China's mobile phone shipments in April indicate rising demand for electronic metals, with adoption of 5G beginning to ramp up after Covid-19 disruptions.
Chinese shipments of mobile phones increased by 14.2pc year on year to 41.7mn units in April, data from the China Academy of Information and Communications Technology show — the strongest month since 2017. Around 39.3pc, or 16.4mn, of the units were 5G phones, up from 29pc in March.
Shipments are recovering from a low base, having dropped by 56pc year on year in February — at the height of China's lockdown — and by 23.3pc in March. "This more solid result confirms that the rollout of 5G has begun in earnest," analysts at Bank of Montreal (BMO) said. The transition to 4G took around a year, the analysts noted, and a similar timeframe is likely before 5G sales increase to at least 90pc of phone shipments.
The new generation of phones require high-efficiency power amplifiers that run on gallium arsenide or gallium nitride. And the need for increased power to run new applications enabled by 5G is prompting firms to manufacture larger lithium-cobalt batteries. For example, Apple's iPhone 12 model has a 4,000 milliamp hour (mAh) battery, compared with the 1,800mAh battery in an iPhone 8, the BMO analysts note. "This may offer a significant boost for cobalt, with mobiles currently accounting for around 35pc of consumption."
South Korea-based Innowireless, which manufactures telecommunications test and measurement equipment, reported a 41.9pc increase in its first-quarter sales on increased 5G investment. Its Accuver Shanghai subsidiary, established in 2019, is poised to ramp up operations this year. Expanding investment in 5G networks in Japan, the US and Europe is expected to drive the market in the second half of 2020, after delays to equipment deployment in the first half caused by coronavirus lockdowns.
In another sign that network deployments are gathering pace, China's Huawei has formed a partnership with 18 car companies in China — including BYD, BAIC, Dongfeng and Great Wall Motors — to accelerate commercialisation of 5G technology in the automotive industry.
BYD will launch its Han electric vehicle model in June with Huawei's HiCar 5G system, its first commercial deployment. HiCar enables vehicle-to-everything (V2X) communication between the vehicle and other connected devices, allowing drivers to not only control car features from their 5G phones, but also interact with traffic lights, cameras and other vehicles.
The sensors that enable V2X communication use silicon-germanium (SiGe) compounds, and demand for SiGe has accelerated rapidly since the end of 2019, driven by optical fibre communication used in 5G infrastructure. Israel-based Tower Semiconductor could surpass its highest quarterly SiGe shipments within the next few quarters, the semiconductor foundry said in its first-quarter report. The company's analogue integrated circuit business reported strong growth with the rollout of 5G phones that use its chipset components.
