Slower smart cities growth leads to lower IoT chip forecast

September 14, 2016 // By Peter Clarke
Lower sales projections for connected cities has prompted IC Insights to cut $1.9 billion from the sales of semiconductors for IoT applications over the next four years.

New connections to the Internet of Things are now increasing by more than 6x the number of people being added to the Internet of Humans (IoH) each year, the market research firm said.

Total IoT semiconductor sales are still expected to rise 19% in 2016 to $18.4 billion. However, the firm has trimmed the compound annual growth rate (CAGR) it foresees for IoT semiconductors over the period 2013-to-2019 from 21.1% to 19.9%. Semiconductor sales for IoT system functions are now expected to reach $29.6 billion in 2019 versus the previous projection of $31.1 billion in the final year of the forecast.

Annual IoT semiconductor market and growth from 2013 to 2019. Source: IC Insights.

The most significant changes in the new outlook are that semiconductor revenues for connected cities applications are projected to grow by a CAGR of 12.9% between 2014 and 2019 (down from 15.5% in the original forecast) while the connected vehicles segment is expected to rise by a CAGR of 36.7% (up from 31.2% in the previous projection).

IoT semiconductor sales for connected cities are now forecast to reach $15.7 billion in 2019 while the chip market for connected vehicle functions is expected to be $1.7 billion in 2019, up from the previous forecast of $1.4 billion.

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