It is now crystal clear that the worldwide rollout of the 5th generation of cellular networks is strongly catching up last year’s Covid-19 induced slowdown.
Despite many closed retail locations, Apple was able to grow its iPhone line by 17% year-over-year in Q4, with customers rushing to buy its latest 5G enabled models.
Skyworks, a radio-frequency (RF) semiconductor specialist, printed even more impressive results yesterday. The company – which serves customers like Apple and Chinese smartphone brands such as Oppo, Vivo or Xiaomi – reported record Q4 revenue, with an annual growth rate of 69% year-over-year, 40% above consensus and marking a sharp inflection after the 16% growth reported in the previous quarter. Skyworks is benefiting from the increased content of RF filters in 5G smartphones as well as market share gains from its customers due to Huawei’s blacklisting.
Finally, Mediatek, the world’s second largest wireless modem chip designer, grew its revenue by more than 49% year-over-year and forecasts a huge acceleration with a doubling of 5G smartphone shipments this year.
These results and, more importantly, the given outlooks are clearly marking an inflection point in the widespread rollout and adoption of 5G based technologies. All the companies mentioned above are pointing towards an acceleration at the telecom and data center operators’ level and at hardware manufacturers which are integrating these new wireless standards into their devices (smartphones, tablets, smart watches, laptops, drones, cars…).
The 5G and the WiFi 6 standards are offering a formidable multi-year upgrade cycle opportunity for chip makers specialized in mixed-signals, radio-frequency and silicon photonics.
Our Smart Connectivity certificate is tilted towards these specialists, making up more than half of our portfolio’s allocation. These companies will be the main beneficiaries of the rollout phase which just barely started as the global penetration of 5G (and WiFi6) is still well below 10%.
By Olivier Good & Brice Mari
