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Oppenheimer: Chipmakers preparing for arrival of 5G bandwidth

Sector players are ramping up efforts to make sophisticated systems on a chip to compete in the 5G era

Internet of Things illustration
Demand for NAND flash chips is also slipping, according to Oppenheimer

The world’s chipmakers are ramping up their efforts to make sophisticated systems on a chip (SoCs) for Internet of Things applications as a way to compete in the fifth-generation (5G) wireless network era, according to the “Daily Chip Clips” report by Oppenheimer analyst Rick Schafer.

Chipmakers are preparing themselves for the arrival of 5G as the bandwidth will be much bigger than 4G and support streaming content that couldn’t be aired before, Schafer’s analysis suggests.

Schafer describes the development of Internet of Things chipset solutions as a “warm-up game” for exploring the wider business opportunities that will surface after 5G application services start their commercial run in 2020.

“Since 5G communication technologies can integrate all communication products, applications and services, chipmakers must manage to build reciprocal cooperation ties with all the ecosystem partners including telecom operators, infrastructure equipment suppliers … software and services providers if they want to better tap the market for 5G chipset solutions,” wrote Schafer, citing an article in DigiTimes, the Taiwanese trade journal.

Another forecast from Oppenheimer's report is that the contract prices for NAND flash chips will slip further in the second half of this year as demand is unlikely to catch up with a glut in the supply of these devices.

Chip suppliers are still increasing their output of NAND chips due to “further improvement” in their 64- and 72-layer 3D NAND flash chips, writes Schafer. But demand for these chips is still likely to be weaker than expected in the third quarter, Schafer adds.

Cryptomining weighs on Gigabyte Technology

A final note from Schafer reports that a slowdown in cryptocurrency mining is weighing on tech company Gigabyte Technology (TWSE:2376)’s shipments of its graphics cards in the second quarter. 

Gigabyte reports that just 1 million graphic cards will be shipped in the second quarter, down from 1.2mln in the previous three-month period. The prices of graphic cards have also weakened on the fallout in demand.

Schafer’s “Daily Chip Clips” report was based on articles provided by DigiTimes, a Taiwanese trade publication focusing on the semiconductor, electronics and computer sectors.

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