5G-Enabled Digital Transformation Deployments Continue to Grow in Southeast Asia, but Should It Be a Priority for All Enterprises?

In May 2024, Chinese electrical appliance manufacturer Midea Group jointly opened its first overseas 5G Factory in Thailand. Working closely with major Chinese telecom service provider China Unicom, Chinese tech giant Huawei, and Thai mobile operator AIS, Midea Group built a dedicated 5G private network that could cover an area of approximately 160,000 square meters to secure efficient interconnection of the assembly lines.

Midea Group's successful implementation of a 5G private network has significantly boosted operational efficiency. The network seamlessly connects each production phase and its machinery, resulting in a 15-20% improvement in operating efficiency. The factory also leverages other Industry 4.0 technologies, such as a 5G Artificial Intelligence (AI) inspection system, which uses laser sensors to identify the shape and location of parts, thereby reducing rework rates by 75%.

5G offers benefits in three major capabilities through the provision of Ultra-Reliable Low-Latency Communication (uRLLC), Massive Machine-Type Communication (mMTC) for the Internet of Things (IoT), and Enhanced Mobile Broadband (eMBB). uRLLC’s strengths primarily lie in its ability to deliver reliable, low-latency connections. This demonstrates a network's capability to transmit a given amount of data within a predetermined time duration with a high success rate, along with minimizing time lags between data transmission and reception to ensure mission-critical applications. Some important use cases are applied to industrial automation, autonomous driving, and robotics. mMTC enables connectivity between IoT devices, allowing efficient, multi-wat communication that can be applied to managing traffic and monitoring assets in each area. Lastly, eMBB enhances speeds and capacity by using multiple radio access technologies such as 5G New Radio (NR) and LTE Advanced Pro. By enhancing speed and improving coverage in dense areas, eMBB can enable high data throughput streaming, along with Virtual Reality (VR) and Augmented Reality (AR), which complements the other strengths of uRLLC and mMTC, thereby enabling new use cases such as remote-controlled operations, remote AR-based expert assistance or machine vision with AI capabilities. Based on ABI Research’s database, real-world implementations of these 5G use cases have been done across multiple verticals, including but not limited to manufacturing, healthcare, smart city management, and education.

However, beyond its three major capabilities, the fourth key advantage of 5G is that it supports high mobility use cases that wired ethernet or Wi-Fi solutions cannot address. Such use cases include supporting human-centric use cases, such as AR/VR applications, highly autonomous vehicle operations, enabling connectivity over a wide outdoor area. The wide range of adaptive use cases signals a growing interest in investing in private 5G deployments, as with the case with Midea Thailand. As such, ABI Research projects that private 5G network deployment growth in Asia-Pacific alone will be valued at US$21.3 billion by 2030, with a regional average CAGR of 57.8% growth.

While Midea’s 5G-enabled factory in Thailand has significantly boosted operational efficiency through the interconnection of assembly lines and the 5G AI inspection systems, it is important to note that its success is still based on a key fundamental – having a strong and robust data fabric architecture. While 5G supports enhanced connectivity, that feature will not be utilized to its maximum potential unless the right data is being collected, stored, and processed, which is the critical component in enabling advanced Industry 4.0 solutions, such as AI analytics, digital twins simulations, and remote-controlled operations. Additionally, 5G private networks come at a cost and are subject to local conditions such as licensing and spectrum availability, which can be a significant barrier to entry for enterprises to implement.

As such, enterprises should focus on first implementing a robust data fabric architecture and factory automation solutions, such as Supervisory Control and Data Acquisition (SCADA) and Manufacturing Execution Systems (MES) systems, for data collection and processing. Once the basic data frameworks are in place, enterprises can thereafter consider 5G as an enabling technology for advanced Industry 4.0 solutions that require the unique advantages that 5G can bring over other connectivity solutions.