Surging 5G Phones... "2021 Could Highlight Telecom Equipment and Components"

[Asia Economy Reporter Oh Ju-yeon] SK Securities stated that ahead of the US presidential election, both candidates Donald Trump and Joe Biden share a common pledge to promote the construction of 'ultra-high-speed wired and wireless networks' across the United States, and predicted that 5G penetration rates will significantly increase, focusing on North America, Northeast Asia, and Western Europe. They analyzed that the subscription speed will be faster than the early 4G in 2009, expecting benefits for related industries.

According to SK Securities on the 20th, 5G phone shipments surged from 19 million units in 2019 to 250 million units in 2020. The rapid sales pace of 5G phones despite still insufficient infrastructure is analyzed to be due more to price than differences in speed and performance.

The average selling price (ASP) per 5G phone subscriber has dropped to around $400, and in China, 5G phones priced in the $100 range have been released. This indicates that the price advantage is significant.

Conversely, the burden on manufacturers regarding component costs may increase, but SK Securities emphasized the need to focus on indispensable components in 5G phones.

Researchers Lee Dong-joo and Na Seung-doo of SK Securities said, "We expect North America centered on the United States, Northeast Asia centered on South Korea, and Western Europe including the UK, France, and Germany to drive 5G growth," adding, "2021 is expected to be a year when both telecommunications equipment and components can be highlighted together."

In telecommunications components, they predicted significant benefits for RF and antenna-related parts due to the surge in 5G phone shipments. They presented 'BH' as the top preferred stock for 5G antenna cable FPCB and 'Wi-Palm' for PA (power amplifier) among RF components.

In telecommunications equipment, they emphasized attention to 'Seojin System,' expected to serve as a barometer for the telecommunications equipment market, and 'RFHIC' and 'Oi Solution,' regarded as core vendors of domestic telecommunications equipment companies.