Chinese and European suppliers of base station equipment are expected to once again account for a global market share of more than 70% in 2021, and the top three suppliers (along with their respective market shares) are, in order, China-based Huawei (30%), Sweden-based Ericsson (23%), and Finland-based Nokia (20%), according to TrendForce’s latest investigations. Remarkably, although Huawei remains banned by the US government, the company still manages to dominate its competitors in terms of market share due to its products’ cost advantages as well as the enormous demand from the domestic Chinese market.
It should be pointed out that Samsung has similarly benefitted from its relatively low costs and successful 5G commercialization efforts, both of which helped propel its market share this year to 12.5% and secure the fourth place in the global ranking. Not only is Samsung supplying base station components to the three largest mobile network operators in Korea, but it is also collaborating with operators in the US (including AT&T, Sprint, and Verizon) while having established supply agreements with NTT DoCoMo in Japan. On the other hand, Japanese supplier NEC has received its first ever overseas orders this year, from British mobile network Vodafone. Japan-based Fujitsu, likewise, has also been chosen by the British government as an alternative supplier of 5G base station equipment in place of Huawei.
TrendForce indicates that the proliferation of distance learning and WFH applications has brought about a massive 40% increase in average global network bandwidth consumption as the world works to bring the COVID-19 pandemic under control. As such, the 5G network is able to satisfy the current market demand due to its high bandwidth and low latency characteristics. Furthermore, as 5G commercial demand rises in various countries, the GSA (Global mobile Suppliers Association) announced that “the number of announced 5G devices has surpassed 800 for the first time and now stands at 822 announced 5G devices”. These products, including both consumer and enterprise applications, have been released in response to the demand for faster, more convenient network connections across a broad range of applications. In sum, all of the aforementioned factors are drivers of increased 5G base station build-out worldwide.
Key to Huawei’s market share leadership, 5G users in China account for 90% of the global total in 2021
Owing to the ongoing China-US trade war, both Huawei and the three largest mobile network operators in China have been barred from engaging in investment-related activities with US companies. In addition, in July 2021, the FCC (Federal Communications Commission) finalized a US$1.9 billion plan that subsidizes domestic telecom companies to replace base station components from Chinese suppliers, such as Huawei and ZTE, that the FCC considers a potential risk to US national security. Huawei and ZTE have subsequently become unable to acquire key RF front-end components from US suppliers, thereby prompting Huawei to shift its base station infrastructure business towards the domestic Chinese market instead.
Regardless, TrendForce’s findings indicate that, as of late-2020, the number of 5G users in China surpassed 160 million, which represented about 89% of the global total. As of July 2021, the three largest mobile network operators in China, including China Mobile, China Unicom, and China Telecom, have established 916,000 5G base stations domestically, which comprise 70% of the global total. Not only does this number point to the impressive magnitude of the Chinese telecom market, but it has also been the key to Huawei’s leadership in the base station market for nearly two years.