Non-handset 5G market volume will reach 117 million units by 2026 with tablet, CPE and telematics to be the top 3 volume applications.
Non-handset 5G Market Outlook
5G already becomes popular in smartphone by 2021, but its step is slower for non-smartphone applications. Broadband 5G market start picking up in lead 5G market in 2021. TSR forecasts approx. 11 million units of 5G device shipment in 2021. With the commercialization of 3GPP Release 16, industrial and automotive fields will gradually increase 5G adoption from 2022. New 5G Redcap standard gains interest from China supply chain for long term 5G SA (standalone) migration.
5G Standard Evolution
5G standard is going to add new feature-sets to increase applications. The first 5G standard, 3GPP Rel.15 only focuses on enhanced mobile broadband. 3GPP Rel.16 standard first introduces URLLC (Ultra Reliable, Low latency Communication) feature-sets to support industrial 5G scenarios, as well as further enhancing broadband communications. 5G Rel.16 chipset was introduced from several suppliers in 2021.
Future 5G standard, 3GPP Rel.17 will add RedCap (Reduced Capacity) standard, which was originally called NR-Light. 5G Redcap will address low end 5G applications, which does not require 100+ Mbps of data rate. First 5G Redcap standard will support 20MHz bandwidth. 3GPP discuss further enhancement of 5G Redcap in Rel.18 to support 5/10/20/40MHz bandwidth.
There are no significant change in LTE Cat.M and NB-IoT standard after 3GPP Rel.15. LTE Cat.M/ NB-IoT already satisfies 5G massive MTC standard.
5G Market Forecast
In 2021, non-handset 5G device market volume will reach 10.9 million units. 5G tablet accounts half of total 5G market, followed by CPE (22%), mobile router (15%), and industrial modules. 5G Tablet, CPE and mobile router are mainly sold in North America, Japan and China market. While many of industrial 5G module is used in China market.
For broadband applications, 5G device will be mainstream in North America and Japan in 2022-2023. 5G eMBB device market will expand to EMEA and APAC countries during 2022-2024. Industrial 5G market will gradually start growing in 2022-2023, as many of industrial 5G trials seen in developed countries shift to commercial. In automotive telematics, 5G adoption will start in 2022, but the market will expand in 2024-2025. By 2026, 25% of all car OEM telematics are expected to be 5G. By 2026, thanks to use case and geographic expansion, non-handset 5G market volume will reach 117 million units. Tablet, CPE and telematics will be top 3 volume applications in 2026.
Industrial 5G market is expected to expand to about 5 million units in 2024, and reach to 15 million units in 2026. China takes ahead of industrial 5G commercialization in 2021, thanks to the launch of government supported projects, followed by national government’s “New Infrastructure Construction” policy. On the other hands, most projects in North America, Europe, Japan and others are still in the trial phase in 2021. Commercialization of 3GPP Rel.16 will be a trigger for the adoption of industrial 5G after 2022.
Currently, typical industrial 5G use case is high speed data transmit (Industrial Gateway, DTU) and video based applications (surveillance camera, drone, remote monitoring….). Industrial 5G applications is expected to expand after the 3GPP Rel.16 and URLLC standards availability. For the URLLC service, it is necessary to prepare MEC (Mobile Edge Computing/Edge Server) together, and it will take time to spread.
The millimeter Wave (mmWave) 5G market reaches 1.7M units in 2021, accounting for 16% of total 5G shipments. It is mainly used in 5G eMBB devices for North America. Because of the limitation of network availability, mmWave 5G market share will slightly drop to 15% in 2026.
mmWave 5G takes advantage of wider bandwidth than sub-6GHz 5G, but it is difficult to build wide area network. mmWave 5G network is deployed in high-dense urban areas (hot spot) and in-building (private 5G/local 5G). CPE (FWA) is considered to be suitable use case of mmWave 5G. However, especially for home CPE, the low propagation of mmWave radio, and needs of self-installation of outdoor mmWave antenna is the challenge
5G RedCap is used for the applications that require low-latency, high-reliability communication with data throughput similar to LTE. Typical applications considered for 5G RedCap include: wearable, AR google, facial identification, AGV, robotics, drone, factory automation, material handling, lifeline monitoring or the like.
5G RedCap device market start to rise in 2025, although we estimate that 5G RedCap market volume will be very small by 2026. The key challenge of 5G Redcap for chip suppliers is to find high volume applications. LTE Cat.1/4 satisfies many industrial use cases, and offers very affordable price. Initially, 5G Redcap will be used in 5G SA environments like private 5G/ local 5G, which is estimated to be small volume market for module and chips.
5G Chipset Development
Now Qualcomm, MediaTek and UNISOC are the main suppliers of non-handset 5G chipsets. Qualcomm has been widely adopted in the early stages of the market. MediaTek released non-handset 5G chipset dedicated for broadband applications in 2021, and is expanding its adoption for 5G CPE and Laptops. UNISOC is adopted by the Chinese suppliers low-priced 5G CPEs and modules.
Initially, 5G chipsets were developed for smartphones, and none were specifically optimized for non-handset applications. Starting from 2021, 5G chipset for CPE (MediaTek T750), industrial module (Qualcomm 315), PC modules (MediaTek T700) have appeared.
Chipset price is one of the challenges for 5G market expansion. For making lower priced 5G chipset, suppliers has been developed new chipsets to cover broader price segments since 2020. Qualcomm initially introduced high-end 5G modem for all applications, but gradually introduced lower priced 5G modems (x62 for mid end eMBB, 315 for industrial applications, low data rate). MediaTek first introduced mid-end 5G chipsets. Now it started to support higher data throughput in latest T800 5G chipset.
In 2021, Qualcomm (x62/65), UNISOC (V516) and MediaTek (M80/T800) released the modems for 3GPP Rel.16. The products equipped with these modems will be released in 2022. 3GPP Rel.16 chipsets enhances data throughput, but can also supports ultra-reliable, low latency communications to cover industrial use scenarios.
Currently 5G chipset employed advanced semiconductor process nodes (7nm or below).
Tier2/3 chipset suppliers, such as GCT Semiconductor, Sequans, Sanechips and ASR Microelectronics are expected to release first 5G Rel.16 chipset in 2023 or later. These new entrances could accelerate price competition.
5G RedCap Chipset
The 5G RedCap chipset is expected to be the first product to appear in late 2022 and early 2023 after the release of 3GPP Rel. 17. Qualcomm and UNISOC are likely to commercialize it at an early stage. After 2024, it is anticipated that several IC suppliers which currently commercializing LTE Cat.4 and Cat.1 will start to introduce 5G RedCap chipset.
There are two possible methods for developing 5G RedCap chip: reusing LTE Cat.1/4 IC design, or designing new chip. For RedCap SoC, the baseband logic size is not much different from LTE Cat.4, but the RF circuit should be larger than LTE. From a cost perspective, 22/28nm is considered to be the suitable process node, although 12/14nm may also be the choice.