IoT Chip Market Overview
The global internet of things (IoT) chip market is expected to register a CAGR of 15.1% during the forecast period (2017–2023) and reach $17,285.3 million by 2023. The IoT technology is rapidly being adopted by various industries to make work processes easy and efficient. The growth of the market is being driven by the development of several networking protocols and increasing connectivity in a large number of devices and applications. Further, the growing requirement for flexible system on chip (SoC)-type architecture and application-specific microcontroller units (MCUs) is propelling the market ahead.
GLOBAL IOT CHIP MARKET BY SENSOR $M (2013–2023)
IoT refers to the internetworking of physical and virtual objects, which lets these devices communicate with each other via cloud technology in order to share information and data. With technological advancements and growing dependence on technology, the IoT technology is expected to gain ground across the world.
IoT connectivity can be achieved with traditional sensors, processors, and other hardware components. Moreover, numerous concerns including high power requirement and lack of wireless support have led to the evolution of the platforms designed for IoT applications. Further, the increase in investments to develop new IoT-based products is expected to boost the for IoT chip market.
IoT chips are being embedded in numerous devices and used for various applications by various industries. Wearable devices, consumer electronics, and healthcare equipment are the various applications of IoT chips. The key purpose behind the rapid adoption of IoT-enabled devices is improving comfort safety and work efficiency. IoT also facilitates better decision making, which, in turn, increases productivity.
The rising demand for application-specific MCUs and flexible SOC-type architecture is another major factor aiding the growth of the IoT chip market. IoT chips are capable of supporting varied communication protocols, due to which these chips are widely being adopted in the field of automation.
On the basis of hardware, the IoT chip market is categorized into processors, sensors, connectivity integrated circuits (ICs), memory devices, and logic devices. Among these, the memory device category is expected to register the highest CAGR during the forecast period. As IoT-enabled devices create data in huge amounts, a high demand for memory devices and storage solutions to process and manage data is generated.
Based on application, the IoT chip market is categorized into wearable devices; healthcare; consumer electronics; building automation; industrial; automotive and transportation; banking, financial services, and insurance (BFSI); agriculture; retail; oil and gas; and others. Of these, the automotive and transportation category contributed the highest revenue to the market during the historical period.
IoT Chip Market Dynamics
The key trend being observed in the IoT chip market is the reduction in the size of devices and declining cost of connected devices, both of which are encouraging their adoption. The push for the miniaturization of devices is a result of the demand for smaller assemblies in specific applications and the need for reducing material costs by manufacturing smaller parts that are equally efficient compared to the larger ones. Advancements in manufacturing techniques are resulting in smaller and cheaper products. In addition, numerous emerging economies, such as China, India, and Japan, are investing heavily in research and development (R&D) to encourage the use of IoT, which is expected to raise the demand for IoT chips during the forecast period.
The key factors spurring the growth of the IoT chip market include increase in the number of networking protocols and rising requirement for SoC-type architecture and application-specific MCUs. Conventional microcontrollers are general-purpose devices that can take handle a wide array of control tasks. In addition, these enable a large number of IoT-integrated applications to function.
IoT chips help in improving connectivity capabilities in a number of applications and devices. IoT chipsets comprising connectivity ICs in applications, such as near-field communication (NFC), Bluetooth, and global navigation satellite system (GNSS), are expected to be embedded in smartphones and other consumer electronics to reinforce communication protocols. This is expected to further drive the growth of the IoT chip market.
The key players in the IoT chip market are investing heavily in R&D, which is expected to augment the growth of the market during the forecast period. Technological advancements in IoT continues to generate the demand for better wireless connectivity solutions for supporting new applications in the automotive and transportation sector, including intelligent transportation systems (ITSs) and connected cars. This is expected to result in increased demand for connectivity ICs across the world.
The privacy and security of data are the major concerns associated with the use of IoT chips, which hinder the growth of the IoT chip market to some extent. In addition, high power consumption by connected devices and lack of common communication protocols across application platforms are the challenges faced by the market.
IoT Chip Market Competitive Landscape
The global IoT chip market was consolidated in 2016. Intel Corporation, Texas Instruments Incorporated, Qualcomm Incorporated, Microchip Technology Inc., NXP Semiconductors N.V., STMicroelectronics N.V., MediaTek Inc., Huawei Technologies Co. Ltd., Renesas Electronics Corporation, Cypress Semiconductor Corporation, NVIDIA Corporation, Samsung Electronics Co. Ltd., and Advanced Micro Devices Inc. are some of the key players operating in the market.