According to Gartner, the processing, sensing and communications semiconductor device portion of the Internet of Things (IoT) will be a rapidly growing segment of the total semiconductor market, growing 36.2 percent in 2015, compared with the overall semiconductor market growth of 5.7 percent. Processing will be the largest revenue contributor to the IoT, semiconductor device forecast, at $7.58 billion in 2015, while sensors will see the strongest growth, with 47.5 percent growth in 2015.
The processing semiconductor device segment consists of microcontrollers and embedded processors, while the sensing semiconductor segment includes optical and nonoptical sensors.
"The demand for billions of things will ripple throughout the entire value chain, from software and services to semiconductor devices," said Alfonso Velosa, research director at Gartner.
"These 'things' will drive huge demand for individual chips. IoT semiconductor growth will come from industries spanning consumer, industrial, medical, automotive and others.”
Gartner's forecast that the automotive industry plays a huge role in the semiconductor demand from things through the end of the decade. Regulations for safety and a need for convenience and more autonomous vehicles are driving tremendous demand for new semiconductor devices silicon in the car.
In terms of LED lighting will be a huge volume play, both in lowering costs and enabling new services through its capability to connect, network and sense the environment.
As for Consumers, looking to enhance their lifestyles will also play a central role in growing IoT demand, which in turn will create more demand for semiconductors. The smart TV and STB revenue will continue to grow, due to the increased need for processing and relatively expensive BOM compared with a traditional embedded "thing."
Smart glasses and smartwatches also benefit from a larger BOM cost and will be in more demand as wearables become a bigger part of every consumer's life. Energy savings has always been a real value-add for the IoT.
"Gartner forecasts almost 30 percent growth through 2020 for IoT semiconductor revenue," said Dean Freeman, research vice president at Gartner.
"This revenue spans every conceivable industry and is driven by the immense scale of low-cost devices. Some in the industry believe this growth will transform the semiconductor industry. However, further investigation shows that the majority of IoT devices are commodity offerings. The truth is that inexpensive devices are one of the biggest enablers of IoT."
