From consumer cell phones and wireless networks to the technology arms race taking place between global superpowers, carriers are implementing 5G networks at breakneck speed. Behind the scenes, demand is growing for cheap, high-performing materials that will allow millions of devices to connect to these new high-frequency networks, according to a new report from Lux Research.
In “Materials for 5G: Opportunities in mmWave Substrates”, Lux Senior Analyst Anthony Schiavo details the rollout of 5G networks and technologies to date, identifies the unmet material needs for mmWave technology to enable millions of new devices, and reviews the current technology options and emerging alternatives, with a focus on innovative groups that are already beginning to tackle these challenges.
The report also forecasts the future market demand and expected market share for different materials as 5G networks continue to proliferate globally.
“Despite political headwinds, telecommunications giants, retailers, tech companies, and world governments have all embraced the promise of 5G technology,” Schiavo writes. “In order to meet this relatively new but rapidly growing demand, a separate materials arms race has emerged.”
Currently, liquid-crystal polymers (LCP), polyimides (PI), and polytetrafluoroethylene (PTFE) substrates are leading the way in this competition to meet high frequency demand. By 2030, Lux says the market for materials that can adequately meet these new 5G demands is likely to reach 14,000 metric tons (MT) of materials, totaling $2.3 billion.
mmWave-enabled cell phones will be the initial market for these advanced materials, Lux adds, but 5G infrastructure will become the largest source of demand by 2024.
Other Key Findings
According to Lux, other key points that buyers should keep in mind include:
- As 5G infrastructure rolls out, it will create demand for new materials for antenna substrates that can support high-frequency operation.
- Several materials, including liquid-crystal polymers (LCP), polyimides (PI), and polytetrafluoroethylene (PTFE), will compete with other emerging materials to meet this demand.
- The market size will reach 14,000 MT of material and $2.3 billion in 2030, with uses in mobile phones leading, followed by base stations; 5G infrastructure build-out picks up after 2023.
- LCP will be the leading material choice, but as volumes grow, falling prices for PI and scale for PTFE will lead to growing market share.
- In the longer term, other uses like automotive radar can create even greater demand for high-frequency materials, aided PI and PTFE further.
According to Lux, cell phones should initially take the most market share on the 5G front until about 2023; at this point this demand may level off as 5G achieves full penetration. The market for substrate in phones will increase quickly through 2023 to 5 kMT (kilo metric ton) added, and gradually increase to 6 kMT by 2030.
“5G-capable base stations begin to be rolled out in earnest in 2023, exploding to take by far the most market share through 2028,” Schiavo writes. “The market in base stations will peak at 8 kMT in 2026, dropping off afterward as 5G buildout slows as the demand increasingly comes from replacing base stations—falling to 6 kMT by 2030.”
Lux expects the market for substrate materials to remain competitive and says that will keep prices of materials tied to cost of production. The cost of PI and LCP, for example, will fall on an experience curve as production scales.
“We don’t expect substantial changes in PTFE prices,” Schiavo writes, “as these materials are already used in substantial volumes for automotive radar applications, and adoption of PTFE in mmWave is likely to be limited in the near term.”