Industry analysis projects the 5G modems market to rise from $845 million in 2021 to $10.8 billion by 2031, as surging demand for high-speed connectivity, wearable technology, and connected vehicles accelerates adoption across consumer and industrial segments alike.
The global 5G modems market was valued at $845.3 million in 2021 and is projected to reach $10.8 billion by 2031, growing at a compound annual growth rate (CAGR) of 29.1%, according to a market analysis published by Allied Market Research. The forecast reflects the rapid commercialisation of fifth-generation wireless networks across both advanced and emerging economies, and the increasingly wide range of devices and systems that are being designed to leverage 5G connectivity.
A modem — short for modulator-demodulator — is the core component that enables a device to communicate over a wireless network by translating digital data into radio frequency signals and back again. In the 5G era, modems must support dramatically higher data throughput, lower latency, and a wider range of frequency bands than their predecessors, creating a new product generation that is progressively being integrated into smartphones, laptops, tablets, routers, vehicles, and industrial equipment.
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What Is Driving the 5G Modems Market
Several converging trends are identified as the primary demand drivers for 5G modems over the forecast period.
The most fundamental is the global surge in demand for high-speed mobile internet access. As consumers and businesses increasingly rely on wireless connectivity for video streaming, cloud applications, remote work, and real-time communications, the limitations of 4G LTE networks — particularly in terms of peak data rates and network capacity in dense environments — are becoming more apparent. 5G networks address these limitations directly, but capturing the benefits of 5G connectivity requires devices equipped with 5G-capable modems.
Beyond consumer internet access, the expansion of mobile broadband for industrial, commercial, and public sector applications is creating new modem demand segments. Fixed wireless access — delivering broadband to homes and businesses via 5G networks rather than wired connections — is emerging as a significant application, particularly in markets where fibre broadband deployment is costly or slow. Fixed wireless access gateways and customer premises routers require dedicated 5G modems engineered for sustained high-throughput performance.
The growth of wearable technology represents an additional driver. Smartwatches, fitness trackers, augmented reality headsets, and connected medical monitoring devices increasingly incorporate cellular connectivity, with 5G modems enabling the real-time data transmission that many of these applications require. As wearable form factors shrink and performance demands grow, the development of ultra-compact, low-power 5G modems is a key engineering priority for chipset manufacturers.
Rising government investment in smart city infrastructure — particularly across Asia-Pacific — is further expanding the addressable market for 5G modems. Smart city platforms incorporate a wide range of connected sensors, cameras, environmental monitors, and public services applications, all of which rely on wireless connectivity. In markets where governments are actively funding smart city deployments, 5G modem demand from the infrastructure sector is expected to be a meaningful contributor to market growth.
Internal Modems Dominate by Type; External Modems Record the Fastest Growth
By modem type, internal or integrated modems held the dominant share of the market in 2021, accounting for approximately 90% of global revenue. Internal modems — those built directly into a device’s system-on-chip or motherboard — are the standard approach for smartphones, tablets, and laptops, where space efficiency and power consumption are critical design constraints. The near-universal adoption of integrated modem architectures in consumer mobile devices ensures that internal modems will continue to account for the majority of unit volume throughout the forecast period.
External 5G modems — standalone devices that connect to a host system via USB, PCIe, or other interfaces — serve a different set of use cases, including industrial machines, point-of-sale terminals, vehicles, medical equipment, and IoT gateways where adding cellular connectivity to an existing system is more cost-effective than redesigning the host platform. The external segment is projected to grow at the fastest CAGR of 33.6% from 2022 to 2031, driven by the expansion of connected industrial and enterprise equipment that was not originally designed with 5G in mind.
Single-Mode Leads; Multimode Gains Ground as Networks Mature
By operating mode, single-mode modems — those designed to operate on a specific frequency band or network standard — captured more than two-thirds of the global 5G modems market in 2021 and are expected to maintain their lead through the forecast period. Single-mode designs are generally less complex and less costly to manufacture, making them the standard choice for devices targeting markets where a single dominant frequency band covers the majority of the coverage footprint.
The multimode segment, however, is projected to achieve the fastest CAGR of 31.35% through 2031. Multimode modems can operate across multiple frequency bands and network standards — including sub-6GHz 5G, millimetre wave 5G, 4G LTE, and in some cases Wi-Fi — within a single device. As 5G network deployments mature and operators deploy networks using multiple frequency bands simultaneously to balance coverage and capacity, multimode capability becomes increasingly valuable. Premium smartphones, enterprise laptops, and vehicles destined for global markets are among the device categories where multimode modems are becoming the standard specification.
Mobile Devices and Tablets Lead Applications; Automotive Grows at the Highest Rate
By application, the mobile and tablets segment held the largest market share in 2021, accounting for approximately two-fifths of global revenue. Smartphones remain by far the largest individual application for 5G modems by unit volume, with global 5G smartphone shipments growing steadily as network coverage expands and 5G-capable devices become available at progressively lower price points. Tablets and laptops with integrated 5G connectivity represent a smaller but growing share of the mobile device segment, driven by enterprise demand for always-connected portable computing.
The automotive segment is identified as the fastest-growing application, projected to record a CAGR of 31.28% from 2022 to 2031. The integration of cellular connectivity into vehicles serves an expanding range of functions: over-the-air software updates, real-time navigation, remote diagnostics, vehicle-to-infrastructure communication, emergency services integration, and the data links required for advanced driver assistance and autonomous driving systems. As automakers transition to software-defined vehicle architectures — where a significant proportion of a vehicle’s functionality is delivered and updated via software — reliable, high-bandwidth cellular connectivity becomes a foundational capability rather than a premium add-on.
The automotive application also places distinctive demands on modem design. Automotive-grade components must operate reliably across extreme temperature ranges, withstand vibration and humidity, meet functional safety standards such as ISO 26262, and maintain connectivity over the multi-decade operational life of a vehicle. These requirements support premium pricing relative to consumer device modems and create barriers to entry that favour established chipset suppliers with automotive certification expertise.
Other applications addressed by the market analysis include home broadband routers and gateways, industrial IoT devices, healthcare monitoring equipment, and retail technology systems — all of which are expected to contribute to market growth as 5G networks expand their geographic coverage and organisations invest in connectivity upgrades.
Asia-Pacific Leads Regionally; LAMEA Expected to Record the Fastest Growth
Geographically, Asia-Pacific held the largest regional share of the 5G modems market in 2021, accounting for more than one-third of global revenue. The region’s position reflects the early and aggressive 5G network rollouts in China, South Korea, and Japan, combined with the concentration of major smartphone manufacturers and modem chipset producers in the region.
China’s domestic 5G deployment — the world’s largest by scale — is a primary driver of regional modem demand, both through its own device market and through the export of Chinese-manufactured 5G-capable consumer electronics globally. South Korea’s advanced 5G infrastructure and high smartphone penetration make it one of the most mature 5G modem markets in the world. Japan and Australia have similarly progressed in national 5G rollouts, while India’s 5G expansion — which accelerated significantly from 2022 — is becoming an increasingly important growth engine within the region.
LAMEA — Latin America, the Middle East, and Africa — is identified as the fastest-growing regional market, expected to record a CAGR of 31.82% from 2022 to 2031. Several interrelated factors underpin this elevated growth trajectory. Rising awareness of artificial intelligence and IoT technology applications is creating demand for 5G-enabled devices and services across business and government sectors. Gulf states in the Middle East have been among the early 5G adopters globally, with operators in Saudi Arabia, the UAE, and Qatar having launched commercial networks and aggressively expanded coverage. In Africa, the leapfrogging potential of 5G — delivering high-speed broadband to markets where fixed-line infrastructure is limited — is attracting both operator investment and government interest. Latin American markets, led by Brazil and Mexico, are also advancing their 5G deployments, supported by spectrum auctions and regulatory frameworks that have attracted operator capital commitments.
North America and Europe remain significant markets. The United States has seen extensive 5G deployment across mid-band spectrum by all three major national carriers, while European Union member states are at varying stages of 5G rollout, with Western European markets further advanced than those in Central and Eastern Europe.
Key Players and Competitive Dynamics
The global 5G modems market is dominated by a small number of semiconductor companies with the engineering depth and intellectual property portfolios required to develop competitive 5G modem silicon. Key players identified in the market analysis include Qualcomm Technologies, Samsung Electronics, MediaTek, Huawei Technologies, Intel Corporation, Nokia Corporation, Infineon Technologies, Qorvo, Spreadtrum Communications, and Xilinx (now part of AMD).
Qualcomm has established a leading position in the premium smartphone modem segment, with its Snapdragon X-series modems — including the X65 and its successors — representing the benchmark for peak 5G data performance in flagship device platforms. MediaTek has captured significant share in the mid-range and entry-level smartphone modem segment, particularly in Asia and emerging markets, through competitive pricing and strong integration with its own application processor platforms.
Samsung’s Exynos modem series serves both its own devices and selective third-party customers. Huawei’s Balong modem series, developed by its HiSilicon semiconductor division, has demonstrated strong capability but faces significant constraints in accessing advanced manufacturing processes due to export restrictions on semiconductor technology. Intel’s departure from the smartphone modem market has concentrated the competitive landscape in that segment, while the company maintains presence in other connected device categories.
Competitive differentiation in the 5G modem market centres on several dimensions: peak downlink and uplink data rates, power efficiency, support for mmWave and sub-6GHz bands simultaneously, carrier aggregation capability, integration with Wi-Fi and Bluetooth, and the speed at which new chipset generations achieve design wins with major device manufacturers. As 5G Advanced standards begin to be specified and eventually deployed, a further cycle of modem development — addressing capabilities including integrated sensing, AI-assisted network optimisation, and sub-terahertz frequency exploration — is expected to emerge over the latter part of the forecast period.
Challenges: Infrastructure Investment, Security, and Technology Complexity
Despite strong growth fundamentals, the 5G modems market faces meaningful headwinds. The high cost of 5G infrastructure deployment — base stations, small cells, fibre backhaul, and core network upgrades — affects the pace at which operators can expand coverage, particularly in rural and lower-income markets where the return on investment timelines are longer. Network coverage gaps constrain device demand in affected areas, as consumers and enterprises in uncovered locations have limited reason to upgrade to 5G-capable devices.
Privacy and security concerns associated with 5G networks represent another challenge. The higher data volumes, lower latency, and broader range of connected devices enabled by 5G create an expanded attack surface for cyber threats. Modem chipset security — including secure boot processes, firmware integrity verification, and protection against over-the-air attack vectors — is increasingly scrutinised by device manufacturers, network operators, and government agencies, adding engineering complexity to modem development.
The technological and infrastructure challenges involved in deploying 5G networks in developing markets — where spectrum management, regulatory frameworks, and physical infrastructure may not yet be fully established — can delay market development in regions identified as high-growth opportunities.
Outlook
The 5G modems market’s trajectory through 2031 is anchored in the straightforward dynamic that global wireless communication is transitioning to 5G — and that every device and system designed to communicate over a 5G network requires a 5G modem. As network coverage expands geographically and device price points decline, the addressable market for 5G modem integration grows continuously.
The extension of 5G into automotive, industrial IoT, healthcare, and infrastructure applications beyond the initial consumer device wave is expected to diversify and deepen demand over the second half of the forecast period. These application segments tend to involve larger, more complex, and higher-value deployments than consumer smartphone cycles, and their adoption timelines are less sensitive to consumer purchasing cycles or handset replacement patterns.
Analysts identify the combination of sustained operator network investment, accelerating device ecosystem development, and growing enterprise and government recognition of 5G as critical infrastructure as the foundations for a growth trajectory that is expected to remain well above the average for the broader electronics sector through 2031.
