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GlobalData Thematic Research

Providing actionable insight into the world's biggest industries

Meet the chip makers set to dominate the industrial internet sector

The industrial internet, a market General Electric (GE) once predicted would account for $15 trillion of global GDP by 2030, is expected to redefine the way much of the global industrial economy operates.

It is part of a fast-evolving ecosystem of intelligent machines running their own logic and communicating with each other.

Development of this market, which GlobalData forecasts will be worth $145bn by 2023, is being driven by software, data analysis and artificial intelligence (AI) specialists who can make sense of the data being provided by the sensors that are at the heart of the industrial internet.

Industries such as manufacturing, energy, pharmaceuticals, utilities, and agriculture are the ones adopting sensor and AI technologies that are driving a sea change in how such businesses are run.

Predictive maintenance will be a key use case, being able to track the wear on component parts, allowing manufacturers to lower their maintenance costs, extend equipment life, reduce downtime, and improve production quality by addressing problems before they cause equipment failures.

Who will be the key tech companies playing a key role in creating the industrial internet, particularly in the semiconductor space?

GlobalData believes IBM, Qualcomm, STMicroelectronics and Texas Instruments are among the semiconductor companies best placed to succeed in the industrial internet arena over the next two to five years.

Overall, rather than industrial giants like GE, leadership of this market is being assumed by software, data analysis and artificial intelligence (AI) specialists, who typically include Amazon, Microsoft and SAP. It is organisations like this who will be the ones making sense of the data the sensors generate.

The industrial internet, GlobalData suggests, is one of top ten themes that will impact the semiconductor sector, alongside data centres, artificial intelligence (AI), high-performance computing, ambient commerce, autonomous vehicles, gaming, 5G, M&A and geopolitics.

GlobalData’s latest “Semiconductor Scorecard” analyses the major technology, macro-economic, and regulatory themes impacting semiconductor companies and reveals that Xilinx, Micron, ASML Holding, Analog Devices, Rohm, Aixtron, Renesas, Infineon, and Silicon Labs also make the select group of leading semiconductor companies in the Industrial Internet theme.

Cyrus Mewawalla, GlobalData’s head of thematic research, explains sensors’ key role: “Microcontrollers and sensors – including accelerometers, heat and humidity components, pressure components, cameras and microphones – will be where much of the value lies in 2019. This calls for industrial grade chips that work to higher reliability standards than chips for consumer applications.

“Companies who invest in the right themes become success stories with those who miss the big themes, ending up either falling behind their competitors or failing altogether.

“In 1999, General Electric (GE) was the largest company in the world by market value. Since 2015, despite being an industrial leader, GE has been falling behind in the industrial internet theme.”

For the industrial internet to work efficiently, streamed data from a multitude of sources must be collected and often analysed in real-time, with the results fed back to the industrial applications that generated the data.

Mewawalla says: “In the industrial internet, the take-up of sensors is being driven by drastic reductions in their cost, which, in turn, helps to drive price competition as more manufacturers enter the market. In 2004, the average cost of sensors was $1.30. By 2020, it is expected to have come down to 38 cents.

“The sensor market is very dynamic and highly competitive. Sensors are also becoming more intelligent. The result will be more user-friendly interfaces that make it easier to interact with sensors and gather data from them.”

The full universe of 57 semiconductor companies covered by GlobalData’s Semiconductor Sector Scorecard are:

  1. Aixtron
  2. Alibaba
  3. Alphabet
  4. Amazon
  5. AMD
  6. AMS
  7. Analog Devices
  8. Apple
  9. ASML Holding
  10. Baidu
  11. Barefoot Networks
  12. Broadcom
  13. Cambricon
  14. Cirrus Logic
  15. Cypress
  16. Dialog
  17. Diodes
  18. Graphcore
  19. Himax
  20. IBM
  21. Infineon
  22. Intel
  23. Marvell
  24. Maxim
  25. MediaTek
  26. Melexis
  27. Mellanox
  28. Microchip
  29. Micron
  30. Microsoft
  31. Monolithic Power Systems
  32. Nanya Tech
  33. Nvidia
  34. NXP
  35. On Semiconductor
  36. Qorvo
  37. Qualcomm
  38. Realtek Semiconductor
  39. Renesas
  40. Rohm
  41. Samsung Electronics
  42. Silicon Labs
  43. Silicon Motion
  44. SK Hynix
  45. Skyworks
  46. SMIC
  47. Softbank
  48. STMicroelectronics
  49. Teradyne
  50. Tesla
  51. Texas Instruments
  52. Tokyo Electron
  53. TSMC
  54. UMC
  55. Vanguard
  56. Xilinx
  57. Zeno 

GlobalData’s full thematic methodology is available here and you can access the full report here. This article initially appeared on Verdict, which is part of the same group as NS Tech and GlobalData.