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Demand from Automotive IoT, 5G, AI to Surge in 2020

Global semiconductor market to gradually recover on rising new tech needs

0.pngPlagued by a sharp drop in memory ICs’ prices and the negative impact of US-China trade dispute, global semiconductor sales are forecast to drop 9.6% in 2019, far worse than the 3.4% predicted in the first quarter of this year, according to international research house Gartner.
But strong demand from enterprise and automotive Internet of Things (IoT) applications, 5G and artificial intelligence (AI) is expected to push back against headwinds in the global semiconductor market in 2020.
Gartner has forecast that the enterprise and automotive Internet of Things (IoT) market will grow to 5.8 billion endpoints in 2020, a 21% increase from 2019. By the end of 2019, 4.8 billion endpoints are expected to be in use, up 21.5% from 2018.
Utilities will be the highest user of IoT endpoints, totaling 1.17 billion endpoints in 2019, and increasing 17% in 2020 to reach 1.37 billion endpoints. “Electricity smart metering, both residential and commercial will boost the adoption of IoT among utilities,” said Peter Middleton, senior research director at Gartner. “Physical security — where building intruder detection and indoor surveillance use cases will drive volume — will be the second largest user of IoT endpoints in 2020.”
Building automation, driven by connected lighting devices, will be the segment with the largest growth rate in 2020 (42%), followed by automotive and healthcare, which are forecast to grow 31% and 29% in 2020, respectively. In healthcare, chronic condition monitoring will drive the most IoT endpoints, while in automotive, cars with embedded IoT connectivity will be supplemented by a range of add-on devices to accomplish specific tasks, such as fleet management, according to Gartner.
Global revenue from endpoint electronics is forecast to reach US$389 billion next year and will be concentrated over three regions: North America, Greater China and Western Europe. These three regions will represent 75% of the overall endpoint electronics revenue. North America will record US$120 billion, Great China will achieve US$91 billion and Western Europe will come in third totaling US$82 billion in 2020.
5G network infrastructure
In 2020, worldwide 5G wireless network infrastructure revenue is forecast to hit US$4.2 billion, an 89% increase from 2019 revenue of US$2.2 billion, Gartner said. Investments in 5G NR network infrastructure will account for 6% of the total wireless infrastructure revenue of communications service providers (CSPs) in 2019, and that this figure will grow to 12% in 2020.
“5G wireless network infrastructure revenue will nearly double between 2019 and 2020,” said Sylvain Fabre, senior research director at Gartner. “For 5G deployments in 2019, CSPs are using non-stand-alone technology. This enables them to introduce 5G services that run more quickly, as 5G New Radio (NR) equipment can be rolled out alongside existing 4G core network infrastructure.”
In 2020, CSPs is predicted to roll out stand-alone 5G technology, which will require 5G NR equipment and a 5G core network and this will lower costs for CSPs and improve performance for users.
Currently, 5G services have already begun in the U.S., South Korea and some European countries, including Switzerland, Finland and the United Kingdom. CSPs in Canada, France, Germany, Hong Kong, Spain, Sweden, Qatar and the United Arab Emirates have announced plans to accelerate 5G network building through 2020.
As a result, Gartner has estimated that 7% of CSPs worldwide have already deployed 5G infrastructure in their networks.
AI augmentation
Meanwhile, AI augmentation is forecast to create a business value of US$2.9 trillion and 6.2 billion hours of worker productivity globally in 2021, according to the research house.
“Augmented intelligence is all about people taking advantage of Artificial Intelligence,” Svetlana Sicular, Research Vice-President at Gartner, said. “As AI technology evolves, the combined human and AI capabilities that augmented intelligence allows will deliver the greatest benefits to enterprises.”
Gartner defines augmented intelligence as a human-centered partnership model of people and AI working together to enhance cognitive performance. This includes learning, decision making and new experiences.
On consumer applications, Jane Yeh, a senior industry analyst at Taipei-based semi-official research institute Market Intelligences & Consulting Institute (MIC), noted that AI revenue for consumer applications is forecast to increase from US$1.8 billion in 2019 to US$4.15 billion in 2022, of which the application of natural language processing technology for AI is of great importance with over 60% contribution to AI revenue in the consumer sector.
“This implies that AI has been successfully implemented into consumer applications, including home appliances, smart home devices, and communication devices,” she said.
She advised businesses which have hardware manufacturing capabilities to cut into key component supply chains of AI consumer devices to facilitate the adoption of key components in the high-end product segment.

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