Innovation in wireless technology leads to faster and smarter networks. 5G and the Internet of Things (IoT) have the capacity to connect everyone and all machines. In this post, we will explain how 5G implementation will enable new advances and challenges in the optoelectronics packaging industry.
The 5G Implementation And Its Effects
This exponential explosion in capacity and speed is highlighted in Thomas L. Friedman’s new book, Thank You For Being Late. As he states, every computing device has five basic components: the integrated circuits, the memory units, the networking systems, the software applications, and the sensors. Further development of these components is necessary to enable the IoT to happen, especially 5G networks and advanced sensors. It is clear that these changes are happening now. The 5G implementation rollout is estimated to occur by 2020. Advanced sensor technologies are going through a transformation led by the semiconductor industry, which will, in turn, have ramifications for optoelectronics packaging.
Learn About The Optoelectronics Packaging Industry
The optoelectronics packaging industry has developed unique sensor applications, which are key to the IoT landscape. Smaller objects can be connected to the power of 5G through new applications. In optoelectronics packaging, there is enormous potential to capitalize on the future evolution of 5G and expand the capability to link devices. “IoT is anticipated to be a major engine of growth over the next five (5) years. Volumes are expected to rise from 10 billion devices in 2015 to 50 billion in 2020. IDC predicts that the global IoT market will grow at a rate of 17.5% from $1.9 trillion in 2013 to $7.1 trillion in 2020.”1 With this rapid growth, there are many challenges, such as infrastructure, standardization, and security risks that coincide with the optoelectronics packaging industry expansion.
These new more technologically advanced sensors have found many application markets including, automotive, MEMS, wireless, and IoT. PwC states, “Total sales of US$336 billion in 2014 saw the global semiconductor industry once again achieve record sales, growing 9.9% over 2013’s record US$306 billion. Several semiconductor application markets stood out in 2014. Data processing was the largest market by sales, reaching US$134 billion in 2014, a 12.8% increase from 2013. The communications and automotive markets have shown particular strengths, driving growth in 2014 which is expected to continue in coming years. Annual sales in almost all regions have shown sustained growth, with Asia-Pacific continuing to grow in importance. In terms of installed semiconductor components, logic integrated circuits (ICs) was the largest category, with sales reaching US$90 billion in 2014, a 6% year-on-year increase. Memory was the fastest growing category, seeing an 18.2% annual increase. Another remarkably fast-growing category was sensors, achieving sales of US$9 billion in 2014, an 8.2% annual increase. We expect sensors to see the highest growth rate, with a CAGR of 10.4% from 2014 to 2019. The IoT is the next growth engine for the semiconductor industry, particularly for the sensor, communications, and industrial segments.”2
With these 5G developments, it is clear there will be a significant impact on how things are connected and how consumers all over the world interact with them day by day in the future. The growth of 5G and IoT is an enormous opportunity for the optoelectronics packaging industry. As more machines are becoming connected with the advances in digitalization there will be increased demand for semiconductor products, which will, in turn, add challenges to and drive the growth of the optoelectronics packaging industry.
Recently Paul Teich, principal analyst at Tirias Research, emphasized when designing for the IoT “that the ‘I’ in IoT means the product is not standalone. When you are making decisions about what to put in the product, you have some local decisions and you have the cloud behind you that provides access to a deeper context. Your competitive arena is that everyone is going back to the cloud to do data collection, analytics and draw some kind of pattern-level conclusion about the data you are gathering from your IoT sensor.”3
Overall when designing products for the IoT, optoelectronics packaging manufacturers must consider the big picture and how the machines align on a larger scale within the IoT ecosystem with respect to optoelectronics packaging designs.
One of the primary growth factors in the optoelectronics packaging industry is the rapid increase in the number of technologies or electronics like smartphones and tablets, which leads to increased mobile data traffic worldwide resulting in the requirement for higher internet speeds through the fiber-based broadband internet. As there is increasing demand for data transmission from cloud-based applications used for data centers for internet-based technology companies, such as Google and Facebook, it is clear the optoelectronics packaging industry will evolve to meet the massive demand for data transmission. There are demands from Telecom and Datacom (Data Center) applications on the optoelectronics packaging industry because of the need for increased electronics and data transmission speeds.
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Discover Optoelectronics Packaging With MRSI Systems
In the Global Optoelectronics Market 2017-2021 Report overview, “Technavio’s market research analyst predicts the global optoelectronics market to grow at a CAGR of close to 17% between 2017 and 2021. The emergence of IoT across all applications including electronics, software, sensors, and network connectivity, is a major trend gaining significance in the market. With the growing use of devices that have a link because of IoT, the bandwidth requirements have also increased significantly….With high internet connection speed, several vendors are focusing on the development of IoT for various applications, resulting in the high demand for optoelectronics in the coming years.”4
This increased demand for machines that require optoelectronics packaging has resulted in the evolution of the market to be able to adapt to the changing optoelectronics packaging industry requirements. As the world of optoelectronics packaging expands it must be able to scale quickly to accommodate these new demands. Learn more about how you can scale your optoelectronics packaging with MRSI Systems.
Learn more about these optoelectronics packaging industry market drivers in our overview here.
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1Meptec
2PwC Report: The Internet of Things: The next growth engine for the semiconductor industry
3Semiconductor Engineering: Is Design Innovation Slowing?
4Global Optoelectronics Market 2017-2021