China Market Insider How the Chinese Chemical Industry wants to Profit from the 5G Boom
Which sectors of the chemical industry in China offer the greatest growth opportunities? Anyone pursuing this question will sooner or later come into contact with an idea that many people in China are downright obsessed with. ‘Overtaking the curve’ is the name of this idea. China Market Insider knows what this means and why China's chemical industry is hoping for the 5G boom.
Beijing/China – Overtaking the curve - this means the following: while China's economy has grown strongly in recent years, many high technologies are still dominated by large international corporations abroad. Semiconductors are a good example. While more than half of the global supply of semiconductors are built in China - in cars, mobile phones or electronic devices of all kinds - the most advanced computer chips in the 5-nanometre range still have to be imported to China from abroad.
Only where completely new technologies of the future are making a breakthrough, where a branch of the industry is being revolutionized, is there a chance for China to ‘overtake in the curve’ – think many Chinese managers and politicians.
Instead of playing a futile ‘catch-up’ with foreigners for years, China should be at the forefront of new technological developments. While everyone changes direction, China will pass by them like a skilled Formula 1 driver on the inside curve - or so the hope goes.
5G Really Takes Off in China
One such technology, from Beijing's perspective, is 5G. Eager to ‘overtake on the inside curve’ in telecoms, China is currently investing more in the rollout of its 5G network than anywhere else around the globe. By mid-2020, China had already deployed 700,000 new 5G macro base stations. There could be up to six million in total. At least 90 million users are already covered by 5G services - and a few hundred million are likely to become so.
This 5G boom, which has just begun, opens up extraordinary development opportunities for the 5G materials market in China, reports PROCESS (China). By 2020, the 5G industry in China has reached the stage of mass application, writes the chemical industry trade editorial, citing a market report by Roland Berger in China. "5G materials are hot," predicts the Chinese offshoot of the German consultancy.
The higher transmission speeds in the new 5G networks do not merely promise a new industrial revolution in areas such as IOT, livestreaming via mobile devices or in autonomous driving. These new technologies also require new, better applications in the areas of signal transmission and thermal management.
In the 5G transmitters, for example, which enable up to 100 times higher transmission speeds, completely new challenges also arise for high-frequency interference. New, particularly low-loss materials are needed. The same applies to the antennas in the new 5G mobile phones. Between six and nine, in some cases even more than ten antennas have to be accommodated in increasingly compact terminals in which the screen is getting bigger and bigger.
China's Chemical Industry on the Move
In China's chemical industry, market observers therefore see new growth opportunities for highly efficient plastic materials such as polycarbonate materials or dual-injection rubber coatings that can cope with the new 5G requirements. The trade portal China Plas Online sees BASF, Dupont, Sabic, Covestro, Sumitomo Chemical, Lotte, Fanuc, as well as the chemical groups Haitian International, Guangdong Yizumi, Chen Hsong and Changzhou Jwell as being ideally positioned in this market.
One example of the new ‘5G materials’ is polytetrafluoroethylene (PTFE), which some Chinese engineers call the "king of all plastic materials". It is predicted to experience a boom in demand in China. "PTFE will gain new market opportunities thanks to its outstanding physical and chemical properties and bring growth to its manufacturers as the 5G industry develops," writes the Chinese trade medium CN Chemicals.
PTFE is a fluoropolymer with particularly good thermal insulation, is especially corrosion-resistant, flame-retardant, of high optical transparency and at the same time particularly water-repellent - all properties that are desperately sought for the new high-performance mobile phones and base stations in a fully networked 5G world.
PTFE is increasingly being used in high-frequency copper plates, double cores for radio frequencies, for antenna filters in base stations and other components of 5G networks, writes CN Chemicals. The material is also needed for the latest ‘dry’ power battery applications from Tesla and other e-car manufacturers.
Here, too, there are good to excellent sales opportunities in the medium term for foreign chemical companies such as Dupont, Arkema or the Japanese firms Daikin, AGC and Kureha Ecology Management, say insiders. At present, China already produces 40 per cent of the world's PTFE, but it’s relatively of low quality. The market leader in China, the Dongyue Chem Group, alone has a market share of one third, writes the Qianzhan Institute for Industrial Research in Beijing. High-quality PTFE for special applications, on the other hand, is still imported. Last year, 160,000 tons of PTFE were produced in China, the Qianzhan study continues. "The demand for PTFE will continue to increase in the future," the Qianzhan analysts predict.