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The Zacks Semiconductors - Radio Frequency industry participants are suffering from a challenging demand environment, primarily attributed to a suspension in capital spending by telecom carriers. Industry participants are suffering from a rise in commodity prices, persistent inflation and heightened global macroeconomic uncertainties. Nevertheless, players like RF Industries RFIL and Akoustis Technologies AKTS are benefiting from continued higher spending on the deployment of 5G networking and the rapid proliferation of the Internet of Things (IoT), Advanced Driver Assistance Systems (ADAS) and Augmented Reality/Virtual Reality devices. The growing need for faster connections, low latency, and efficient battery life in wirelessly connected devices has been driving the demand for WiFi-enabled hotspots. The democratization of 5G smartphones has been a tailwind for the industry participants.
Industry Description
The Zacks Semiconductors - Radio Frequency Industry comprises companies that provide radio frequency solutions, front-end modules, low-noise amplifiers, diodes, multi-chip modules, optical components, surface acoustic wave, bulk acoustic wave technology-based antenna-plexers and film bulk acoustic resonator filters to enable smartphone devices to function more efficiently in congested RF spectrum. They serve a wide array of industries with their solutions, finding ample applications in 5G and smartphone equipment, aerospace and defense, optical networks, cellular base stations, automotive and smart home applications. Most of these companies utilize robust wafer fabrication technologies, as well as ZigBee, Bluetooth Low Energy, Thread, silicon germanium and Gallium Nitride technologies, to stay ahead of the competition.
4 Trends Influencing the Prospects of the Semiconductors - RF Industry
Accelerated 5G Deployment is a Tailwind: The rapid implementation of 5G networking infrastructure and the robust adoption of cloud computing applications look promising for the wireless communication market. The coronavirus crisis-induced work-from-home wave has necessitated the need for higher bandwidth and triggered LTE advancements, which is expected to bolster the demand for RF power amplifiers. Increasing RF content in the latest 5G smartphones is a key catalyst. The growing demand for WiFi hotspots, as the number of wirelessly connected devices increases in households, is enhancing industry prospects.
Innovation Opening up Business Avenues: The rapid proliferation of IoT, wearables, drones, VR/AR devices, autonomous cars and ADAS is expected to drive the demand for RF semiconductor products beyond smartphone devices, favoring industry prospects. RF Semiconductors are setting the pace for technology modernization by digitizing aspects like connectivity, healthcare, transport and defense. The diversified utilization of RF Semiconductor products bodes well for the industry players. The evolution of semiconductor manufacturing processes from 10 nanometers (nm) to 7 nm, and even 5 nm and 3 nm technology, is anticipated to bolster the industry prospects. The rollout of bands and band combinations has led to considerable design challenges for OEM smartphone manufacturers. Industry participants are looking to address these challenges with a robust range of antenna-plexer portfolios utilizing the BAW technology.
Growing Adoption of Electric Vehicles Aids Prospect: Industry players are gaining from the increasing inclusion of their products in electric vehicles (EVs). The market for EVs is expected to expand fourfold by 2027.
Supply-Chain and Higher Commodity Costs to Hinder Prospects: The industry players are reeling under the impact of supply-chain constraints, as well as the ongoing Russia-Ukraine war. The volatility in prices of certain commodities like copper does not bode well for industry participants.