Global IoT Chip Market Size

IoT Chip Market Analysis

The Global IoT Chip Market size is estimated at USD 0.58 trillion in 2024, and is expected to reach USD 1.16 trillion by 2029, growing at a CAGR of 14.70% during the forecast period (2024-2029).

Due to demand-side and supply-side factors, the growth in the number of IoT connections slowed down in specific sectors during the pandemic. Some IoT contracts were canceled or postponed due to firms going out of business or scaling back their spending. The rising demand for automation and the growing application of IoT devices across various end-user verticals, such as healthcare, consumer electronics, industrial, automotive, BFSI, and retail, are further driving the adoption of IoT devices.

• The growth is primarily attributed to the integration of connectivity competence in a wide range of devices and applications, coupled with the development of different networking protocols that have appreciably driven the growth of the IoT chip market across multiple end-user industries.
• In March 2022, two Indian researchers working at the Massachusetts Institute of Technology (MIT) built a low-power security chip designed to prevent side-channel attacks (SCA) against Internet of Things (IoT) devices. SCA uses vulnerabilities to allow information gleaned from the indirect effects of the behavior of system hardware rather than directly attacking programs and software.
• With the rapid increase in the number of IoT devices, the chip requirement for building these IoT devices is also expected to rise over the forecast period. Along with this, reducing energy consumption combined with the miniaturization of chips will be the priority of manufacturers.
• The increased deployment of 5G provides quick and efficient connectivity for Internet-of-Things (IoT) devices. Investments in the deployment of 5G technology are expected to drive market growth during the forecast period and beyond. The integration of 5G technology is seen as the next generation of mobile internet connectivity and is expected to offer faster and more reliable connections than current technologies. Thus, the booming IoT space and the supporting chip makers are expected to increase demand for IoT chips during the forecast period.
• Rising security concerns, such as software vulnerabilities and cyberattacks, may discourage many customers from using IoT devices. Such security concerns in the Internet of Things are particularly essential to organizations in healthcare, finance, manufacturing, logistics, retail, and other industries that have already started adopting IoT systems.
• With the COVID-19 outbreak worldwide, the market was significantly affected as severe supply chain shortages occurred across the globe. Moreover, the restriction imposed by governments across the globe on the movement of people also impacted production. However, as the world recovers from the pandemic, the need for more automated and advanced processes has become a key aspect of success. As such, the market for more IoT-enabled devices is anticipated to rise in the future, thereby creating strong demand for IoT chips across the globe.