IoT is driving an analog opportunity

May 27, 2015 // By Blaine Bateman
Blaine Bateman tries to quantify the analog opportunity being driven by the Internet of Things revolution.

I've written before about the impact the Internet of Things (IoT) will have on electronics sales including the special role played by analog devices in IoT. Most recently, in my Planet Analog blog entitled Digitizing Analog Sensor Data for the IoT, I argued that because of all the sensors, integrated packages including analog front ends for sensor signal conditioning are likely to see growth. Here I want to take some of the numbers out there and bracket what the opportunity might be.

Last year IC Insights noted that global unit shipments of semiconductors could exceed one trillion devices in 2016. They also said in a mid-year update that Analog IC shipments were outstripping all other categories in terms of growth, forecasting nearly 9 percent CAGR (Compound Annual Growth Rate) for Analog IC sales from 2013 to 2018. Market data firm IHS said in March that all Industrial semiconductors, of which Analog is the largest category, would grow by nearly 10 percent a year to over $55 billion annually by 2018. Separately, IHS reported total semiconductor sales in 2014 were $355 billion; these figures put Industrial ICs at about 12 percent of total semiconductors. I think that all Analog IC sales are as much as 16 percent of all semiconductor sales. Using these figures my rough estimate is that Analog could be between $46 billion and $62 billion in 2015 growing at a 9 to 10 percent rate. For the sake of analysis, let me assume ASP (average selling price) of $0.50, and conclude that analog IC unit shipments will be around 100 billion units in 2015.

Ron Exler, senior strategist with Saugatuck Technology, a Connecticut-based subscription research and strategy consulting service, said in a recent post: "The Industrial Internet is a term coined by General Electric. It involves the massive systems that make up society’s infrastructure. These systems include energy generation and distribution, transportation management, healthcare diagnostics, and manufacturing monitoring. Industrial Internet is the IoT applied to industrial applications with analytics to provide context-aware intelligence."

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