What is the investment direction of the 5G trend?

Countries and regions are actively preparing for the advent of the fifth generation mobile communication technology (5G) era. In addition to the United States, Asian countries such as Japan, South Korea, and Taiwan have also actively invested resources in deploying 5G infrastructure and strive to enter commercial operation by 2020. India, which is currently relatively behind in technology, also plans to launch 5G telecommunications services within the next four years.

In recent years, communication technology has developed by leaps and bounds, with the continuous advancement of mobile communication technology, the cross-domain integration of communication and information, and the continued prosperity of mobile devices such as smartphones. These have not only brought more convenient innovative applications to people's lives, but also triggered new market momentum and development opportunities.

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Mobile devices continue to prosper, creating new business opportunities

Looking back over the past decade, the evolution trajectory has evolved from 2G GSM (voice, messaging) to the 3G era, when smartphones have become increasingly popular. Smartphones have gradually entered our lives, and social software, mobile games, etc. have become increasingly popular. Coupled with telecom operators launching all-you-can-eat discounts, mobile Internet access has become indispensable.

After entering the 4G era, thanks to the increase in data transmission rate, users can enjoy a new high-speed mobile network experience. The quality of watching audio and video on mobile phones has been greatly improved compared to 3G. Therefore, watching live football broadcasts, TV series or live broadcasts of Internet celebrities through mobile phones has gradually become a part of modern people's life.

Looking ahead, global 5G is expected to enter commercial operation in 2019. Compared with 3G/4G which targets the needs of "people", 5G targets the needs of "things". It is expected that 5G will accelerate the realization of the Internet of Things, while bringing about new business opportunities and even promoting industrial transformation.

IoT application services 5G is more efficient

5G has high-speed transmission and low latency characteristics. The transmission speed is 100 times that of 4G, and the latency is one-tenth of 4G. Artificial intelligence (AI) technology combined with 5G will further enhance the capabilities of edge computing and even enable devices to have machine learning capabilities.

Currently, 5G is defined as three major application scenarios: the first is enhanced mobile broadband, which supports more efficient data transmission through improved network coverage and capacity, such as AR and VR, which require computing-intensive experiences; the second is to accelerate the application services of the Internet of Things, including smart homes, smart cities and other fields; the third is the key business services that are regarded as important growth areas for 5G, such as self-driving cars, smart factories, smart medical care, etc. Many of these service applications that were originally limited by speed and stability under 4G in the past can be put into practice with 5G.

Major industries benefiting from the base station supply chain

From an investment perspective, 5G is divided into several stages.

• ***, 5G equipment construction: base station supply chain, small base stations, RF components, network switches, etc. will be the main beneficiary industries;
• Second, after 5G is commercialized, the 5G mobile phone replacement trend will drive the mobile phone supply chain, especially chips and radio frequency will benefit from the increase in output value;
• Third, 5G drives the popularization of new types of business and more IoT: the growing demand for communication chips, edge computing chips and self-driving cars has led to growth opportunities for lenses, sensors, and discrete components, and the trend of smart cities and smart factories will bring greater business opportunities to industrial computer companies. More importantly, 5G opens up more imagination and possibilities for the future, and those "unimagined" applications may shape our future lives.