billion across the United States and Canada. The Federal Communications Commission (FCC) allocated significant spectrum resources to enhance 5G deployment, with over 1,000 MHz of mid-band spectrum available. Additionally, leading tech companies such as Qualcomm and Intel, headquartered in North America, spearhead innovation, contributing to the region's leadership in the market.
• APAC as emerging region: The Asia-Pacific (APAC) region is emerging as a key player in the 5G chipset market, with significant investments in 5G infrastructure in 2023. Governments in countries like Japan and South Korea have implemented comprehensive 5G rollout plans, supported by regulatory frameworks that expedite spectrum allocation. In February 2023, over 37 percent of mobile subscribers had adopted 5G, contributing to 78 percent of the total mobile data traffic in South Korea.
• USA as dominant country: The United States stands as the most dominant country in the global 5G chipset market. This dominance is driven by several key factors, including substantial investments in 5G infrastructure and the early adoption of advanced technologies by major industry players. Launched in 2022, the Public Wireless Supply Chain Innovation Fund is a $1.5 billion program by the National Telecommunications and Information Administration (NTIA) under the U.S. Department of Commerce. Funded by the CHIPS and Science Act of 2022, this initiative aims to invest in the development of open and interoperable 5G networks.

Global 5G Chipset Market Segmentation

The Global 5G Chipset market can be segmented based on several factors:

By Chip Type: Global 5G Chipset market segmentation by Chip type is divided into RFICS and modems. In 2023, RFICs dominate the global 5G chipset market. This dominance is primarily due to their critical role in enabling wireless communication by handling radio frequency signals. The demand for RFICs is driven by the rapid deployment of 5G networks, which require advanced RF front-end modules to support high-frequency bands and massive MIMO (Multiple Input, Multiple Output) technology.

By Operational Frequency: Global 5G Chipset market segmentation by operational frequency is divided into sub-6 GHZ and millimeter wave (mm wave). In 2023, sub-6 GHZ dominance is attributed to its wider coverage, better penetration capabilities, and cost-effectiveness compared to millimeter wave (mm Wave) frequencies. Sub-6 GHz technology is more suitable for urban and rural deployment, facilitating faster and broader adoption of 5G networks across diverse geographic regions.

By Product Type: Global 5G chipset market segmentation by product type is divided into smartphones/tablets devices, network infrastructure equipment and consumer premises equipment. In 2023, network infrastructure equipment dominates due to the rapid expansion of 5G networks worldwide, necessitating extensive infrastructure upgrades. The increasing demand for faster and more reliable connectivity in various sectors, including telecommunications, healthcare, and smart cities, further boosts the need for advanced network infrastructure equipment, solidifying its leading position in the market.

Global 5G Chipset Market Competitive Landscape

• TSMC Expands in the U.S. (2024): Taiwan Semiconductor Manufacturing Company (TSMC) is set to build its third advanced fabrication plant in Phoenix, Arizona. This expansion is part of a collaboration with the U.S. Department of Commerce, proposing up to $6.6 billion in CHIPS Act funding to boost semiconductor manufacturing capabilities in the United States.
• Samsung's 5G NTN Modem Technology (2024): Samsung Electronics has unveiled a new standardized 5G Non-Terrestrial Network (NTN) modem technology. This innovation facilitates smartphone-satellite communication, paving the way for enhanced connectivity in remote and underserved areas.
• Qorvo's Product Launch and Acquisition (2024): Qorvo has introduced the industry's highest gain pre-driver for 5G massive MIMO (mMIMO) applications, showcasing its commitment to advancing 5G technology. In addition, Qorvo announced the acquisition of Anokiwave, a leading supplier of high-performance silicon integrated circuits (ICs) for intelligent active array antennas, enhancing its capabilities in defense, SATCOM, and 5G applications.

Global 5G Chipset Industry Analysis

Global 5G Chipset Market Growth Drivers:

• Integration of AI in 5G Chipsets: The growing incorporation of AI into 5G chipsets is revolutionizing computing, photography, and gaming capabilities. For instance, MediaTek's launch of the Dimensity 7300 and 7300X 5G chipsets in May 2024 for mid-range smartphones highlights this trend. These advancements are enhancing user experiences and driving the adoption of AI-powered applications.
• Spectrum Auction for 5G Networks: Countries worldwide are actively allocating spectrum for sub 6GHz and mmWave frequencies to support 5G networks. In 2024, 14 countries in Europe, 7 in LATAM, and 14 in APAC have announced spectrum sales for 5G. These auctions are crucial for expanding 5G infrastructure and enabling faster, more reliable connectivity.
• 5G Connectivity in Affordable Smartphone Segment: The easing of supply chain disruptions is leading to a reduction in 5G chipset prices. This price drop allows budget smartphone brands to offer 5G-enabled devices for under $120. As a result, 5G connectivity is becoming more accessible to a broader consumer base, accelerating the growth of the affordable smartphone segment.

Global 5G Chipset Market Challenges:

• Supply Chain Disruptions (2022-2023): The global chip supply chain has faced substantial disruptions due to pandemics, natural disasters, material shortages, and conflicts. For instance, Russia's invasion of Ukraine in 2022 caused a significant disruption to the neon gas supplies essential for chip manufacturing. These disruptions have led to delays and increased costs in chip production, impacting various industries reliant on these components.
• Rising R&D and Design Costs for 5G Chipsets (2022-2024): The increasing complexity of chips, particularly those made on leading-edge manufacturing nodes, has driven up research and development costs significantly. From 2022 to 2024, the development expenses for 5G chipsets have surged, posing financial challenges for companies in the semiconductor industry.

Global 5G Chipset Future Market Outlook

By 2029, the Global 5G Chipset market is expected to reach USD 95 billion, driven by advancements in technology, increasing demand for high-speed connectivity, and the proliferation of IoT devices.

Future Market Trends

• Increased Adoption of IoT Devices: The future of the 5G chipset market will see a significant boost due to the proliferation of IoT devices. By 2029, it is estimated that there will be over 75 billion IoT devices worldwide, driven by the need for enhanced connectivity and efficiency in sectors such as healthcare, automotive, and manufacturing. According to the International Telecommunication Union (ITU), the deployment of IoT devices is expected to grow by 24% annually from 2024, necessitating advanced 5G chipsets to support seamless and high-speed connections.
• Expansion of Smart Cities: Governments globally are investing heavily in smart city initiatives to improve urban living conditions through technology. For instance, the European Union has committed over 1.5 billion to smart city projects by 2025, with 5G infrastructure playing a crucial role in these developments. The deployment of 5G networks will enable real-time data collection and management, enhancing services like traffic management, energy distribution, and public safety, thereby increasing the demand for sophisticated 5G chipsets.