IoT and 5G—The perfect combination

The IoT (Internet of Things) has been around in business for a long time. But now, thanks to the new 5G mobile communications standard, it is able to tap into its full potential. You can find out what opportunities this opens up for the electronics manufacturing industry “live” at productronica 2021 from November 16–19 in Munich. VDMA Productronic acts as an ideal partner for the event.

The Internet of Things (IoT) can’t be slowed down—not even by the coronavirus pandemic. IoT remains one of the fastest-growing technology sectors. The market research firm Statista, therefore, expects that there will be nearly 31 billion IoT devices online by 2025. Other estimates predict more than double that amount.

According to Market Research Future, the global market for IoT in manufacturing alone is to grow to USD 751.3 billion by 2023, with a compound annual growth rate (CAGR) of 24 percent. Grand View Research predicts a global market volume of USD 1.11 trillion in the sector by 2028. The reasons for the analysts’ optimistic outlook include advancing automation, predictive maintenance, and supply chain management.

The IoT study from Computerwoche and CIO highlights this trend: 44 percent of the industrial businesses surveyed stated that they had increased their IoT budget during the pandemic. The funds primarily went toward quality control and logistics, followed by networked production systems and intelligent products.

More IoT thanks to 5G and 6G

Thanks to the new 5G mobile communications standard, there is now a significant expansion to the range of applications, not just in the industrial setting, but also in the areas of energy, health, science and consumers. With high bandwidth, strong transmission performance, and low latency, in many areas 5G represents the technical foundation for the next stage in the development of IoT.

However, this basis is not perfect. Researchers and companies are already beginning to prepare the next 6G mobile communications standard. This appears to achieve the things that were promised by 5G, according to an interview by Ivan Ndip from the Fraunhofer Institut IZM. 6G is to once again significantly increase the performance of mobile communications in terms of peak throughput, users’ data rates, reliability, latency, as well as energy efficiency and precision of localization. The use of terahertz frequencies from 100 GHz, therefore, allows for data rates up to a terabit per second and latencies of around 100 microseconds – fifty times the data rates of 5G and a tenth of the latency. All with a much higher concentration of connections (devices per square kilometer). Here, 5G can “only” support up to one million networked IoT devices in an area of one square kilometer. 6G increases this tenfold.

Semiconductor market benefits from IoT and 5G

The rapid growth of networked IoT devices, therefore, demands not only more and more semiconductors but also increasingly high-quality components for them. This applies to all industry segments and IoT relatives (IIoT, IoMT, AIoT, etc.).

As such, IoT analytics expects the IoT semiconductor market to increase from USD 33 billion (2020) to USD 80 billion by 2025. The focus is on IoT microcontrollers (MCUs), as well as chipsets for IoT connectivity, IoT AI, and IoT security.

However, the lion’s share goes to IoT connectivity chipsets, with 35 percent. Here, cellular IoT chipsets are now playing a leading role. For this segment, IoT analytics expects a CAGR of 37.5 percent between 2020 and 2025, driven by 5G and “Low Power Wide Area” (LPWA).

Yet, according to analysts, the IoT semiconductor market is still in its infancy. This is expected to change in the years to come. The share of IoT-specific semiconductors will increase from 7 to 12 percent between 2019 and 2025. The Internet of Things is starting to establish itself as a driving force for the semiconductor industry. However, this means that chip manufacturers also increasingly need to meet the typical requirements of IoT, such as ultra-low power, small form factors, and integrated security.