A global accelerated 5G equipment rollout will help the semiconductor industry to rebound in 2020 after a brutal downturn in 2019, according to a new report from IHS Markit.
Following a 12.8% plunge forecasted for 2019, the global semiconductor market will rebound to 5.9% in 2020 reaching $448 billion, up from $422.8 billion in 2019. The main factor propelling this recovery will be 5G, not just because of the renewed growth to the wireless industry, but also the impact the technology will have on global businesses and economies.
“Throughout the history of the semiconductor industry, every market downturn has ended with the arrival of a technical innovation that spurred a major increase in demand,” said Len Jelinek, senior director, semiconductor manufacturing for IHS Markit. “In the past, these innovations have had momentous impacts, such as the advent of the world wide web or the introduction of the iPhone. Now another historic innovation is set will take its place among these advances: 5G. However, 5G’s impact will spread far beyond the confines of the tech industry, impacting every aspect of society and driving new economic activity that will spur rising demand for microchips.”
Aside from telecoms and equipment makers, 5G will provide new opportunities for those creating new content the technology will provide such as changes in fixed wireless access, healthcare, robotics, virtual reality, gaming and other types of entertainment. All of these developments will require billions of dollars’ worth of semiconductors to implement.
This doesn’t even take into account the smartphone business and the new phones developed to take advantage of 5G. IHS Markit said this year alone semiconductor sales in smartphones will amount to $87.7 billion in global revenue. The new mobile technology will also help boost global smartphone annual unit shipment growth in 2020, following declines in 2018 and 2019.
By 2035, 5G technology will enable somewhere between $1.3 trillion and $1.9 trillion worth of economic output in the U.S. alone — about the same that the U.S. spent on automobiles in 2016.
