While the establishment of 5G infrastructure, particularly base stations, in China has been slowing down in the wake of the COVID-19 pandemic and the US-China trade tensions, 5G deployment projects in Europe, North America, Japan, and South Korea have been accelerating and could become the key growth driver of the 5G industry in 2022, according to sources from the upstream supply chain.
According to data from China's Ministry of Industry and Information Technology (MIIT), a total of over 650,000 5G base stations were established in China in 2021, accounting for over 60% of the worldwide number of installations, but far less than the supply chain's original anticipation of 0.8-1.0 million units.
China is now expected to complete the construction of 3.64 million 5G base stations by the end of 2025. With China so far only having finished 1.425 million units, it will need to build another 2.215 million units over the next four years (2022-2025) with an average of around 550,000 units a year, a dramatic decrease from the pace of the previous years.
5G base stations require significantly more electrical power than 4G stations do, and thus, although non-Chinese markets are expected to speed up their 5G infrastructure deployment in 2022, some upstream suppliers believe the extra electricity requirements may eventually slow the deployment of 5G outside China.
The sources believe the global trends of carbon neutrality and power saving will become key obstacles to 5G infrastructure deployment. The high costs from related construction may be hard to justify if consumers do not value the greater speed of 5G much more than the limited speed of 4G.
The sources pointed out that currently, most telecom carriers are waiting for other enterprises to come up with 5G applications, while the telecom carriers slowly deploy 5G infrastructure.