One of the many positive aspects of the ongoing growth forecasted from Internet of Things (IoT) expansion, is the boost to individual components that particularly support the Machine-to-Machine (M2M) connectivity, wearable devices, and related systems and data storage and services. Some of the critical capabilities of wearables and IoT supporting devices are low power consumption, long battery life, low heat, light weight, and "smart" feature and data collection. These requirements particular favor sensors, notably microelectromechanical systems (MEMS), ultra-low-power serial flash memory, serial NOR, power management integrated circuits (PMIC), and next generation System-in-Package (SiP) and System-on-Chip (SoC) architectures are forecasted to grow, as EETimes discussed.
Chip market growth strengthening
This week updated global semiconductor sales forecasts for 2014 are coming in from various analysts showing significant growth for 2014 and beyond, despite concerns by some that we may not see as high positives as initially thought for 2014. According to Gartner, "[w]orldwide semiconductor revenue is on pace to reach $336 billion in 2014, a 6.7 percent increase from 2013, and up from the previous quarter's forecast of 5.4 percent growth […]."
Importantly, as Gartner and others such as Citi Research and Credit Suisse have remarked, the global semiconductor growth is supported by a wide base coming from increases in many chip sectors and applications. It is not often that such a positive outlook and DRAM have been mentioned together, but importantly that is the current case according to Bryan Lewis, research vice president at Gartner:
DRAM is once again expected to lead in 2014 with 18.8 percent annual growth, but other areas are also doing well, including analog, FPGAs, ASICs, and nonoptical sensors. ASICs are driven by Apple, with strong sales of its iPhone expected in the second half of 2014. ASICs will also benefit from the strong ramp of the latest video game console generation, particularly the Sony PS4 and Microsoft Xbox One. Overall semiconductor growth is widespread, with the nonmemory segment growing 5.2 percent in 2014, compared with only 0.8 percent in 2013.
Sensors see particular strength from IoT and wearables
As IC Insights recently reported, MEMS growth is poised to see a rebound after having slowed and held steady for the past two years.
Total MEMS-based semiconductor sales—sensors and actuators—are forecast to grow 14% in 2014 to reach a new record-high of $8.0 billion, surpassing the current annual peak of $7.1 billion set in 2011, says the 350-page O-S-D Report. The 2014 report shows MEMS-based sensor and actuator sales climbing 16% in 2015 to $9.2 billion […].
Importantly this outlook for MEMS translates to a double digit CAGR of 11.7% or US $12.2 billion over the five year period of 2013-2018, which is almost 2% higher than the previous five-year period. Granted, the automotive sector continues to drive significant amounts of MEMS demand, but the rise in IoT and especially wearable devices is quickly expanding the MEMS component offerings and spurring new innovations in sensing platforms and importantly for actuators. In the case of actuator sensors, we see the wearable device market in healthcare and biomonitoring as a key driver. As IC Insights underscores:
IC Insights expects actuator sales to strengthen and become less volatile as more devices move into high-volume systems and new application concepts finally taking off in the commercial market—such as inexpensive disposable lab-on-chip devices for low-cost drug development, DNA analysis, and infectious disease identification.
While much of the IoT discussion focuses around the smart life opportunities, there is a real growth component to the medical applications for wearable devices. As costs decrease and wearable and disposable diagnostic and drug delivery medical semi options expand and increase, not only will we see significant improvements to health care globally with particular focus and support for rural and poor sectors globally, but we will also see phenomenal unit volume growth. MEMS and the related components that support these types of wearable medical devices will expand IoT in truly phenomenal and meaningful ways.