At the beginning of 2020, the concept of 5G is still popular, but it seems to be a long way from its large-scale use. And analysts at Stansberry Venture Technology product Dave Rushmet (Dave Lashmet) advise investors that it's better to spot trends in advance than to rush in when the trend is about to go away.

Internet company Cisco Systems estimates that global Internet traffic will reach 4.8 megabytes a year by 2022-the amount of traffic that sends out all the world's movies in 53 seconds. Therefore, in order to accommodate a large amount of data, we need faster connection speed and more advanced data storage capacity.

Wireless service providers such as Verizon Communications Inc, T-Mobile and AT&T Inc have launched 5G connections in some cities. Handset makers such as Samsung have also launched the first generation of 5G phones.

Yes, the 5G era has come. The question is, when will we see its widespread use?

Dave Lashmet analysts believe it will take five to seven years to build a complete 5G network for all users around the world.

First of all, from the long-term and short-term construction goals:

According to the currently established 5G network synchronous data on the number of mobile phones using this service. In 2019, only 0.5 per cent of Samsung phones sold in the US had 5G capabilities (with four antennas), while Apple Inc smartphones did not yet have 5G capabilities. This means that there are few users in the 5G network currently running.So it's relatively easy to build-- there's no need to build a high-capacity 5G network in a short period of time, although high capacity is the ultimate long-term goal.

Secondly, from the perspective of the components of 5G construction:

1. Software:

The software part is relatively simple, and the existing wireless infrastructure can already accommodate the new and more complex software code needed by 5G. So all 5G needs to do is upload new software.

two。 Hardware:

The implementation of 5G network requires the support of special hardware and software such as 5G transmitter (such as tower) and 5G receiver (such as mobile phone). However, it will take some time for the development and production of special antennas to support 5G, because the different requirements of 5G equipment are that it needs the support of four antennas to meet the needs of massive high-speed video streams for larger data bandwidth, higher quality and more intensive data.

3. Test accessories and others

All the hardware of 5G must go through the processes of physical design, construction and testing before it is put into use. This means the demand for raw materials (such as pure silica sand), container ships, as well as the construction of factories and training of workers.

When Stansberry launched the Super Technology portfolio (Stansberry Super-Tech Portfolio) in February 2019, our view was to expect the 5G trend to stride forward, but frustratingly, some ideas ran counter to us. But it is also because we "bottomed" the industry, Berry has made some incredible gains in the past year.

STMicroelectronics, for example, rose 91 per cent in 12 months. Seagate Technology is up 30% over the same period. In addition, we have locked in Intel Corp's 40 per cent increase in just four months.

Berry believes that the 5G revolution has only just begun, this trend is still several years away, and 2020 will be another critical year for companies to develop 5G technology. Therefore, we will continue to provide investment research on this subject.

For now, we still hold four stocks in our super technology portfolio.

1. STMicroelectronics:Lead the 5G semiconductor industry with an increase of 91%

STMicroelectronics (STM.US) $The company produces a large number of electronic and semiconductor products and, like Sony Group Corp (Sony) and Texas Instruments Inc (Texas Instruments), is a leader in the semiconductor industry.

With the increase in 5G coverage and the demand for faster data speeds, we will see an increase in market demand for Internet of things (IoT) support, smartwatches and driver-assisted cars from Italian semiconductors.

In 2019, Samsung, which accounts for 5% of the company's total revenue, launched the GalaxyS10 5G in countries where 5G features are more extensive. Apple Inc, which accounts for about 13% of the company's total revenue, is likely to launch its first 5G phone in late 2020.

All in all, we saw strong demand for STMicroelectronics from smartphone manufacturers like this in the fourth quarter of 2019, and this trend will continue.

We expect that with the expansion of 5G coverage in the United States, companies such as Apple Inc will continue to use STMicroelectronics chips as support.So Berry thinks it's worth paying attention to in the long run.

2. Seagate Technology:Hard disk driver Scheme under 5G Storage Gap

Seagate Technology (STX.US) $Is the world's second largest hard disk drive (HDD) supplier after Western Digital (Western Digital,WDC), the hardware needed to store data. Its customers include well-known technology companies such as Apple Inc, Amazon.Com Inc, Cisco Systems and Microsoft Corp.

The innovation of Seagate technology is that it uses thermally assisted magnetic recording (HAMR) to increase storage capacity. This technology meets the growing demand for data storage in the industry. Compared with traditional hard drives, HAMR hard drives can hold more than 5 times as much data.

We choose Seagate as one of the investment targets for 5G because we expect that with the launch of 5G, the amount of data transmitted over the network will inevitably increase, and there will be more music and movie streaming, more pictures and videos, and a greater demand gap for cloud data storage.

Today, Seagate is the only company to mass-produce 16-megabyte drives, which is the industry's capacity benchmark (the capacity benchmarkfor the industry. j). Just 1 megabyte can store about 200000 songs, 310000 pictures or 500 hours of movies.

According to the company's management, Seagate had seen strong demand before the formal confrontation between 4G and 5G. As management mentioned in the latest quarterly conference call, revenue is growing in a specific area of its business."in order to meet the huge demand of customers (Apple Inc, Microsoft Corp) for these products (cloud computing), we are constantly increasing the output of 16 TB of near-line drives.「

Therefore, withWith the transition of the network to 5G, the demand for data storage hardware is expected to increase.Like STMicroelectronics, from a long-term point of view, we think it has a higher possibility.

3. Yadno Semiconductor:5G hardware antenna supplier

$Yadno (ADI.US) $Semiconductor companies mainly produce 5G hardware such as silicon chips and electronics, as well as amplifying, processing and filtering wireless signals. For example, smartphones, tablets and smartwatches use Yadno's technology to make wireless calls or watch videos.

Yadno's products also include four antennas for 5G, which are called multiple-input multiple-output ("MIMO") antennas. Wireless network providers need these special MIMO antennas to build 5G networks. Mobile devices and cellular towers use MIMOs to transfer data from the cloud to mobile devices.

In addition to the 5G industry, industrial manufacturing and automotive industries are also the downstream customer base of Yadno manufacturing. In November 2019, Yadno announced the provision of new network hardware for factories that use intelligent robots. It supports near-real-time data flow and facilitates system integration, thereby improving factory efficiency.

Brendan Brendan O'Dowd, general manager of Yadno Industrial Automation, has publicly stated that "even if communications are shut down for one millisecond, it will have a negative and costly impact on the quality, throughput and efficiency of manufacturers."

Hyundai, a South Korean car brand, used Yadno's technology to build the industry's first all-digital system to eliminate road noise at high speed.

Yadno is in the middle of the 5G network revolution. The company's share price has risen 19% since November 2019, and we recommend keeping an eye on it and keeping track.

4. Corning:5G glass screen manufacturing faucet

Corning (GLW.US) $The company is a leader in glass manufacturers of laptops, televisions, tablets and mobile phones. It is best known for its ultra-durable flagship product, Gorilla Glass, which most likely comes from the smartphone display you use. At the same time, Corning also produces fiber optic cables and communications equipment for the rapidly expanding 5G infrastructure.

As all tasks on 5G smartphones, including streaming video, are faster and more convenient than ever before, we expect to see electronics moving towards large screens.

Shipments of smartphones with large screens (5.5in or more) grew from 945 million in 2018 to 1.1 billion in 2019 and are expected to rise to 1.4 billion by 2022, according to Statista.

And because Corning's revenue is based on the number of square inches of glass it sold, the company reported better-than-expected results in the fourth quarter of 2019, proving that the company can thrive even if some divisions perform poorly.

Of these, when the growth rate of the automobile market is only 5-6 per cent (mid-single digits), Corning's environmental technology business (vehicle emission control) is 16 per cent, its specialty materials business (Gorilla Glass) is up 8 per cent, and smartphone sales are down 3 per cent. In addition, its life science business (laboratory equipment) is growing almost twice as fast as the market.

Corning expects these three businesses to continue to grow by 2020. The company also expects the business volume of display technology (LCD screen) and optical communications (fiber optic cable) to improve in the second half of the year.

Although Corning has managed to grow when the industry's operating space has declined, its management is taking some actions that the market does not necessarily agree with. For example, companies finance dividend payments and share buybacks by taking on more debt.

Berry believes that in some cases, this business strategy may be a boon to shareholders.But it is important that Corning does not generate the cash flow necessary to safeguard the interests of these shareholders.Therefore, it is recommended to remain vigilant against Corning stocks for the time being.