Analysts say the conflict between the U.S. and China is providing Samsung with an opportunity to expand its share in 5G market.
The Wall Street Journal (WSJ) reported that “the geopolitical conflict is giving Samsung, the world’s fourth-largest 5G telecommunications equipment maker, a huge opportunity to expand its presence in the global market”. Adding that Samsung is investing billions of dollars in the telecommunication equipment sector. The U.S. and the U.K. have excluded Huawei from their 5G network construction projects one after another. And other European countries have considered similar measures. Therefore it results in Samsung benefit from the reflections.
According to market research firm Dell’Oro, Samsung’s 5G market share is 13%, ranking fourth after Huawei, Ericsson and Nokia. But with leading Huawei likely to be ousted from Europe after the U.S., Ericsson and Nokia could in turn be the target of China’s retaliation. The WSJ recently reported that if European Union countries exclude Huawei, the Chinese government is considering a retaliatory card that regulates the export of products made in its Ericsson and Nokia factories.
Opportunity for Samsung to expand its 5G market
Unlike its rivals, Samsung does not produce telecommunications equipment in China. So there is a possibility of breaking away from this link of mutual retaliation. Samsung Electronics is making 5G communication equipment only at its plants in Vietnam and South Korea. Analysts in the telecommunications sector told WSJ that Samsung’s 5G sales could improve in the future. Already, Samsung has signed four new 5G network equipment supply contracts in the last eight months,. Including Canada and New Zealand.
In fact, Samsung has recently been discussing with several European telecommunication companies how to supply network equipment such as 5G. Kim Woo-joon, vice president of Samsung Electronics, told the House of Representatives on the 9th that he could definitely do so. When asked if he could provide 5G network equipment to the U.K. The WSJ also cited the fact that South Korea has relatively good relations with both the U.S. and China as a background for Samsung to avoid the “sandwich status” of the U.S.-China conflict.
Samsung’s network equipment business accounts for about 5 percent of the mobile sector’s sales. But experts estimate the portion will more than double in 2021, the newspaper said. However, some experts say that Samsung’s increasing share of the global telecommunication infrastructure market will be a formidable task. Samsung Electronics set a goal of achieving 20% of 5G market share in 2018 as the next year. Yet it has not been able to take up even one-seventh of the global market until 2020.