The Internet of Things:               A Sustainable Driver for   Integrated Circuit Growth


We are living through the Fourth Industrial Revolution, an era that Klaus Schwab, founder of the World Economic Forum, describes as “characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological.” This era is being driven by a confluence of emerging disruptive technologies including artificial intelligence, robotics, autonomous vehicles, and the Internet of Things (IoT). In practical terms, the Fourth Industrial Revolution is more than just a bunch of converging technology trends: it heralds a new way of life.

For the semiconductor industry, the implications of the Fourth Industrial Revolution are characterized by a proliferation of chips of all types, driven in large measure by the demand for IoT devices and related applications. In 2017, global semiconductor industry sales topped $412 billion, an increase of 21.6 percent over 2016 sales, according to Semiconductor Industry Association (SIA) research 1. Entegris believes this market expansion marks the end of cyclical semiconductor sales dominated by the growth of specific devices (e.g., PCs, smartphones, etc.). It’s an unprecedented opportunity for all parties in the semiconductor ecosystem, but one that comes with significant challenges the entire industry must address.


From smart speakers to smart homes, smart cities, smart transportation, smart pharmaceuticals, and smart grids, it is not hard to imagine a world where there are chips in
just about everything. The industry is already riding this wave and most industry experts see
the same trajectory for the foreseeable future.

In particular, automotive applications are a rapidly growing segment of the market. In its
most recent forecast, Gartner noted: “By 2022, automobiles will require nearly 50% more semiconductors as cars become more automated, cleaner, and more connected.”2 This is driven in large measure by growing demand for assisted and autonomous driving features, safety and environmental mandates, connectivity, and in-vehicle “infotainment.” This will include sensors (cameras, radar, LIDAR), communication modules, high-speed connectivity,
and powerful data processing capabilities, among others.

While emerging, state-of-the-art devices get a lot of attention, traditional ICs continue to be
the workhorse of the digital economy. This is great news for the semiconductor industry as
the capital expenditure (CapEx) requirements for increasing existing capacity are significantly less than those needed to build new capacity from the ground up. Regardless, it is abundantly clear that the world of “smart everything” is going to require both CapEx investment and cost reductions across the board.