Figure 1 – New connections to the IoT
The report shows about 30.0bn internet connections are expected to be in place worldwide in 2020, with 85% of those attachments being to web-enabled “things” (meaning a wide range of commercial, industrial, and consumer systems, distributed sensors, vehicles and other connected objects) and 15% for electronics used by humans to communicate, download and receive streams of data files and search for online information. It was the opposite of that in 2000, with 85% of 488m internet connections providing human users with online access to the World Wide Web and the remaining 15% serving embedded systems, remote sensing and measurements, control and M2M communications.
Strong double-digit increases in the IoT market will drive up IC sales in IoT applications by a CAGR of 15.9% between 2015 and 2019 to about $19.4bn in the final year of this decade (Figure 2), according to the new report. IoT applications will also fuel strong sales growth in Optoelectronics, Sensors/actuators and Discrete semiconductors (O-S-D), which are projected to rise by a CAGR of 26.0% between 2015 and 2019 to $11.6bn in four years. The IC Market Drivers report shows MCUs and SOC MPUs topping IC sales growth with a CAGR of 22.3% in the next four years, followed by memories at 19.8%, ASSPs at 16.4%, and analog ICs at an annual growth rate of 12.7%.
Figure 2 – IoT semiconductor growth rates
In the 2014-2019 forecast period of the IC Market Drivers report, wearable systems are projected to be the fastest growing IoT application with sales increasing by a CAGR of 59.0%, thanks in great part to a 440% surge in 2015 due to the launch of Apple’s first smartwatches in 2Q15. Sales of IoT-connected wearable systems are expected to reach $15.2bn in 2019 compared to $1.5bn in 2014 and about $8.1bn in 2015.
Meanwhile, connected vehicles (passenger cars and light trucks) are expected to be the second fastest market category for IoT technology with revenues growing by a CAGR of 31.5% between 2014 and 2019 to $5.3bn in the final year of this decade.