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Top chipmaker anticipates bullish 5G rollout in 2020

Scott Tong Oct 18, 2019
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The buildout of next-generation 5G wireless networks and purchases of 5G smartphones will come faster than anticipated in 2020, according to one of the world’s largest semiconductor manufacturers. Taiwan-based TSMC, which supplies Apple, Qualcomm and Huawei, among others, announced an accelerated forecast for next year based on orders for chips that go in 5G networks and smartphones.

TSMC expects the global penetration rate of 5G smartphones will exceed 10% in 2020, compared with a single-digit forecast just six months ago.

Initially, consumers will likely have their first 5G experiences on their smartphones, downloading movies two, three, even 10 times faster and enjoying more responsive videogames, said analyst Avi Greengart, founder of the firm Techsponential.

“So when you tap the screen to shoot, you won’t be killed by someone else because their connection is better,” Greengart said.

Once telecom firms build out 5G networks, entertainment companies, including concert and sports venues, will try to lure customers with enhanced 5G experiences, said analyst Bill Menezes at the research firm Gartner. At a football game, “you could train your phone on the field, possibly,” Menezes said. “You could get an augmented reality view of the game. So you have every player’s movement tracked from the previous play so you can kind of get an instantaneous detailed replay of what just happened on that big touchdown.”

Menezes estimates 22% of phone sales in 2020 will be 5G phones. But the optimism assumes a future 5G “killer app” that consumers want. If that doesn’t come, consumers may not pony up for 5G phones and service.

“The operators would like to charge a higher monthly fee,” semiconductor analyst Linley Gwennap of the Linley Group said. “But if you’re paying more for the phone, and then you’re getting hit with an extra $10 a month for your 5G service, you start to ask yourself ‘Is this really worth it?'”

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