5G Race: Output in 5G modem chips to rise 20%

2019.04.10 14:02:24 | 2019.04.10 16:28:05

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Samsung Electronics Co. will boost its 5G modem chip production by up to 20 percent to ensure leadership in the 5G-powered connectivity age.

The world’s largest memory chipmaker is said to have set a plan to boost production of 5G mobile chips by 10 to 20 percent in response to the burgeoning demand for 5G-enabled phones, according to electronic industry sources on Tuesday.

Earlier this year, Jay Y. Lee, vice chairman of Samsung Electronics, revealed ambitions to dethrone Qualcomm as the world’s biggest non-memory chip player by 2030, through a big push in 5G mobile chipsets.

On Wednesday, Korea and the U.S. become the first countries to commercially roll out 5G networks. The new wireless technology offers up to 20 times faster data speeds than 4G networks and is expected to spur the development and employment of future innovations such as autonomous cars, artificial intelligence and virtual reality.

Only a handful of manufacturers in the world have the capacity to produce 5G modem chips, including Samsung Electronics, the U.S. semiconductor giants Qualcomm and Intel, and China’s HiSilicon, a subsidiary of Huawei. The Korean company has its System LSI unit design the new modem chips and convert the existing production lines to ramp up its 5G modem chip fab capacity.

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Market research agency Strategy Analytics (SA) recently projected the 5G modem chip output for Qualcomm, the world’s leading mobile chip supplier, to be 6.2 million units for this year. Its estimate for Samsung Electronics was 500,000 units, but that number is expected to see a significant boost after expansion.

According to SA, the world 5G chipset market is poised to grow substantially, expanding from $161 million this year to $3.07 billion in 2021 and $7.97 billion in 2023. It also predicted Samsung Electronics’ share in the market to jump from 7.5 percent in 2019 to 20.4 percent in 2023, whereas Qualcomm’s market dominance would slide from 87.9 percent to 46.1 percent during the same period.

Samsung Electronics recently released its latest 5G modem solution, the Exynos Modem 5100, and has already fitted it into the new Galaxy S10, making it the world’s first 5G phone to come with its own 5G baseband, according to the company. It has also reportedly received orders to sell the new modem chips to Apple.

By Kim Gyu-sik and Kim Hyo-jin

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