IoT Chips Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Product (Processor, Sensor, Connectivity IC, Memory Device, and logic Device), By End-user (Healthcare, Consumer Electronics, Industrial, Automotive, BFSI, Retail, and Building Automation), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 1.26 Trillion
CAGR (2026-2031)	17.70%
Fastest Growing Segment	Industrial
Largest Market	Asia Pacific
Market Size (2031)	USD 3.35 Trillion

Market Overview

The Global IoT Chips Market will grow from USD 1.26 Trillion in 2025 to USD 3.35 Trillion by 2031 at a 17.70% CAGR. IoT chips are specialized integrated circuits, comprising microcontrollers, sensors, connectivity modules, and memory units, expressly engineered to facilitate data processing and wireless communication within connected device ecosystems. The market is fundamentally supported by the escalating demand for operational efficiency through industrial automation and the simultaneous expansion of high-speed 5G infrastructure which necessitates high-performance processing components. This robust demand is reflected in the broader component industry where, according to the World Semiconductor Trade Statistics, in 2024, the Logic integrated circuit category which encompasses key IoT processors was projected to increase by 16.9 percent.

Despite this positive trajectory, the market faces a significant challenge regarding the heightened security and privacy risks associated with massive device interconnectivity. The rapid proliferation of endpoints expands the potential attack surface for cyber threats, compelling manufacturers to invest heavily in complex encryption and hardware-level security standards. This requirement for rigorous security protocols often increases development costs and time-to-market, potentially impeding the pace of adoption across cost-sensitive enterprise and consumer sectors.

Key Market Drivers

The deployment of 5G and advanced wireless connectivity serves as a foundational driver, necessitating the production of integrated circuits that support high-bandwidth and low-latency data transmission. This network evolution forces semiconductor manufacturers to engineer chips with enhanced radio frequency capabilities and energy-efficient modems suitable for massive machine-type communications. The surge in network accessibility directly correlates with hardware adoption, as device makers require compatible components to leverage faster speeds for applications ranging from autonomous vehicles to remote monitoring. According to 5G Americas, June 2024, in the 'Global 5G Connections Jump' press release, global 5G wireless connections rose to 1.9 billion in the first quarter of 2024, illustrating the expanding infrastructure that underpins the demand for advanced connectivity modules.

Concurrently, the integration of artificial intelligence and edge computing capabilities is transforming component architecture by shifting data processing from the cloud to the device level. This trend compels chipmakers to embed dedicated neural processing units and accelerators within microcontrollers, enabling real-time analytics and automated decision-making in industrial and consumer applications. This requirement for on-chip intelligence is driving substantial upgrades in semiconductor performance specifications to manage complex algorithmic workloads. According to Rockwell Automation, February 2024, in the 'State of Smart Manufacturing Report', 83 percent of manufacturers expected to deploy generative AI in their operations in 2024, spurring the need for processors capable of handling data-intensive tasks. To meet these evolving technological needs, according to SEMI, in 2024, global semiconductor manufacturing capacity was projected to rise by 6 percent, ensuring the supply chain can accommodate the increased production volume of intelligent sensors and logic devices.

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Key Market Challenges

The primary challenge hindering the Global IoT Chips Market is the heightened security and privacy risk associated with widespread device interconnectivity. As the number of connected endpoints multiplies, the potential attack surface for cyber threats expands, creating critical vulnerabilities within the ecosystem. This situation compels semiconductor manufacturers to integrate complex encryption protocols and hardware-level security measures directly into their chip designs to prevent unauthorized access and data breaches.

This requirement for rigorous security standards directly impacts market growth by increasing development costs and extending the time-to-market for new components. The engineering resources required to implement secure enclaves and cryptographic accelerators significantly raise the final price of the chips. Consequently, cost-sensitive sectors such as consumer electronics and industrial logistics may delay adoption due to these rising expenses. The magnitude of this security burden is evident in the sheer volume of devices requiring protection. According to the GSMA, in 2024, licensed cellular IoT connections reached 3.5 billion, representing a massive scale of endpoints that necessitate distinct security architecture. The financial and technical strain of securing such a vast infrastructure restricts the pace at which manufacturers can deploy affordable solutions.

Key Market Trends

The Accelerated Adoption of RISC-V Instruction Set Architecture is fundamentally reshaping the market by offering a license-free, open-standard alternative to proprietary processor designs. This architecture allows manufacturers to custom-design cores optimized for specific IoT workloads, such as ultra-low power sensing or embedded processing, without the prohibitive royalty costs associated with traditional architectures. This flexibility is driving massive volume shipments as major semiconductor players integrate these cores into their portfolios to enhance design agility and supply chain resilience. According to the RISC-V International Newsletter, December 2024, NVIDIA estimated that it would ship between one and two billion RISC-V cores in 2024 alone, underscoring the rapid industrial transition toward this modular architecture for embedded applications.

Concurrently, the Adoption of Next-Generation Wireless Standards, particularly Wi-Fi 7, is addressing the critical need for deterministic latency and cross-vendor interoperability within local device networks. Unlike the broad coverage focus of 5G, Wi-Fi 7 utilizes features like Multi-Link Operation (MLO) to simultaneously transmit data across multiple bands, ensuring the reliability required for dense industrial IoT environments and bandwidth-heavy smart home applications. This evolution is rapidly materializing in commercial hardware as device makers upgrade connectivity modules to support these advanced specifications. According to the Wi-Fi Alliance, January 2024, in the 'Wi-Fi Certified 7 Arrives' press release, it was expected that more than 233 million Wi-Fi 7 devices would enter the market in 2024, signaling a major shift toward these high-efficiency local connectivity solutions.

Segmental Insights

The Industrial segment currently leads growth within the Global IoT Chips Market due to the accelerating adoption of smart manufacturing and automation technologies. Factories are increasingly integrating connected sensors and processors to enable predictive maintenance and real-time monitoring of machinery, which optimizes operational efficiency and reduces downtime. This expansion is supported by the rising implementation of Industry 4.0 principles requiring consistent data exchange across production lines. Furthermore, frameworks established by organizations like the Industrial Internet Consortium facilitate this growth by promoting standardization and interoperability for secure connectivity in complex industrial environments.

Regional Insights

Asia Pacific commands the leading position in the global IoT chips market, primarily due to the high concentration of semiconductor manufacturing facilities in the region. Countries such as China, South Korea, and Taiwan provide a robust industrial base that supports efficient high-volume production and supply chain stability. This dominance is reinforced by significant government-led initiatives focusing on smart city infrastructure and industrial automation, which create sustained demand for connectivity solutions. Furthermore, the rising adoption of consumer electronics and connected devices across the large regional population drives continuous market expansion.

Recent Developments

• In March 2025, STMicroelectronics launched two new generations of microcontrollers (MCUs) within its STM32 family, specifically optimized for the Internet of Things (IoT). The release included the STM32WBA6, a short-range wireless MCU supporting Bluetooth LE, Zigbee, Thread, and Matter protocols for industrial and smart home connectivity. Additionally, the company introduced the STM32U3 series, an ultra-low-power MCU designed to operate for extended periods without maintenance. A company executive highlighted that these new devices utilized advanced near-threshold design techniques to significantly cut dynamic power consumption, thereby enhancing efficiency for battery-reliant applications in sectors such as healthcare, agriculture, and factory automation.
• In December 2024, Silicon Labs announced the release of its SiWx917Y modules, a new line of ultra-low power wireless solutions designed to accelerate the deployment of IoT devices. These pre-certified modules integrated Wi-Fi 6 and Bluetooth Low Energy (LE) 5.4 capabilities alongside an ARM Cortex-M4 processor in a compact package. The Vice President of Wi-Fi Solutions at Silicon Labs stated that the modules were engineered to streamline the complex development and certification process for device manufacturers. By offering robust security, intelligent power management, and support for the Matter protocol, the product aimed to reduce development costs and time-to-market for smart home and industrial IoT applications.
• In November 2024, Qualcomm Technologies introduced two new modules aimed at transforming the Internet of Things (IoT) connectivity landscape: the QCC730M and the QCC74xM. The QCC730M was launched as a micro-power Wi-Fi 4 module optimized for battery-operated devices such as security cameras and smart locks, featuring a dedicated microcontroller and advanced security hardware. Concurrently, the company released the QCC74xM, a programmable connectivity module based on RISC-V architecture that supported Wi-Fi 6, Bluetooth 5.3, Thread, and Zigbee. These solutions were developed to help industrial and consumer partners rapidly deploy intelligent, connected edge devices with improved energy efficiency and interoperability.
• In February 2024, MediaTek unveiled the T300 platform, a significant addition to its 5G RedCap portfolio specifically designed for Internet of Things (IoT) applications. This new 5G RedCap RF-system-on-chip (SoC) featured the company's M60 modem and supported the 3GPP Release-17 standard. The Corporate Senior Vice President at MediaTek noted that the solution combined the speed and latency benefits of 5G with the cost and power efficiency required for IoT devices. The platform was engineered to reduce power consumption by up to 70 percent compared to existing 5G solutions, making it highly suitable for industrial IoT, wearable devices, and logistics applications.

Key Market Players

• Intel Corporation
• Qualcomm Technologies, Inc.
• Texas Instruments Incorporated
• NXP Semiconductors N.V.
• Broadcom Inc.
• STMicroelectronics N.V.
• MediaTek Inc.
• Microchip Technology Inc.
• Renesas Electronics Corporation
• Infineon Technologies AG

By Product	By End-user	By Region
Processor Sensor Connectivity IC Memory Device logic Device	Healthcare Consumer Electronics Industrial Automotive BFSI Retail Building Automation	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global IoT Chips Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• IoT Chips Market, By Product:

• Processor
• Sensor
• Connectivity IC
• Memory Device
• logic Device

• IoT Chips Market, By End-user:

• Healthcare
• Consumer Electronics
• Industrial
• Automotive
• BFSI
• Retail
• Building Automation

• IoT Chips Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE