IC Insights cuts IoT chip forecast – again

June 18, 2017 // By Peter Clarke
Market researcher IC Insights has reduced its market forecast for chips used in Internet of Things applications for a second time.

The latest move is mainly because of the slowness of rolling out smart city systems such as smart electricity meters and a reduced forecast for wearable systems, the forecaster said. IC Insights also dropped its forecast in September 2016, also due to lower sales projections for connected cities (see IC Insights cuts IoT chip forecast ).

The latest update to the forecast now shows total 2017 sales of IoT semiconductors rising about 16.2 percent to $21.3 billion from 2016 final revenues reduced to $18.3 billion from a previous estimate of $18.4 billion, given in December 2016. The more significant change long term is that IC Insights' estimate of the compound annual growth rate (CAGR) over the period 2015 to 2020, which has been reduced to 14.9 percent from 15.6 percent in IC Insights' projection of December 2016.

IoT semiconductor market 2014 to 2020. Source: IC Insights.

As a result IC Insights has reduced its total semiconductor sales forecast for system functions related to the Internet of Things in 2020 to $31.1 billion versus the previous projection of $32.0 billion.

IoT semiconductor revenues for connected cities applications are now projected to grow by a CAGR of 8.9 percent between 2015 and 2020 – down from 9.7 percent in IC Insights’ original forecast. Meanwhile, the IoT semiconductor market for wearable systems is expected to show a CAGR of 17.1 percent versus 18.8 percent in the previous projection. Slower growth in semiconductor sales for wearable systems is primarily related to IC Insights' reduced forecast for smartwatch shipments through 2020.

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News articles:

IC Insights cuts IoT chip forecast

Real world – not IoT – drives industrial chip ranking

IoT: a $2 trillion market in 2017, says Gartner


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