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© ic insights Analysis | November 30, 2016

IoT and Automotive to drive IC market growth through 2020

A new IC Insights' report also projects good IC sales increases in medical electronics, digital TVs, and servers.
Integrated circuit sales for connections to the Internet of Things are forecasted to grow more than three times as fast as that of the growth of the total IC revenues during the last half of this decade, according to IC Insights. ICs used to embed Internet of Things (IoT) functionality into a wide range of systems, sensors, and objects are expected to generate sales of USD 12.8 billion in 2016.

Between 2015 and 2020, IoT integrated circuit sales are projected to rise by a compound annual growth rate (CAGR) of 13.3 percent compared to 4.3 percent for the entire IC market, which is projected to reach USD 354.7 billion in four years versus USD 287.1 billion last year. Strong five-year IC sales growth rates are also expected in automotive (a CAGR of 10.3 percent), medical electronics (a CAGR of 7.3 percent), digital TVs (a CAGR of 5.9 percent), and server computers (a CAGR of 5.4 percent).

Cellphone IC sales—the biggest end-use market application for integrated circuits—are expected to grow by a CAGR of 4.8 percent in the 2015-2020 period. Saturation in smartphone markets and economic weakness in some developing regions are expected to curb cellphone IC market growth in the next four years after sales increased by a CAGR of 10.8 percent between 2010 and 2015. Meanwhile, weak and negative IC sales growth rates are expected to continue in standard personal computers, set-top boxes, touchscreen tablets, and video game consoles.

The new 2017 IC Market Drivers report shows 2016 integrated circuit sales for IoT applications climbing nearly 19 percent compared to 2015 to an estimated USD 12.8 billion, followed by the automotive segment increasing about 12 percent to USD 22.9 billion, medical electronics rising 9 percent to USD 4.9 billion, and digital TV systems growing 4 percent to USD 12.9 billion this year. The report estimates IC sales growth in server computers being about 3 percent in 2016 to USD 15.1 billion, cellphones being 2 percent to USD 74.2 billion, and set-top boxes being 2 percent to USD 5.7 billion. Meanwhile, standard PC integrated circuit sales are estimated to be down 5 percent in 2016 to USD 54.6 billion while video game console IC revenues are expected to finish this year with a 4 percent drop to USD 8.9 billion and tablet IC sales are on track to decline 10 percent to USD 12.1 billion in 2016, according to IC Insights’ new report.

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