Expectations for Equipment Manufacturers to Benefit from Early Expansion of 5G Investment in the First Half of the Year

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[Asia Economy Reporter Kum Boryeong] An analysis has emerged suggesting that the early investment expansion in the first half of the year by Korea's top three telecom companies (SK Telecom, KT, LG Uplus) is expected to benefit 5th generation (5G) mobile communication equipment manufacturers.

On the 5th, Choi Ki-young, Minister of Science and ICT, and representatives of the three telecom companies held an emergency meeting. This was to prepare measures for economic recovery and support for small business owners affected by the novel coronavirus disease (COVID-19).

First, the three telecom companies decided to invest 4 trillion won in 5G communications and related areas in the first half of this year. The original investment plan was about 2.7 trillion won, but it has been expanded. Focused 5G facility investments are planned for multi-use facilities such as subways, railroads, large stores, and universities.

Park Jong-sun, a researcher at Eugene Investment & Securities, explained, "Typically, investments in the telecom industry have been concentrated in the second half of the year, but this year, the reason for promoting early investment expansion in the first half is the expectation that 5G network investment will have a positive impact by inducing investment throughout the information and communication technology (ICT) ecosystem."

Through this, companies expected to export overseas in the second half of the year are anticipated to benefit. Last year, domestic telecom equipment companies' stock prices showed a first rally with significant increases due to 5G investments, and with domestic investments in the first half of this year as well as expected full-scale 5G investments in the US, Japan, and China in the second half, a second stock price rally can be predicted.

Researcher Park analyzed, "Companies related to Samsung Electronics, Nokia, Ericsson, such as optical connector manufacturer Oisolution, base station cabinet manufacturer Seojin System, base station antenna and parts manufacturer Ace Tech, base station parts and materials supplier RFHIC, and base station equipment and parts supplier KMW, are expected to benefit."

This content was produced with the assistance of AI translation services.