As 5G commercialization is set to kick off in 2019, global chipmakers including Qualcomm, Intel, MediaTek and UNISOC (Spreadtrum & RDA) are looking to expand their 5G solutions to include non-handset applications, while smartphone vendors Apple, Samsung Electronics and Huawei are actively developing mobile chips in-house, according to industry sources.

In the 5G era, chipmakers will face challenges totally different from what they have experienced over the past years, the sources said, reasoning that the frontend and backend ecosystems associated with 5G communication technologies and applications will together see an unprecedentedly large scale. And those who perform well in the smartphone chip market will not necessarily be the biggest winners in the new-generation 5G market.

Both Qualcomm and MediaTek have kept reporting non-handset chip revenue increases in recent months, highlighting their efforts in diversifying their business tentacles into more sectors to better tap the newly emerging 5G chip market.

Despite failing to land chip orders for new iPhones in 2018, Qualcomm has still managed to sustain growth for overall revenue performance, mainly bolstered by over US$5 billion in revenues from non-handset sectors.

MediaTek has seen the revenue ratio for mobile chip business drop to around 50%, while the ratios for growth-type product lines such as new ASICs, automotive electronics and IoT chipsets have been on the rise.

Industry sources said that 5G technologies will be combined with IoT, cloud services, Industry 4.0, AI, autonomous driving, and SR/VR/XR to create immense new application opportunities, which will be crucial for chipmakers in determining their presence and performance in the 5G era. This in turn will prompt chipmakers to adopt diverse strategies in deploying 5G chip products and markets.

The sources indicated that driven by 5G technologies and applications, the huge business opportunities arising from wireless connection technologies and applications such as smart home, smart city and AI will be far beyond what supply chains can imagine for regular terminal products and markets.