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5G Internet of Things Devices Market Outlook, Chipset Trend

The 5G standard is designed to address broad applications beyond the smartphone. In the first three years, 5G was mostly implemented in smartphones. However, with the commercialization of the 3GPP Rel.16 5G modem, the adoption of 5G in broad IoT applications is starting to accelerate in 2022.

The 5G RedCap standard in 3GPP Rel.17 will unlock new industrial 5G use cases, and drive market growth beyond 2024-2025.

5G standard roadmap

5g standard roadmap

3GPP published the latest Rel.17 standard in June 2022. A 3GPP Rel.17-compliant 5G modem is expected to be commercialized in 2023. The Rel.17 standard will expand IoT use cases as well as expand mobile broadband. In addition to improved NR positioning and improved sidelink (device-to-device communication), NTN (non-terrestrial network = satellite communications) and 5G RedCap (reduced capacity: 20MHz bandwidth) will be added as new features.

The new 3GPP Rel.18 standard will be published in the second quarter of 2024. For 3GPP Rel.18, existing functionality will be added and have functionality for xR (AR/VR). In the 5G standard, more emphasis is placed on edge computing, AI/ML-based networking, resource management between base stations, and collaboration between base stations and terminals for low-latency connectivity and network resource efficiency for IoT use cases.

3GPP Rel.18 to Rel.20 is positioned as 5G-Advanced. Standards after 3GPP Rel.21 are defined as 6G. Based on the 3GPP roadmap, 6G devices will be commercialized around 2028-2029.

5G device market outlook

Graph: 5G Non-Mobile Devices Market by Application 2019-2027

Graph: Non-Handle 5G Device Market by embb/redcap 2019-2027

The 5G non-mobile device market is growing 157% year-on-year to 28.8 million units in 2022. The growth of the 5G device market will be accelerated in 2025 with the expansion of 5G telematics and IIoT use cases.

Among the applications of 5G, cellular tablets and broadband CPE were earlier supporting 5G. By 2022, 37% of cellular tablets and 34% of cellular CPEs will support 5G, respectively. 5G tablet and 5G CPE will account for about 80% of the non-mobile 5G device market in 2022.

In 2022, the 5G CPE market has grown rapidly, not only replacing LTE CPE but also gaining fiber broadband subscribers in North America, Japan and the Middle East. After 2023-2024, the 5G FWA market is expected to expand in Europe and emerging markets. With the expansion of the 5G network and the decrease in the price of the 5G CPE.

Deployment of 5G/industrial 5G is slow, although many private 5G projects will transition from pilot service to commercial service, and large-scale deployments in 2023. The 5G ICT market is starting to pick up in China in 2022, although Wider deployments will begin in 2024-2025.

For industrial 5G, one of the challenges is that economies of scale are difficult to do, especially in the module and IC business. Industrial 5G use cases such as factory automation, remote robot control, AI bots, real-time video streaming… have small scale scales, which makes it difficult to reduce the cost of hardware. Especially when using a dedicated frequency band for local 5G services, the cost becomes even greater.

For automotive telematics, 5G has been adopted in the Chinese market in 2021 ahead of other countries. Outside of China, 5G communications technology will be commercialized in Europe: 2023, North America: 2024, and APAC: 2024-2025. The share of 5G is expected to start increasing in 2025-2025, reaching 33% in 2027. Demand for V2X, driving assistance, and autonomous driving has become the driver for 5G adoption in vehicles.

The 5G RedCap standard with lower performance and cost will accelerate industry adoption of 5G and wearables, which require no broadband connection or lower power consumption. The first 5G RedCap chipset will be commercialized in 2023, and mass production will start in 2024. It will take 2-3 years for China to deploy 5G RedCap. 5G RedCap will be promoted by the Chinese government, and it is expected to be adopted in smart electric meters, industrial automation, etc. In the rest of the world, adoption of 5G RedCap is likely to begin around 2027.

Early applications of 5G RedCap include electric power utilities, IP camera (including drones, factory automation), industrial IoT (AR glass, AGV, surveillance camera, robot remote control…) and so on. Consumer wearables are expected to adopt 5G RedCap after 2026.

The challenges of 5G RedCap are unit cost and network infrastructure. Mobile operators need to invest their 5G network to support 5G RedCap, so it will take a few years for mobile operators to expand 5G RedCap network over a wide area. As for unit cost, the 5G RedCap chipset is expected to cost more than twice as much as the current LTE Cat.4 chipset initially. The industry expects Chinese mobile operators to support the 5G RedCap module to narrow the gap between LTE Cat.4 module costs.

The millimeter wave (mmWave) 5G market is very small so far. It is expected to reach 0.9 million units in 2021 and 1.7 million units in 2022. In 2022, the market has grown due to the increase of mmWave 5G for tablets (iPad). Excluding tablets, the market size increased only slightly to 0.4 million units in 2021 and 0.5 million units in 2022.

Although mmWave 5G frequencies are being allocated in an increasing number of countries, network investment has not progressed and available space is limited.

Private 5G (used in indoor or domestic area) and Fixed Wireless Access (FWA) applications are likely to be the ones that take advantage of mmWave 5G features. However, mmWave 5G FWA usually requires the use of external antenna units to receive signals from base stations, which hinders its widespread use especially for home broadband. Private 5G has a small business scope and is not conducive to market expansion.

5G Chipset Competition

The cost of 5G chipsets is one of the primary challenges in the wider adoption of 5G networks globally. Currently, only three companies, Qualcomm, MediaTek, and UNISOC, offer 5G chipsets in non-mobile markets. More chip suppliers are expected to enter the 5G modem chip market in 2023-2024.

In 2022, Qualcomm has a dominant position in the handset 5G modem market with over 80% market share. MediaTek is focusing more on the portable routers, CPE and mobile PC market, with early success in the 5G CPE market. UNISOC is developing low-end 5G chipsets and got some design in 5G devices for China and emerging countries.

The price of 5G slimline modem chipset is different for different applications, and the range is from about $65 to $25 from 2022.. Due to the increase in the cost of semiconductor material and inflation, the price of chipset will not drop significantly in 2023. From 2024 Onwards, market expansion and competition are expected to drive down prices, especially in the middle and lower segment.

Non-handset 5g modem roadmap

5g modem roadmap other than phone

Qualcomm and MediaTek are currently marketing 5G chipsets for the newer and midrange. UNISOC markets low-speed 5G chipsets with low connection speed. UNISOC 5G chipset has been certified in China and emerging markets.

All 5G chipsets after 2021 are 3GPP Rel.16 compliant.. It is expected that 3GPP Rel.17 5G chipsets will be commercialized in 2023.

Qualcomm and MediaTek are marketing 5G chipsets that are optimized for a specific application. In addition to the slim modem (x55, x62/65) module, Qualcomm has developed a smartphone chipset for the smart module and tablet, and has a commercial module (315) for the industrial Internet of Things, and a 5G chip (SA515) for cars. The new Qualcomm chipset (x72 / 75) is a SoC optimized for mobile CPE and router. MediaTek offers SoCs for MBB/CPE (T750, T830), for cars (MT2735), and T900/1300 for tablets.

The number of 5G chip suppliers is expected to increase in 2023. GCT Semiconductor, ASR, Sanechips, Cygnus, and TD-Tech are likely to market the new 5G chipsets. Also, Sequans may market its 5G chipset in 2023-2024.

For 5G modem ICs, there is a tendency to use the latest processing technologies for lower power consumption and better performance.. Qualcomm and MediaTek 5G chipsets in 2021-2022 use a 4/5nm process. On the other hand, smaller integrated circuit suppliers choose lower cost 7/8nm and 12nm.

5G RedCap chipset

The schedule for 5G RedCap chipsets is expected as follows: sample shipment in 1H/2023, mass production of the chipset in 2H/2023, and module and equipment debuts expected in 2024.

The currently confirmed 5G RedCap chipset vendors and schedules are as follows:

  • 2H/2023: TD-Tech, Qualcomm (x35)
  • 2024: UNISOC, ASR Microelectronics, MediaTek?
  • 2025-2026 (?): Sanechips, Cygnus, C-Mind, Eigencomm, Xinyi
  • 2026-2027: Sony Semiconductor, Sequans

With the exception of Qualcomm, Chinese IC manufacturers are expected to take the lead in developing 5G RedCap chipsets. TD-Tech is the oldest, followed by UNISOC and ASR. In addition, Sanechips, Cygnus, C-Mind, Eigencomm, Xinyi, and others may market 5G RedCap chips after 2025. MediaTek is also considering commercializing 5G RedCap. There are challenges in terms of funds, human resources, LTE and 5G IP assets to develop 5G RedCap chipsets by startups.

Among Western chipmakers other than Qualcomm, Sony Semiconductor and Sequans plan to develop a 5G RedCap chip. However, the timeline is not firm yet because the 5G RedCap marketing schedule is not clear in markets other than China.

The 5G RedCap chipset is initially expected to be dual-mode with LTE Cat.4. The baseband logic size is expected to be similar to LTE Cat.4, but the RF circuit is increased compared to LTE.

This article and data is based on our market research report “2022 Cellular Broadband Device & Module Market”, published in December 2022. Please reach out to us if you are interested in the details. Any feedback would be greatly appreciated.

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