Fifth-generation networks, with speeds 100 times that from existing 4G networks, launched in the U.S. and South Korea this year. The global market for 5G gadgets, like for example surveillance cameras and drones, could top the equivalent of $241 billion in 2023, in line with the Fuji Chimera Research Institute.

 

To catch up expanding demand, Sumitomo Electric Industries will invest 20 billion yen ($184 million) by 2020 to double capacity for antenna parts at Yamanashi Prefecture processing facilities. Made of gallium nitride in the place of the more traditional silicon, the products will likely need significantly less electricity and allow for smaller, cheaper base stations. Clients include Ericsson and Huawei Technologies.

 

Rohm has developed new power semiconductors used to switch 5G bases on and off. They are half the size of present models and can reduce electricity losses to 3% from 7%. Sample shipments will begin as soon as the autumn of 2020. Murata Manufacturing plans to invest at least 10 billion yen over two to three years to develop capacity for 5G smartphone parts. It has a nearly 50% share in LC filters, which pick out signals from certain frequencies.

 

''The 5G smartphone market will grow 20% to 30% a year for the next two to three years,'' Senior Executive Vice President Norio Nakajima said.

 

Others are looking at acquisitions. Kyocera plans by December to take a 51% stake in Ube Electronics, which has fashioned ceramic filters for use in 5G bases. Mass production as early as 2020 is the objective. In the meantime, Advantest is betting on the 5G boom to lift demand for its chip-testing equipment. April-June orders for its system-on-a-chip testers maxed initial projections by roughly 15 billion yen.

 

''As products become more advanced, demand for testing equipment grows,'' an Advantest executive said.

 

Nonetheless it is not unusual for front-runners to fall behind when an industry experiences extensive change. Huawei is building its own 5G chips and mobile operating system amidst the U.S. campaign to blacklist the company. Domestically sourced components could provide an alternate to Japanese parts. Japanese companies fell behind the pack in smartphones and other finished products because they failed to precisely forecast where the market was headed. 5G poses the next test of their relevance.

 

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