The Impact of the Top 3 Strategic Imperatives on the 6G Semiconductors Industry

Disruptive Technologies

• Why: The next-generation (next-gen) wireless technology, 6G, will tentatively operate at high frequencies (more than 100 gigahertz (GHz) and support 1 terabit per second (Tbps) data rates with much lower latency (10.1 milliseconds (ms) than 5G networks). These improvements offer 100 to 1000 times in efficiencies over current 5G networks.
• Moreover, 6G will represent the dawn of a new era where networks will move from enabling connected things to cognitive intelligence.
• Frost Perspective: Because 6G promotes joint communication, computing, and sensing, customer power on the (including in and desired) gains significance. The 6G ecosystem will introduce innovative, AI-powered distributed learning. Therefore investments in AI for edge computing will be crucial.

Geopolitical Chaos

• Why: To meet 6G operational targets, the semiconductor industry requires scaled-up production of next-gen semiconductors that use miniaturized transistors smaller than existing sub-5-nanometer (nm) transistors to deliver the required performance.
  Manufacturing products in the sub-3 nm nodes at extreme ultraviolet (EUV) and other process tools at the center of U.S. trade sanctions, which means China’s ability to acquire EUV will be curtailed.
• Frost Perspective: Based on the status of U.S.-China trade sanctions, the United States will be the leader for 6G in the next decade, and chip production is likely to stay concentrated in the U.S. and allied nations. States using 6G in the RF and AI spaces due to their semiconductor prowess will also round out their technology control network.

Internal Challenges

• Why: The skill shortage widely impacts the semiconductor industry by increasing time-to-market and cost issues across design and manufacturing processes. Because 6G has scheduled launch in 2030, billions of end devices must be 6G-capable, which requires semiconductor engineers to design systems on a chip (SoCs) and RF front-end modules (FEMs).
  If the industry does not shorten the time-to-market and lower the design costs, the skill shortage will compound.
• Frost Perspective: Overcoming a skill shortage with software (SW) solutions is not a new approach. Engineers need to amend FDA solutions to work across 6G design and manufacturing processes. A design automation approach with AI-enabled systems can alleviate critical skills gaps and allow suggestions across design areas; enabling systems must automatically update to integrate different processes and yield issues stemming from design iterations.

Growth Drivers

6G Semiconductors: Growth Drivers, Global, 2024–2033

Driver

• Semiconductors will be necessary to develop 6G wireless technology across RANs and the edge, leading to advanced semiconductor devices and, therefore, new sales because 6G systems’ bill of materials will change: The rapidly increasing number of connected devices and growing data volumes indicate that 5G wireless networks will run out of capacity by the end of this decade. Therefore, initial discussions, planning, and research to develop next-gen wireless technology (6G) have begun. Semiconductors, specifically AI processors and RF FEMs (semiconductor components that enable wireless communication) will find high demand in enabling 6G technology from RAN to the edge (including end devices).
• Semiconductor device manufacturers must develop advanced components that utilize leading-edge process nodes and new materials to deliver 6G's performance requirements. Therefore, 6G's new technology requirements will drive sales of new semiconductors.
• Sustainability requirements will drive performance requirements and increase the average selling price of semiconductors for 6G: The growing demand for green energy and energy efficiency propels the demand for improved semiconductor performance in 6G, leading to R&D for existing CMOS platforms and devices based on new materials and manufacturing technologies.
• The emergence of new applications and use cases will drive the need for more semiconductors: Holographic communication, advanced XR/virtual reality (VR)-based communications, and Level 4 (L4)/Level 5 (L5) autonomous vehicles (AVs) are some of the applications that will drive the need for near-zero latency and intelligence services, which require next-gen semiconductor devices with joint communication, computing, sensing, and control capabilities. These applications will drive the development of advanced SoCs with AI capabilities and next-gen RF components, driving autonomous learning and control at the edge and decreasing data transfer to 6G RANs.

Growth Restraints

Spectrum Sharing: 6G wireless technology will be a service enablement network that emphasizes delivering reliable, high-speed, intelligent services for next-gen applications, such as autonomous vehicles and smart cities. These use cases have several incumbent users in some of 6G’s frequency bands, and moving those users through new spectrum auctions will be expensive. The industry is exploring innovative spectrum-sharing solutions to get directions in the initial phase of research, but, until then, research progress will find many challenges.

Capital Expenditure: The global telecom market was in decline and it remains so, which directly impacts equipment vendors’ CAPEX budgets and revenue realization opportunities. As a result, ROI for current 5G technology is lagging. This will affect the re-evaluation of research investments in 6G. The global realization of 6G will require new base stations and infrastructure. Therefore, developing high ROI applications is an important case to make to investors.

Cybersecurity: Cybersecurity threats increase every year, and so does the economic loss stemming from these issues. Network resiliency to cybersecurity threats decreases with greater network complexity. 6G entails a multi-fold increase in network complexity and multi-vendor scenarios will become the norm. Threats will, therefore, increase exponentially. The efforts spent in finding ways to solve cybersecurity issues will hamper short-term research progress.

Health Hazard: There is no clear solution to the ill effects of high-frequency radiation (100 GHz to 3 THz) on humans and animals. Identifying potential technology candidates to mitigate those issues and incorporating them into research will consume time and resources, slowing research progress.