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Analysis

5G: US$740 Billion Potential in Manufacturing Applications

By Alejandro Enríquez | Thu, 07/22/2021 - 16:44

Fifth-generation wireless technology, commonly known as 5G, has the potential to reshape manufacturing operations. Greater levels of automation, data warehouses, augmented reality, cloud computing and state-of-the-art Industrial Internet of Things (IIoT) will drive the deployment of 5G networks at manufacturing facilities. "With 5G, new sets of solutions and products will emerge. Some of them may be only in our imagination but 5G will make them possible," writes Joaquín Saldaña, Strategy Director of Huawei Mexico, for MBN.

There are three fundamental characteristics of 5G that will enable applications “beyond our imagination,” as Saldaña states. First, the higher speed with enhanced mobile broadband that can support up to 20Gb of data. Second, low latency, which means a rapid response from devices of around 1ms. Finally, massive connection or the possibility to connect more than 1 million devices per square kilometer to the same network.

The Potential of 5G Networks

Manufacturing is among the sectors most likely to be transformed by 5G, according to MIT Sloan School of management. "The new network stands to enable or improve technologies as far-ranging as holograms, artificial intelligence and machine learning, industrial robots, drones and smart cities, buildings and homes.”

As PwC notes, "the modern factory is already a highly complex environment. Advanced machines and robots are equipped with a wide array of sensors connected to high-powered analytics engines in the cloud that assess performance, manage production schedules, maintain supplies and orchestrate all the activities on the factory floor." All this forms the ideal ecosystem for a more cohesive IIoT.

Ericsson, one of the world leaders in telecommunications and 5G applications, estimated that by 2026, the 5G applications market will be worth US$113 billion, with manufacturing representing “one of the most significant sectors for new revenue potential.”

CEO of Siemens Latin America, Alejandro Preinfalk, and Product Manager of Qualcomm México, Ricardo Anaya, agree on the potential this technology will have on manufacturing operations in the country. On the one hand, Preinfalk told MBN 5G networks increase device density to 1 million devices per square kilometer. “For a manufacturing space, this will be essential. Also, it will maintain low latency so different devices can react quickly, which will be an essential characteristic for the safety of the factory of the future," said Preinfalk. "The cornerstones of 5G are more bandwidth, better latency and more user capacity. When implementing 5G, these three pillars and the new frequencies on which this technology works allow for network deployments that are very different from what we are used to," agreed Anaya.

5G Amount

STL Partners, supported by Huawei, the undisputable leader in 5G infrastructure, estimates that 5G could represent US$740 billion in manufacturing value by 2030. According to its study, 5G could lead to a 4 percent growth in global manufacturing GDP.

That being said, according to MIT Sloan the full impact of these technologies is yet to be seen. "The full business impact of the network has yet to be seen. What is clear is that it is ripe with opportunity for fields as varied as entertainment, manufacturing, healthcare and retail. Successful enterprises will tap 5G to boost IoT applications, virtual and augmented reality and larger-scale robot and drone deployments.”

Advanced Manufacturing With 5G

STL Partners and Huawei’s study highlighted seven uses for 5G technologies in manufacturing operations: advanced predictive maintenance, precision monitoring and control, augmented reality and remote expert, remote robot control, manufacturing as-a-service, automated guided vehicle and drone inspections. Out of these applications, Huawei expects 5G’s greatest impact in terms of segment value will be on precision monitoring and control, followed by augmented reality and remote expert and advanced predictive maintenance.

Preinfalk explains how Siemens is already adopting some of these features in its technology and solutions. "In 2019, we deployed our first 5G network in Germany at a test center in the automotive sector. At this facility, we installed AGV to facilitate operations across the floor. We also incorporated different industry protocols for data processing.”

Remote inspection for additive manufacturing applications can be seen as a practical example of quick 5G adoption. Regarding the former, 3D Systems (NYSE:DDD) is one of the largest – and oldest – additive manufacturing companies in the market. In 2019, it entered a partnership with Toyota Gazoo Racing to “change automotive engineering.” From that moment, according to 3D Systems, "both companies developed first-to-market manufacturing solutions to revolutionize automotive design and production." The scale of this technology is not yet enough for massive applications, however. “For an industrial grade 3D printer of over US$70,000 to be financially viable, the company would have to keep it running at least at 50 percent of its capability or 12 hours daily to see a return on investment," said Sebastian Romo, Founder and CEO of Tridi, a Mexican company focused on 3D printing.

When imagining additive manufacturing operations in a 5G context, the real use case will be precision monitoring and control. The network will allow to reduce defect rates by 10 percent, improving machine performance by recognizing cycle speeds and thus improving machine productivity by 15 percent, reducing resin spent and consequently increasing the lifetime of the equipment.

Another 5G advantage is the ability to create successful digital twins and also scan facilities for maintenance. Just a year ago, Ford announced dog-like robots to monitor their facilities reducing inspection time from weeks to days. Moreover, Boston Dynamics, the company manufacturing the robots, was recently acquired by Hyundai Motor Group "to secure a leading presence in the field of robotics."

In the case of the robots, they work together within the factory's network, usually through a Wi-Fi network. With 5G, the number of devices, or robots, can increase without interfering with one another. "One popular approach is to use the 4G network as an anchor and add a traditional spectrum to it to get 5G. Eventually, this network becomes fully 5G because of the amount of data it is receiving. This is known as a standalone (SA) network and it opens up the opportunity to develop private networks, which are transforming many industries, such as mining, manufacturing, automotive and even infrastructure providers. For example, Germany already has more than 70 private or on-site networks in operation. Some companies in Brazil are also allocating spectrum for this," said Anaya.

Mobile Wrld Congress 5G

Advances of 5G Networks in Mexico

Advances have been made at the global level regarding 5G networks. According to a recent study by Viavi Solutions, a global provider of network test and monitoring solutions, 1,662 cities across 65 countries now have commercial 5G services, excluding private networks.

In Mexico, there are several steps that need to be taken into account to advance this technology. Partnerships, infrastructure and investments are just some of the main elements to consider. "Mexico faces a lot of challenges to make 5G connectivity a reality. It cannot be a goal to be taken solely by the mobile industry but by different actors at all levels and sectors including consultancy services, digital education and appropriation, among others," wrote Federico Hernández, Partner at Hogan Lovells, for MBN.

As for investors, Anaya is confident this year there will be some clarity regarding 5G. "5G networks are still under development. We have been working with all operators in Mexico and throughout Latin America to support the evolution toward 5G. As of July 2021, 169 operators worldwide have launched a 5G network. In the US, South Korea, China and the EU, 4G networks were saturated and urgently needed to increase capacity. In Mexico this is not the case, although operators in Mexico are investing heavily to deploy 5G technology and I am confident that this year we will have some news of rollouts in the country," he said.

5G will enable a "real-time economy" or, in this case, real-time manufacturing with a US$740 billion potential for manufacturing applications by 2030. Technology will enable advanced manufacturing processes and systems such as additive manufacturing, IIoT and even production monitoring or facility scanning to be more efficient by connecting a million devices without compromising the connection speed. In Mexico there is still a long-road ahead but industry leaders have already the potential

Photo by:   Qualcomm
Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst