Geelong MicroSoldering

Sure, if the new iPhone 5 board is not icloud locked. But at the cost of an iPhone 5, i cant see it being worth it at all. The logic board is basically the entire device in terms of what is most expensive. Everything else are just parts. A replacement, not icloud locked, not blacklisted logic board, is likely to cost just as much as a second hand iPhone 5. But in answer to your question, the answer is yes

The ic is not soldered correctly or has failed (possibly due to too much heat). This is the same as the behaviour of a device that has no U2 ic installed at all

If the shields are not removed from the device, its a bit like washing your car with your eyes closed. The shields require an experienced board level tech to remove. If that step is skipped, the chances of it having further issues are very high. On top of this, alcohol doesn't dissolve organic matter, it tends to just move it around if you are lucky. There's a link on my profile to finding a board level tech. I definitely wouldn't be selling the device as fully functional without at least having the shields removed and the board cleaned properly in an ultrasonic cleaner with appropriate solution.

The issue may be with the dock itself (even though it is charging) or with the phone U2/Tristar/USB logic IC. Try getting the dock replaced (or just another connected to test), and if that doesn't help, see if you can locate someone to do a board level diagnosis for you. There's a link on my profile for a service to help people locate board repair techs

Does the device have an IMEI? If you press the "i" at the activation screen, do you see the imei of the device there? If not, you have a baseband issue. If so, try activating via the computer, as this could be a time bug (fairly common) If the device does have an IMEI, and the time is correct, but you get the "sim card is required for activation" message, the issue is in relation to the sim reader or something on the board connected to the sim reader. You can find a link on my profile to locate someone close to you to diagnose/repair the device on a board level

Are you using the original charger? These devices don't like charging from flat otherwise. Another possibility is that the battery has dropped below the 0% mark (3.7v), This is fairly common if it has been left sitting in a flat state

@meepfish1 has a relevant suggestion. Other than that, what is the history of the device? Has it ever had a screen replace or other work done? Its possible there is an issue with the LCD or with the board itself, in regards to the backlight circuit. This is usually the case when work has been performed, the device has been damaged in some way, been near water, ect

If you are looking to find someone close to you, you can search your location at http://boardrepair.info. Those guys are all trusted worldwide for board level repair I realise this post is a little old, but throwing it out there for future reference :)

Commenting on an old post for the sake of future reference for anyone who finds themselves reading. There's lots of people who can provide U2 IC replacement on the iphone 5C/5S/6/6+/6S/6S+ these days. You can find someone close to you at http://boardrepair.info It is definitely not something I would suggest someone who does not already do complex Micro BGA work to attempt. I see enough of them damaged from prior attempts, and it results in a higher cost that going straight to the experienced folk :)

While this post is now very old, I thought id throw some input here for anyone who comes across the page. There are quite a few trusted board level repairers around the world. This website can help you locate one close to you. http://boardrepair.info I personally provide iPhone 5 U2 replacement, but there's a handful who can, so it's worth checking out. It's no longer really worth it on an iPhone 5 unless data is important, but all other devices still have this problem.