Material Criticality for Future Telecommunication Technologies: Scenario Development and Supply Chain Resilience Strategies

Abstract

Digital technologies are enablers for a variety of sustainable use cases. The underlying infrastructure for this digital transformation is provided by telecommunication companies through their future technologies. Future telecommunication technologies consist on a variety of raw materials, amongst some are considered to be critical. Critical Raw Materials (CRMs) are associated with a high economic importance, as well as severe supply risks. The goal of this research was to firstly identify which CRMs are contained in future telecommunication technologies and secondly how the demand for them will develop until 2030 or 2050 under slow, fast and full rollout scenarios and compared to current supply levels. Based on that, thirdly strategic choices for telecommunication companies on creating a resilient supply were given. The design of the study was build up in the respective order and was based on a case study research for a Dutch telecommunication service provider and expert interviews with technology suppliers and research institutes in the network. The focus technologies included 5G Technologies, Photonics, Edge Computing and Quantum Technologies. The general finding was that a broad range of CRMs could be identified in the network equipment of these technologies, with the CRMs Erbium, Gallium, Germanium, Phosphorous, Silicon and Titanium having the highest frequency of occurrence. Amongst them, Erbium has also very high supply risks. When looking at the demand development for CRMs contained in future telecommunication technologies, an 8-fold increase under a slow rollout scenario until 2030, a 15-fold increase under a fast rollout and a 16-fold increase under the full rollout scenario could be identified. The demand by far comes mostly from 5G Technologies. When comparing the future demand with current supply, specifically 14 CRMs could be identified where demand will exceed supply: Beryllium, Natural Graphite, Dysprosium, Gallium, Germanium, Magnesium, Neodymium, Palladium, Ruthenium, Tantalum, Terbium, Titanium, Thulium and Yttrium. From this is could be concluded that if supply cannot meet demand, the future rollout of these technologies is at stake resulting in company’s corporate strategies being at risk and thus the future of the telecommunication industry and a global digital transformation. In order to tackle these bottlenecks of demand and supply, there are strategic choices companies can chose for creating supply chain resilience for material criticality. Supply risks mitigating strategies included the design of technologies after eco-design principles, increase recycling rates, investigate into substitution potential, diversity supply geographically as well as ownership based, avoid conflict minerals by responsible sourcing, stockpiling, lobbying for new mining activities, foster cross-chain collaboration and redesign whole business models after circular economy principles. All of these strategies can be strategic choices for telecommunication companies and are advised to be considered at the company level.