In our recent Webinar Series titled 5G Technology & Applications – An Overview, we hosted Mr Lawrence Liu, CEO of Tekmark Group, to share his thoughts on the development of 5G around the globe as well as the opportunities and benefits of adopting 5G in specific industries. Mr Liu graduated with a first-class honours degree in electrical, electronics & communication engineering from University of Glasgow. He has had extensive experience with Agilent Technologies (17 years) and Keysight Technologies (7 years) before joining Tekmark Group.

After 8 years since 4G rollout in Malaysia, download speed is still >10x slower than the likes of South Korea and ranks the worst among neighbouring countries such as Singapore and Vietnam. Malaysia needs to improve on its 4G network and simultaneously ensure a smooth rollout of the 5G network as Mr Liu pointed out that in the next 3-5 year, it is the services that run on 5G that will realise the real economic value of 5G. This involves services like advanced driver assistance system and telematics for the automotive industry as well as digital twin (a virtual representation of a product) for the manufacturing space via augmented reality.

In terms of enterprises' adoption of 5G services, Mr. Liu opines that companies are still in the stage of exploring the potential 5G use cases, with potential monetization only 3 to 5 years later. We share his views, and we believe that enterprises in sectors such as: (i) Ports and Logistics, (ii) Manufacturing, and (iii) Oil & Gas may be the first sectors to adopt 5G use cases, as some firms currently deploy IoT solutions, potentially giving them an appetite to explore 5G use cases.

However, Mr. Liu also points to two key factors that could slow 5G adoption among domestic enterprises: (i) limited 5G coverage, and (ii) lack of appropriate policy and framework. We opine that there's a third crucial factor: the lack of technological readiness. To overcome said hurdles, Mr. Liu believes that there needs to be greater public-private partnerships to foster an ecosystem that is conducive for the adoption of 5G services.

Fortunately, the Malaysian market has players in the semiconductor space that has been benefiting from the 5G infrastructure rollout and is expected to continue seeing robust growth in the coming years. We have identified INARI (OP; TP: RM4.60) as a key beneficiary of 5G adoption in end devices and MPI (OP; TP: RM56.20) as a prime proxy to the growing trend of electric vehicles and autonomous driving.

Source: Kenanga Research - 21 Feb 2022