IoT Chip Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

IoT Chip Market Trends and Growth Drivers

Usage of Emerging Technologies Is Key Market Trend

• The increasing R&D in the field of IoT and the rising need for better lifestyles are the two major trends in the market.
• As a result of this extensive R&D, various technologies have emerged in these semiconductor instruments, such as e-SIM, mesh network, and 5G.
• Moreover, scientists are developing methods for successfully bioprinting complex organs, perfecting predictive medicine, and using genet editing to cure diseases.
• The implementation of IoT in the laboratory environment, to add a new layer of efficiency to the way research and development are conducted, is the first step in having a smart lab.
• With this, experiments are being executed faster, data is being recorded more accurately, and research has become more accessible.
• As the digital world converges with the physical, the integration of IoT in laboratories would revolutionize the research field across industries.
• Hence, businesses are focusing on optimizing costs, reducing risks, and minimizing the time to market for their IoT chips, to benefit a host of sectors.
• For instance, semiconductor firms are developing battery-equipped M2M wireless sensors to collect equipment data easily.
• The collected data is visualized by an AI platform, to be used for manufacturing improvements.
• The recent advanced technologies used in this industry are cloud-connected sensors and AR, while the new connectivity protocols in IoT-connected devices include NB-IoT, LTE, and BLE 5.0.

Rising Demand for Connected Wearable Devices Drives IoT Chip Market

• As per studies, global spending on connected wearable devices could cross USD 150 billion by 2030.
• Connected wearable devices include smartwatches, smartphones, laptops, smart shoes, and smart jewelry. They use these chips for performing different functions, and hence, their rising usage is driving the growth of the market.
• These devices combine internet connectivity with sensors and ease of integration, so as to perform functions based on user requirements.
• A single wearable device can measure multiple indicators of overall health, such as blood pressure, body temperature, alcohol, glucose, and lactate, levels, and body hydration, in the real time, thus allowing for the non-invasive monitoring of a person’s wellbeing.
• Similarly, smart shoes provide various benefits to athletes as they are able to measure blood pressure, stride length, speed, and speed.
• They can also track the calories burned and steps walked, and they can also be connected to smartphones through Bluetooth, to provide real-time suggestions on all these aspects of one’s routine.
• The fast adoption of such accessories because of their convenience drives revenue generation in the market.
• Wearable devices mostly use lower-frequency radiation, for the safety of individuals.
• Hence, the rising awareness among people about the benefits of such devices, including quick results and lower harm to the health of individuals, leads to their rising adoption.
• Manufacturers are also creating awareness by sharing information on social websites about the cybersecurity and benefits of such devices.
• Moreover, the demand for such components has grown alongside the shift of humans toward digital solutions and their strong emphasis on easier data access.

Data Security Concerns Hamper Market Growth

• The safety and privacy of data are on everyone’s minds, including governments, companies, individuals.
• The basic principle of IoT is to connect all kinds of machines to the internet and collect and share data automatically, without human intervention.
• As per studies, the number of IoT devices grew by 22% from 2022, reaching 18.8 billion by 2023-end.
• This, in turn, led to a massive growth in the volume of data they capture and share.
• Without proper security, these devices become easy access points for cybercriminals to steel the data and hold owners to ransom.
• Among all kinds of data, BFSI, healthcare, and defense data is the most lucrative due to its criticality and the benefits that stealing that could offer.
• Therefore, countries implement stringent rules to safeguard this information and penalize defaulters heavily for non-compliance.
• Such stringency mandates arming IoT devices and data sharing networks with robust cybersecurity measures.
• This could raise prices and restrict access for the masses in the short term, thus hampering the growth of the market.

IoT Chip Market Analysis

Hardware Analysis

Logic devices held the largest share in 2024, of 45%, due to their enhanced prototyping and reprogramming ability for debugging. Logic devices, especially field-programmable gate arrays (FPGA), are increasing in adoption because they can be customized by specifying the logic of the function of each logic block. The improved performance, programmability, and cost-efficiency are other factors expected to boost the adoption of such devices.

The rising demand for smartwatches and the increasing shipment of logic devices drive the market. FPGAs function faster compared to other devices and possess the ability of modifying, updating, and reconfiguring their functionality, to suit completely different and novel tasks. For instance, in India, more than 14 million wearables were shipped in 2021, over 12 million of which were smartwatches. The rising demand for such wearable for tracking the heart rate, respiration rate, and blood oxygen levels drives the growth of the market.

The sensor category will register the fastest growth during the forecast period, because of the increasing usage of temperature and pressure sensors in the manufacturing industry. The rising use of motion and position sensors in smart electronics, such as security cameras, alarms, and live video monitoring applications, is also expected to contribute in the growth of the sensor category.

Here are the categories of this segment:

• Processors
• Sensors (Fastest-Growing Category)
• Connectivity ICs
• Memory Devices
• Logic Devices (Largest Category)

Application Analysis

Consumer electronics dominate the market on account of the burgeoning smartphone, smartwatch, smart speaker, tablet, and smart glass sales. People already spend more than USD 1 trillion on such devices in 2024, which is a reflection of the rise in their spending power, shift in ideology of what is ‘necessary’, and their desire to boast their improved social status. Additionally, the increase in the access to internet encourages people to buy consumer electronics with ever-advancing features. The GSM Association estimates the number of people with internet connectivity in 2023 at 4.6 billion.

The healthcare category has the highest CAGR, of 6%. This is majorly attributed to the global trend of digital healthcare, mHealth, and telemedicine, which drives the demand for smartwatches with vitals tracking features and for dedicated remote patient monitoring devices. Similarly, continuous glucose meters, pedometers, EEG trackers, body temperature monitors, infusion pumps, pacemakers and ICDs, and mood monitors are becoming increasingly popular. These devices are being integrated with AI and other advanced technologies to analyze patient data in real time and enable quicker and more-effective interventions.

We studied the following applications:

• Healthcare (Fastest-Growing Category)
• Consumer Electronics (Largest Category)
• Building Automation
• Industrial
• Automotive & Transportation
• Agriculture
• Retail
• Others

IoT Chip Market Geographical Outlook

North America has the leading position in the IoT chip market.

The growth in the region is attributed to the rising R&D in the field, for new and advanced technologies. The increasing demand for consumer electronics is another key factor driving the growth in the region. Moreover, various key players have a strong foothold in the region, thus making it easier for end users to procure these semiconductor components.

The development of the advanced infrastructure raises the demand for better wireless connectivity solutions. This, in turn, leads to the rise in the demand for Logic devices and ICs, particularly for smart cities, which would be characterized by smart transportation systems and connected automobiles, as well as for residential applications. Moreover, governments in the region are taking steps to further this concept, to achieve sustainable living. For instance, in 2022, the Canadian government planned to invest USD 240 million to develop IoT chips and photonics technology.

APAC is the fastest-growing market, with a CAGR of 6.5% during the forecast period. This is attributed to the rapid urbanization, rising disposable income, and widening access to 4G and 5G connectivity. All these factors, in turn, propel the uptake of advanced consumer electronics, connected and semi-autonomous vehicles, and wearable medical devices, all of which contain IoT chips as a central component.

Similarly, the growing government focus on smart factories and Industry 4.0 drives the adoption of manufacturing systems with M2M connectivity. This is reflected in the initiation of nationwide programs in support of the industrial sector, such as Make in India, Made in China 2025 and Making Indonesia 4.0.

Another related driver for the market is the initiatives aimed at achieving sustainability, under which countries are developing smart cities and promoting the usage of smart, connected home appliances. IoT, M2M connectivity, AI, 5G, and other such technologies are the cornerstones of smart cities, which is why such initiatives hint at massive opportunities for regional and international IoT chip fabricators. Smart lights, ACs, fridges, washing machines, fans, and security & access control systems are already quite popular in countries such as India, China, Japan, and South Korea.

These regions and countries have been analyzed:

• North America (Largest Regional Market)
  • U.S. (Larger Country Market)
  • Canada (Faster-Growing Country Market)
• Europe
  • Germany (Largest Country Market)
  • U.K. (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • Japan
  • China (Largest Country Market)
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  •  Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

IoT Chip Market Share

The market is fragmented as a large number of international and regional companies manufacture IoT chips. Additionally, based on the specific application and connectivity technology, the chips are diverse in their designs and capabilities, which opens opportunities for new companies that focus on innovation.

IoT Chip Market News

• In December 2024, Texas Instruments Incorporated announced that it will receive USD 1.6 billion under the under the U.S. CHIPS and Science Act to advance semiconductor production in Utah and Texas.
• In December 2024, NXP Semiconductors NV announced plans to acquire Aviva Links in an all-cash transaction worth USD 242.5 million. This will support NXP’s efforts to integrate software-defined vehicles with ASA multi-Gigabit connectivity.
• In November 2024, Intel Corporation finalized plans to receive USD 7.68 billion of investment under the U.S. CHIPS and Science Act, which will enable the firm to boost semiconductor production in Arizona, Ohio, New Mexico, and Oregon.
• In October 2024, Qualcomm Technologies Inc. entered into a collaboration to supply its low-power processors with wireless connectivity and an array of IoT software for Honeywell International Inc.’s AI-powered devices for the energy sector.