Positioning the Electronics Sector for Post- 4G

By Jens Kastner

First-generation mobile telecommunication (1G) was analog, 2G was digital, 3G provided mobile data communication and web-browsing, and now 4G’s faster speeds make video streaming easy and convenient. Although 4G was only recently launched in Taiwan, already the industry is looking ahead to the next generation of mobile data transmission: 5G.

At this point, what 5G might actually encompass remains undefined, as no standards have been adopted. But what it is intended to do is clear – provide the connectivity to drive the Internet of Things (IoT) that is being widely touted as the next big revolution in technology.

According to the technology website Techopedia.com, IoT is “a computing concept that describes a future where everyday physical objects will be connected to the Internet and be able to identify themselves to other devices.” Potential IoT devices range from the mundane – like a thermostat that communicates with a cellphone or car to adjust the home temperature before the homeowner arrives – to such extremes as a driverless car that can maintain its position by exchanging data with the roadway it drives upon.

Prerequisites for the realization of IoT are sensory technology that allows for data collection, computational ability to make use of this data, and network connectivity that will enable these systems to communicate. 5G wireless networks will enable these connections, supporting “1,000-fold gains in capacity, connections for at least 100 billion devices, and a 10 Gb/s (Gigabytes per second) individual user experience capable of extremely low latency and response times,” according to 5G: A Technology Vision, a position paper by Chinese telecom equipment and manufacturing company Huawei.

5G and the expansion of the Internet of Things (IoT) will bring faster speeds, huge strides in reliability and the integration of different communication technologies. As far as Taiwan is concerned, it also promises lots of new devices which Taiwan, with its strong electronics manufacturing sector, seems to be well positioned to tap into.

Kuang Chiu-huang, an assistant professor at National Cheng Kung University (NCKU)’s Institute of Telecommunications Management, observes that while R&D centers owned by technology giants such as Google and Amazon will likely stay in the United States, OEM and ODM manufacturing of devices will potentially take place in factories in Taiwan or Taiwan-invested plants in China.

The government-affiliated Industrial Economics & Knowledge Center (IEK) of the Industrial Technology Research Institute (ITRI) plays a prominent role in crafting Taiwan’s national roadmap for the electronics sector. Although the Hsinchu-based institute sees no single IoT device outstripping the mobile phone in the next ten years, it predicts the whole spectrum of IoT devices by 2020 to together create about five times more sales in units than the mobile phone. Stephen Su, General Director of IEK, adds that Taiwan’s ICT manufacturers, such as MediaTek and Taiwan Semiconductor (TSMC), are also investigating market and technology trends in the IoT.

Su sees the IoT as an opportunity for Taiwanese electronics manufacturers to reposition themselves further downstream. “We advocate venturing toward the consumer space where Google and Amazon already are, while not forgetting our hardware design and manufacturing competences,” he says. He recommends that Taiwan focus on niche segments, such as healthcare services and retailing logistics, where the island already is strong.

Su urges Taiwanese electronics companies to take a close look at developing remote fitness devices and diagnostic tools involving traditional Chinese medicine (TCM) and the Chinese lunar calendar, as Western rivals would not easily get involved in those areas. “China has a quarter of the world’s population, and among these people the trust in TCM and the lunar calendar is overwhelming,” Su says.

As for other opportunities for Taiwanese companies, NCKU’s Huang points to “small cells,” in which Taiwan is already expected to gain an impressive 21% global market share this year, according to ITRI.

Small cells are mini cellular signal transmitters that can serve as “signal enhancers” and “network extenders” to fill in gaps in mobile coverage. Unlike base towers that are built atop mountains and buildings and beam cellular signals for kilometers around, small cells are integrated into buildings and rooms and beam signals only in that local proximity. Small cells work by routing traffic from the mobile carrier’s network via a local internet connection. As the bandwidth that cell signals depend on is finite, small cells are considered vital in enabling the proliferation of connected devices without overwhelming bandwidth capacity.

“While 4G data goes from the phone to a base station to the central terminal, in 5G it will be from the phone to a cloud made up of many small-cell base stations,” Huang explains.

Meanwhile, Su says that IoT devices will feature computing capacity, storage, and data-transfer functions, with sensors certain to play much more of a role than they do now. “Given that the mobile phone will still be the hub, there will be some applications where your IoT product will have all these functions, and there will be some that will simply be sensors without much computer or storage but linked to a data center or the cloud,” he says.

Taiwan already performs well in manufacturing all of these components, particularly sensors, and should be able to reap significant benefit as the IoT evolves.

 

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