It's still a huge market, but IC Insights sees slower revenue projections for government projections.
There's little doubt that the Internet of Things represents a massive opportunity for the semiconductor industry, though quantifying the size of that opportunity remains at best a work in progress.
Market research firm IC Insights Inc. recently trimmed its long-term forecast for semiconductor sales driven by IoT, citing lower revenue projections for connected cities applications such as smart meters and infrastructure. The market research firm shaved nearly $1 billion off its 2020 IoT semiconductor forecast, saying it now it expects the total to be about $31.1 billion.
IC Insights still expects IoT chip sales to rise by 16 percent in 2017 to reach $18.3 billion. But the firm reduced its compound annual growth rate (CAGR) projection of IoT chip sales to 14.9 percent from 2015 to 2020, down from a previous CAGR estimate of 15.6 percent.
The firm still expects IoT chip sales for connected cities to post a CAGR of 8.9 percent between 2015 and 2020, but the estimate is down from an original forecast of 9.7 percent. IC Insights said the lower growth projection for connected cities applications is "a result of anticipated belt tightening in government spending around the world and the slowing of smart meter installations now that the initial wave of deployments has ended in many countries."
IC Insights also trimmed its semiconductor sales forecast for wearable IoT applications, saying it now expects a CAGR of 17.1 percent from 2015 to 2020. The firm had previously predicted a CAGR of 18.8 percent for that time frame.
—Dylan McGrath is the editor-in-chief of EE Times.