5G requires Gigabit speed spanning multiple spectrums from 1GHz to millimeter-wave, two areas where Qualcomm excels. Since 2015 and accelerating in 2Q16, Qualcomm has observed that the initial launch of 5G is being pulled in from 2020 to 2018-2019, depending on the deployment.
We believe that 5G would help Qualcomm widen its technology gap with Mediatek again, while Mediatek is reducing its gap with Qualcomm in 4G. Meanwhile, expect 5G to drive the next semiconductor cycle for smartphone replacement and a large number of base stations at high frequency spectrum.
TSMC should be a key beneficiary of the incremental demand for high-performance semiconductors in 5G smartphones and
base stations.
