As demand for smart city applications is not as expected, market research firm IC Insights has revised its forecast for Internet of Things (IoT) semiconductor revenue for the next four years. IC Insights pointed out that the number of connected devices in the world has significantly exceeded the number of Internet users. Currently, the number of Internet-connected devices in the Internet is more than six times that of the Internet population. However, despite the continued increase in the number of connected devices, IC Insights will reduce its IoT-related semiconductor revenues by $1.9 billion over the next four years, mainly due to the lack of demand for smart city applications such as smart meters and infrastructure.
According to the latest forecast from IC Insights, the overall sales of IoT semiconductors will still grow by 19% in 2016, reaching $18.4 billion. However, according to the market-driven report submitted by the agency, it is estimated that the composite annual average growth rate (CAGR) of the Internet of Things semiconductor market was 21.1% between 2014 and 2019, and now it is revised down to 19.9%; Sales in the connected semiconductor market were $29.6 billion, down from the previous forecast of $31.1 billion.
The main reason for this change is the semiconductor revenue forecast adjustment for connected city applications; IC Insights originally estimated that the CAGR for this type of application between 2014 and 2016 was 15.5%, and now only 12.9%. However, in the field of connected vehicle applications, its semiconductor revenue CAGR increased from the original estimate of 31.2% to 36.7%. It is estimated that by 2019, IoT semiconductor sales in connected cities will reach $15.7 billion, and sales in the connected car chip market will climb from the original forecast of $1.4 billion to $1.7 billion. Overall, IoT semiconductor revenues in connected cities in 2016 are expected to grow 15% to approximately $11.4 billion, while IoT semiconductor revenues in connected cars are estimated to grow 66% to $787 million.
On the other hand, IC Insights also slightly revised the wearable application IoT semiconductor sales forecast. This application market has a growth rate of 421% in 2015, reaching $1.8 billion. After Apple entered the smart watch market in 2015, it is estimated that the wearable IoT semiconductor market will grow 22% in 2016, reaching 22%. Billions of dollars can grow to $3.9 billion by 2019.
At the same time, IC Insights' forecast for semiconductor sales in connected home and industrial IoT has not changed. The agency estimates that the connected home IoT semiconductor market will grow 26% in 2016 to approximately $545 million, while the industrial IoT chip market will grow 22% to around $3.5 billion. The industrial IoT semiconductor market has an estimated CAGR of 25.7% between 2014 and 2019, and its revenue can grow from $2.3 billion in 2014 to $7.3 billion in 2019.
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