Industrial semiconductor market to grow to $61bn in 2021

Semicast defines the industrial market to include traditional areas such as factory automation, motor drives, lighting, building automation, surveillance, test and measurement and power and energy, as well as medical and industrial transportation equipment such as agriculture, construction and mining; aerospace and defence is excluded.

Compared with a total semiconductor market of around $340bn, the industrial sector is estimated to have accounted for about 12% of the overall semiconductor TAM in 2015, a larger proportion than the automotive sector. Cumulative industrial semiconductor demand from 2015 to 2021 is projected to total over $350bn, reinforcing the conclusion that opportunities in the industrial sector should not be overlooked by semiconductor suppliers. The industrial sector includes many obscure, somewhat dull product categories, such as pressure measurement, proximity sensors and motion detectors, which offer none of the glamour and allure of smart phones, smart watches or wearables, but which nonetheless are manufactured in volumes of tens of millions of units per year and offer a stable and dependable revenue stream.

The IoT has been the key focus area for the semiconductor industry for the last five years and it is Semicast’s view that Industrial IoT can be broadly described as intelligence and connectivity being added to ever smaller, distributed, remote industrial devices. Industrial IoT is not viewed by Semicast as a growth application for industrial semiconductors itself; instead this intelligence and connectivity is provided by the addition of sub-dollar 32-bit microcontrollers, together with short-range wireless communications ICs based on standards such as 6LoWPAN, Bluetooth/BLE, LoRa, NFC, Sub-1/2.4GHz, WiFi and ZigBee. Colin Barnden, Principal Analyst at Semicast Research and study author, commented: “These intelligent connected devices generate the Little Data which has never previously been captured, to be processed locally or fed straight to the Cloud for Big Data analytics, thus creating the Industrial IoT of smart buildings, cities, factories, grid, medical, payment and security.”

Texas Instruments was the leading vendor of semiconductors to the industrial sector in 2015, ahead of Infineon Technologies. Intel passed STMicroelectronics to become the third largest vendor following the acquisition of Altera, with Renesas Electronics completing the top five.