5G, China's Story
Business implications of the looming wireless upgrade.
Striving to provide the global business community with valuable insights into China's technology sector, we closely follow the country's most innovative enterprises and track industry trends. A result of months of research, expert interviews and thorough analysis, this 75-page report is a one-stop solution for investors intending to bet big on the burgeoning local 5G ecosystem.
A ubiquitous headline story in 2020, probably next only to COVID-19 if measured by the magnitude of hype around it, the fifth generation of wireless (5G) is a complex phenomenon presenting a plethora of business opportunities across many industries.
China, a tremendous emerging economy, is putting heavy emphasis on technology-driven development. It has grown into the world's largest digital ecosystem, with countless business entities benefiting from its vast market.
There are two types of such enterprises. The first group enables connectivity through combining hardware and software on a large scale – we call it the technology layer. These companies provide an immense digital framework for players within numerous industries – the ones using wireless to reach their commercial goals, composing the application layer.
According to our projection, the technology layer will present at least USD 947 billion of 5G-related investment opportunities in China over the next five years. The terminal segment, the most apparent short-term winner of the wireless upgrade, will account for over 60% of the total.
Meanwhile, the absolute dominance of smartphones, which shaped the 4G era, will be challenged by various IoT-type devices.
Although the stationary equipment area is highly monopolized, many opportunities throughout the supply chain appear with 5G. For example, we expect the local base station optical module market to add an extra USD 8 billion to the total value of the 5G ecosystem in 2020-2025.
We estimate that the nationwide demand for data storage capacities will grow tenfold by 2025, creating over USD 126 billion of value in the data center field.
At the same time, stirred by 5G, the Chinese semiconductor industry, including contract manufacturers and OSAT companies, will add more than USD 231 billion to the value pool.
Due to the well-known hardware limitations and the constant mismatch between theoretical concepts and reality, it is challenging to quantify possible benefits 5G is going to bring to the application layer.
We distinguish five industries that will greatly leverage the new wireless capabilities in the following years:
► The consumer technology enterprises stand to gain from enhanced Mobile Broadband (eMBB), the first phase of 5G, per 3GPP.
► Firms operating in the fields of smart environment and industrial automation will mainly benefit from Ultra-Reliable Low Latency Communications (URLLC), the second stage of the 5G rollout.
► Automotive and healthcare companies are poised to win big from massive Machine-Type Communications (mMTC), the last phase.
EqualOcean: China's '5G concept stocks'
21Vianet Group (世纪互联) VNET:NASDAQ
Accelink (光迅科技) 002281:SZ
Aofei Data (奥飞数据) 300738:SZ
AtHub (数据港) 603881:SH
Baosight Software (宝信软件) 600845:SH
BOE (京东方) 000725:SZ
China Comservice (中通服) 00552:HK
China Tower (中国铁塔) 00788:HK
Comba (京信通信) 02342:HK
Dr. Peng (鹏博士) 600804:SH
DSBJ (东山精密) 002384:SZ
DTT (大唐电信) 600198:SH
Eoptolink (新易盛) 300502:SZ
FiberHome (烽火通信) 600498:SH
GDS (万国数据) GDS:NASDAQ
Hua Hong Semiconductor (华虹半导体) 01347:HK
InnoLight (中际旭创) 300308:SZ
Inspur (浪潮信息) 000977:SZ
JCET (长电科技) 600584:SH
Lenovo (联想集团) 00992:HK
Lens Technology (蓝思科技) 300433:SH
Maxscend Technologies (卓胜微) 300782:SH
Microgate Technology (麦捷科技) 300319:SH
Naura (北方华创) 002371:SZ
OFILM (欧菲光) 002456:SZ
Sinnet Technology (光环新网) 300383:SZ
SMIC (中芯国际) 688981:SH, 00981:HK
Sunway Communication (信维通信) 300136:SZ
Tatfook (大富科技) 300134:SZ
TCL Electronics (TCL电子) 01070:HK
Tongyu Technology (通宇通讯) 002792:SZ
Transsion (传音控股) 688036:SH
VeriSilicon (芯原股份) 688521:SH
Xiaomi (小米集团) 01810:HK
ZTE (中兴通讯) 000063:SZ, 00763:HK
Purchase the report and read more about these and other representatives of China's fledgling 5G business ecosystem.
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