October 7, 2021
Taiwan contract manufacturer Pegatron is leading a wave of new vendors into the 5G gear market.
Pegatron and other Taiwan electronics firms like Compal, Keysight Technologies and Delta Electronics have seized on what they see as openings offered by private networking and O-RAN. The 5G private network market has the advantage of not requiring the huge-scale rollouts of public networks, while O-RAN lowers the entry barriers.
Just last week, Pegatron struck a partnership with Microsoft to build 5G basestations that link to low-Earth orbit satellites to deploy on rescue missions or in post-disaster scenarios, Nikkei Asia has reported.
The ambitious Taiwan firms have some official backing.
The Ministry of Economic Affairs says it aims to build a national 5G industry chain that be will globally competitive, starting off with small basestations, private networks and open RAN.
In June, Pegatron and Keysight, another contract manufacturer, unveiled a 5G basestation based on O-RAN specs, with a maximum downlink of 1.7 Gbit/s and uplink of to 400 Mbit/s. Their end-to-end solution deploys a network management system, also O-RAN compliant, funded and built by the government's Industrial Research Institute (ITRI).
Though new to the network equipment market, Pegatron is no minnow. After Foxconn it is Apple's biggest iPhone manufacturing partner. But the profits to be made from making laptops and smartphones for big brands are fast fading.
In the first half of 2021 Pegatron posted earnings of NT$11.7 billion (US$42 million) on revenue of NT$489 billion ($17.5 billion), with a gross margin of just under 4%. "The company has been looking for new growth drivers as the smartphone industry has peaked," an un-named executive told Nikkei Asia. "We see possibilities in the rising 5G market and the top management team fully supports the allocation of resources to catch these opportunities."
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Pegatron, which has been working on 5G since 2019, cites an IDC forecast that sales of 5G/LTE private networking gear will increase six-fold to $5.7 billion from 2019 to 2024.
Operators Chunghwa and FarEasTone have also been active in Taiwan's 5G networking plans, deploying private networks in Qualcomm and Delta Electronics plants respectively early this year.
Now FarEasTone has said it will work with half a dozen Taiwan firms, including Pegatron, Delta and Hon Hai subsidiary Fuhong.com to build a 5G private network RAN solution.
— Robert Clark, contributing editor, special to Light Reading
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