With growing pressure to keep China’s Huawei Technologies Co (華為) out of 5G network development, it could be time for firms like Japan’s NEC Corp and South Korea’s Samsung Electronics Co to shine, analysts have said.
Washington has already pledged to cut the firm out of the most sensitive “core” elements of 5G that access personal data, and is now reportedly pushing for plans to end Huawei’s involvement in Britain’s 5G infrastructure by 2023.
Excluding Huawei is not without challenges, because there are currently only two alternatives in Europe for 5G equipment such as antennas and relay masts: Finland’s Nokia Oyj and Sweden’s Ericsson AB.
Photo: AFP
Britain has encouraged Washington to form a club of 10 democratic nations that could develop its own 5G technology, but there has been little movement so far.
“The vast majority of the commercial networks sold in the world come from the big three,” BearingPoint head of telecoms Sylvain Chevallier said, referring to Huawei, Nokia and Ericsson.
“But a world of three is not good for operators, and if it goes down to two it will be worse still,” he said.
That leaves a tempting potential opening for firms like Samsung and NEC, but building a successful 5G network is no simple task.
That is a lesson Samsung has already learned. Despite being a major player in 3G, it found itself unable to compete with the big three on 4G and struggled to win commercial contracts.
“This has been a challenge for Samsung,” said Daryl Schoolar, a mobile technology specialist at consulting group Omdia.
In building its 5G network, Samsung has so far focused on North America and parts of the Asia-Pacific region.
“So while operators may feel uncertain about Samsung Networks, they are much further along in the process of being a global presence than NEC,” Schoolar said.
NEC does have some advantages, including a partnership in Japan with mobile operator Rakuten Inc.
The firms have already cooperated on a 4G network and are jointly developing a 5G system.
The Japanese firm is also a leader on undersea cables, fiber optic networks and — thanks to its affiliate Netcracker Technology Corp — logistics management software.
“Netcracker has a strong presence with operators in Europe, which could be a real entry point for NEC,” said Stephane Teral, chief telecoms analyst at LightCounting, a market research firm.
NEC is tight-lipped about its contracts for mobile networks, saying only that it is holding feasibility demonstrations for “a number of customers and we are engaged in commercial discussions with others.”
Britain’s government has reportedly asked both NEC and Samsung to take part in demonstrations as it looks to diversify its 5G options.
On Thursday, NEC announced a tie-up with Japanese operator NTT Docomo Inc, intended in part to speed up the development of a 5G network.
Samsung and NEC joined forces two years ago and have launched a joint marketing team to offer 5G products to European and Asian markets.
Still, the path ahead would be tough, Schoolar said.
“I think it’s a major challenge for NEC. It requires more than radios, it requires investing in people who can do system integration, sales, customer support, network design and engineering,” he said.
“Plus, NEC will need to build operator trust that they will be there to support them in five to 10 years as those 5G networks evolve,” he added.
Washington has backed the use of nonproprietary technology such as Open RAN in 5G development, hoping it would provide an entry point for US firms.
Such a move would open up opportunities for NEC, allowing them to “create an economic model that would shake up traditional equipment manufacturers,” Chevallier said.
CHIP HANG-UP: Surging memorychip prices would deal a blow to smartphone sales this year, potentially hindering one of MediaTek’s biggest sources of revenue MediaTek Inc (聯發科), the world’s biggest smartphone chip designer, yesterday said its new artificial intelligence (AI) chips used in data centers are to account for 20 percent of its total revenue next year, as cloud service providers race to deploy AI infrastructure to meet voracious demand. MediaTek is believed to be developing tensor processing units for Google, which are used in AI applications. While it did not confirm such reports, MediaTek said its new application-specific IC (ASIC) business would be a new growth engine for the company. It again hiked its forecast for the addressable ASIC market to US$70 billion by 2028, compared
Motorists ride past a mural along a street in Varanasi, India, yesterday.
MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it plans to double investment in data center-related technologies, including advanced packaging and high-speed interconnect technologies, to broaden the new business’ customer and service portfolios. The chip designer is redirecting its resources to data centers, mainly designing application-specific integrated circuits (ASIC) with artificial intelligence (AI) capabilities for cloud service providers. The data center business is forecast to lead growth in the next three years and become the company’s second-biggest revenue source, replacing chips used in smart devices, MediaTek president Joe Chen (陳冠州) told a media event in Taipei. “Three or four years
AT HIGH CAPACITY: Three-month order visibility on stable customer demand would push factory utilization to between 80 and 85 percent, Vanguard’s president said Foundry service provider Vanguard International Semiconductor Corp (世界先進) yesterday said it is unable to fully satisfy surging demand for chips used in artificial intelligence (AI) servers and data centers, amid an AI infrastructure investment boom that is crowding out production of less advanced chips. Vanguard is facing an “undersupply of chips” made using mature process technologies, due to strong demand for AI products and improving demand from customers in the commercial, industrial and auto sectors, which are digesting excess inventory to a healthier level, company chairman Fang Leuh (方略) told a virtual investors’ conference. However, Vanguard gave a more conservative view on
RSS