IoT News-Due to global supply shortages, 20 million cellular IoT chips will be lost in 2021

emphasize:

• Need 20 million Cellular IoT chipset Due to supply shortages, it will not be able to meet in 2021.According to IoT analysis Latest report In terms of cellular IoT chipsets, the industry’s year-on-year growth rate is expected to be far below 9% in 2021. At the same time, prices are expected to rise sharply.
• Qualcomm leads the global cellular IoT chipset market (based on shipments) with a 43% market share in 2020.

IoT Analytics is a leading provider of market insight and competitive intelligence for the Internet of Things (IoT) and Industry 4.0. It launched an in-depth cellular IoT chipset market tracker this month, which can provide quarterly revenue and shipments for 13 companies. A cellular connectivity chipset deployed in the Internet of Things.

IoT analysis predicts global Cellular IoT chip market At a compound annual growth rate (CAGR) of 28% between 2021 and 2026, supply issues in 2021 will have a significant impact.

What is a cellular IoT chipset?

Every Internet of Things device that uses cellular connections (such as 2G, 3G, 4G, 5G, LTE-M, and NB-IoT) uses a cellular Internet of Things chipset. The chipset can be directly embedded in the printed circuit board of the device, or it can be embedded in the IoT module placed in the device. The research presented in this article focuses on the larger of the two parts: Cellular IoT chipset embedded with IoT modules.

Current market environment: affected by global chip shortage

In 2020, COVID-19 has affected the demand and supply of chips. Supply is reduced because production sometimes stops and the supply chain and raw material supply are incomplete. In the first half of 2020, due to uncertainty and budget freezes, chip demand declined. In the second half of 2020, demand rebounded, but supply was often interrupted. This led to a shortage of supply, which first affected the automotive industry and then expanded to other areas such as smartphones, televisions, games and the Internet of Things. Declining demand in 2020 and supply shortages at the end of the year have resulted in a gap of 33 million cellular IoT chipsets. If all went well, these chipsets could have been shipped.

In 2021, the chip shortage will continue. Over 3,000 analyze 11% of listed companies mentioned a “chip shortage” in the second quarter (Q2) conference call of 2021.

Commenting on the research results, Knud Lasse Lueth, CEO of IoT Analytics, said:

“IoT Analytics predicts that due to limited production capacity and ongoing COVID-19 restrictions in certain regions, there will be an additional shortage of 20 million cellular IoT chipsets, which has led to serious supply chain issues such as lack of ships and containers and port congestion .”

Satyajit Sinha, Senior Analyst at IoT Analytics, added: “It is estimated that by 2021, the market will grow by 9% year-on-year, but if there are no supply restrictions, the market will grow even more.”

According to market leaders TSMC and Qualcomm, this situation may improve in early 2022:

“Until early 2022, our options are limited. From the second half of that year, many investments will begin to produce results and the situation will improve,”
Akash Palkhiwala, CFO of Qualcomm

“Due to geopolitical and pandemic uncertainty, customers are preparing for higher levels of inventory to ensure stable supply. Therefore, our production capacity will remain tight throughout 2021.”, C. C Wei, CEO of TSMC

Cellular IoT chipset market: Qualcomm easily leads

Five manufacturers currently dominate the cellular IoT chipset market: Qualcomm, MediaTek, HiSilicon, Intel, and Unigroup Zhanrui. These five companies accounted for 93% of global cellular IoT chipset shipments in 2020.

Qualcomm will lead the market with 43% market share (based on shipments) in 2020. In terms of income, Qualcomm has a higher share. In recent years, the key to the company’s success in the market lies in its global scale and influence, in-depth cooperation with module manufacturers, and a large number of operator certifications. Qualcomm has also shortened the innovation cycle, regularly launching new IoT chips, and often releases upgrades to existing chips in less than a year’s cycle. In the past, 4G LTE IoT chipsets promoted Qualcomm’s sales, but the future depends on the speed at which 5G takes off in the market. The view of IoT Analytics is that the demand for 5G is now on the rise and will become the main driving force of the cellular IoT chipset market in the next few years.

Compared with Qualcomm, MediaTek and HiSilicon’s sales are mainly driven by NB-IoT chipsets.

Connectivity technology trends: NB-IoT, LTE-Cat 1, and 5G

The technology portfolio of cellular IoT connections is still very active. In addition to the rise of 5G and the sharp decline of 2G and 3G, there are some current trends:

• Narrowband Internet of ThingsIn 2020, NB-IoT chipsets will account for more than one-third of global cellular IoT chipset shipments.
• LTE-Cat 1. LTE-Cat 1 (a subset of 4G technology) will grow 43% year-on-year in 2020. Especially the Qualcomm MDM9207-1 chipset has made a major contribution to the growth of LTE-Cat 1. The use of another chip, UNISOC 8910DM, has increased by 300% in 2020 (YoY), driving the development of the updated LTE-Cat 1 bis sub-segment, which now accounts for 23% of all LTE-Cat 1 shipments.
• 5G. It is expected that 5G chipsets will be distributed on a large scale in 2021. IoT Analytics predicts that 5G IoT chipsets will account for nearly half of global cellular IoT chipset revenue in 2021, although in terms of shipments, this proportion is much smaller.

Industry adoption trends: tracking applications and 5G in cars

The cellular IoT connection technology exists in almost all vertical fields, from asset tracking in the transportation, supply chain, and logistics industries to remote monitoring in the healthcare industry. Among them, our research shows two recent trends:

• Transportation and logistics use cases are on the riseThe transportation, supply chain and logistics verticals account for 30% of the global cellular IoT chipset shipment market. In this market segment, what will grow in 2020 is not traditional automotive and telematics applications, but tracking applications that help companies locate goods in the supply chain. Shipments of chipsets used for tracking applications in 2020 increased by 22% year-on-year, while the overall market growth rate was 3%.
• 5G applications in carsIn 2021, despite the continued shortage of chips in the automotive sector, the adoption of 5G in the embedded automotive sector is expected to increase by more than 50% year-on-year.

Conclusion and Outlook

It is estimated that there will be 30 billion IoT devices by 2025, and the demand for chips is very large, which will drive the overall demand for IoT semiconductors. Although the cellular Internet of Things only accounts for a small part of these 30 billion devices, it is one of the most dynamic technology landscapes. Far ahead on the curve.

Due to the aforementioned disruption, the market has undergone structural changes in the past 1.5 years. Chipset suppliers need to reconsider their positioning in the technologies they provide, the vertical areas to be solved, their reliance on specific suppliers, and the procurement of production capacity.

From a broader perspective, with the market growing so fast, current supply challenges and 20 million missing chips seem important today. However, after a few years, when the interruption is resolved and the supplier reacts to structural changes, their importance will diminish. Until then, 2020 and 2021 will look like dents on the curve, nothing more.