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Gartner Says the Processing, Sensing and Communications Semiconductor Device Portion of the IoT Is Set for Rapid Growth
Automotive, LED Lighting and Home Consumer Segments to Drive a Huge Portion of Overall Semiconductor Growth Through 2020
STAMFORD, Conn., November 3, 2014 — 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 per cent in 2015, compared with the overall semiconductor market growth of 5.7 per cent, according to Gartner, Inc. Processing will be the largest revenue contributor to the IoT semiconductor “things” device forecast, at $7.58 billion in 2015, while sensors will see the strongest growth, with 47.5 per cent 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.” (see Figure 1)
Figure 1. IoT Semiconductor Revenue by Electronic Equipment (Millions of Dollars)
Source: Gartner (October 2014)
Gartner's forecast for the top 15 things, based on semiconductor revenue, highlights some very interesting trends:
· The automotive industry plays a huge role in the semiconductor demand from things through the end of the decade, with six segments in the top 15. Regulations for safety and a need for convenience and more autonomous vehicles are driving tremendous demand for new semiconductor devices silicon in the car. One example of how the IoT will transform an automobile is the use of predictive maintenance. Using small sensors throughout the engine, predictive maintenance allows for a better experience for the consumer while enabling tremendous cost savings for both the consumer and the automotive dealer.
· 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.
· 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 set-top box revenue will continue to grow, due to the increased need for processing and relatively expensive bill of materials (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 per cent 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."
More detailed analysis is available in the report “Forecast Analysis: IoT Endpoints — Sensing, Processing and Communications Semiconductors, Worldwide, 2014 Update." The report is available on Gartner's web site at http://www.gartner.com/document/2884217.
Analysts will unveil the new GartnerIoT forecast at the Gartner Symposium/ITxpo 2014,9-13 November in Barcelona, Spain. For more information about the conference please visit www.gartnerevent.com/eu/sym. Press can register by contacting Laurence Goasduff at .
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Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the valuable partner to clients in over 9,100 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, we work with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA., and has 6,600 associates, including more than 1,500 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.
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