The IoT Chip market is estimated at US$25.837 billion for the year 2019. An IoT chip is a small electronic device that is integrated into numerous electronic devices, machines, and objects. The objective of these chips is to connect the devices to wireless networks and receive or send data. The growth of this market is majorly attributed to the growing demand for electronic devices. Impressive economic growth, rising disposable income, and improvement in the standard of living are driving the demand for electronic devices, especially in developing economies such as China, India, and Brazil among others. The miniaturization of the electronic devices is leading to more complex designing that requires several functionalities to be deployed on a single chip, which is boosting the growth of the market. The demand for such design is increasingly gaining traction in the market owing to its burgeoning use across industries such as consumer electronics, automotive, communication and technology, and healthcare among others. Growing penetration of Internet of Things (IoT) in the automotive and other industries is one of the major drivers that are boosting the market growth. Therefore, key players are partnering together to simplify the deployment of the Internet of Things (IoT) for the industries. For instance, recently in March 2019, AT&T and Vodafone have partnered to cooperate on IoT in everything to do with the connected vehicles for the North American, European, and the African market.
In addition, the increasing household consumption expenditure also plays an important role in increasing the demand for consumer electronics, which further increases the IoT Chips. For instance, as per the World Bank, the household’s final consumption expenditure has grown remarkably from US$37.783 trillion in 2010 to US$48.611 trillion by 2018(Source: The World Bank Group). Moreover, companies are increasing their research and development expenditure to manufacture cost-effective wearable technology for the masses. Therefore, increasing research and development expenditure coupled with rising demand for wearable technology is augmenting the demand for these chips over the forecast period.
Rising penetration of IoT
Internet of Things (IoT) is one of those technologies that is set to become ubiquitous in almost every industry. The affordability of sensor technology is playing an important role in the burgeoning adoption of IoT across industries. Its penetration in industries is leading to more complexity at the circuit level that requires an integration of a number of designs on a single chip, thus boosting the demand for IoT chip. Since, IoT chip applications are gaining traction in the market owing to their utilization in a number of applications such as auto-pilot cars, electronic devices, home automation, and others, the demand for IoT chip is poised to grow in the upcoming years. In the automotive sector, IoT has gained adoption in several areas such as in-vehicle infotainment, predictive maintenance, security, surveillance, and safety, and cognitive insights for management among others which has significantly driven the need for more sophisticated electronic control units, therefore augmenting the market growth.
Rising investments in 5G Technology
The growing internet penetration coupled with rapid advancements in wireless technology is further expected to propel the market growth opportunities during the coming years. A significant surge in the number of internet users across the globe is further anticipated to propel the investments by the major service providers in order to develop more fast and advanced services to cater to the growing user needs. For instance, in 2010 there were only 28.753% people across the globe were using the internet, and this number increased to 49.723% by 2017 (Source: The World Bank Group), a rising trend is expected during the coming years, which will further snowball the demand for fast and high-speed internet. Budding investments for the deployment of 5G technology is further expected to drive the growth of the market during the forecast period and beyond. The incorporation of 5G technology is considered as the next generation of mobile internet connectivity, which is expected to offer better speeds, more reliable connections from the current technology. Moreover, 5G is expected to operate on much higher frequencies which are further anticipated to the adoption of new interface and component technologies which may further positively impact the growth of the market.
The Automotive Segment is projected to show robust growth
On the basis of application, the global IoT chip market has been classified into consumer electronics, healthcare, automotive, industrial, BFSI, communications and technology and others. The automotive segment is projected to show robust growth opportunities for the market to expand throughout the forecast period and beyond on account of significant growth in the adoption of connected and autonomous vehicles. Connected vehicles are considered to have the potential to transform the overall transportation network by creating safer road transport. In addition, the connected vehicle technology will change that paradigm by giving people the tools to avoid crashes thus an increasing trend of their adoption is expected which is further anticipated to positively impact the growth of the market during the coming years. Similarly, rapid development and innovation in the ‘Advanced Driver Assistance Systems’ is also projected to augment the market growth on account of rising investments in Level 4 and Level 5 autonomous vehicles, wherein Level 4 no human interaction and in Level 5, human driving is completely eliminated, to make these systems safe, better connectivity technology is for required safe and reliable use.
Prominent key market players in the IoT chip market include Intel Corporation, Qualcomm Technologies, Inc., Texas Instruments Incorporated, Cypress Semiconductor Corporation, and NXP Semiconductors among others. These companies hold a noteworthy share in the market on account of their good brand image and product offerings. Major players in the IoT Chip market have been covered along with their relative competitive position and strategies. The report also mentions recent deals and investments of different market players over the last two years.