(iTers News) -Integrated circuit sales for connections to IoT, or the Internet of Things are forecast to grow more than three times faster than total IC revenues during the last half of this decade, according to market research firm IC Insights.

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ICs used to embed IoT functionality into a wide range of systems, sensors, and objects are expected to generate sales of US$12.8 billion in 2016, according to IC Insights.

Between 2015 and 2020, IoT integrated circuit sales are projected to rise by a compound annual growth rate (CAGR) of 13.3% compared to 4.3% for the entire IC market, which is projected to reach US$354.7 billion in four years versus US$287.1 billion last year.

A breakdown of the shipments by applications (Figure 1) show that the second-strong five-year IC sales growth rates are so expected in automotive with a CAGR of 10.3%. Meanwhile, shipments to medical electronics market are forecast to grow at a CAGR of 7.3%, while IC sales to digital TV market are expected to rise at a CAGR of 5.9%.  IC chip shipments to server computer market are projected to grow at a CAGR of 5.4%.

Cellphone IC sales—the biggest end-use market application for integrated circuits—are expected to grow by a CAGR of 4.8% in the 2015-2020 period, mainly dragged down by saturation in smartphone markets and economic weakness in some developing regions. That forecast proves a huge setback, compared with a CAGR of 10.8% scored between 2010 and 2015. Meanwhile, weak and negative IC sales growth rates are expected to continue in standard personal computers, set-top boxes, touchscreen tablets, and video game consoles.

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In 2016 alone, IC sales for IoT applications will climb nearly 19% from a year ago to an estimated US$12.8 billion, followed by the automotive segment increasing about 12% to US$22.9 billion, medical electronics rising 9% to US$4.9 billion, and digital TV systems growing 4% to US$12.9 billion.

IC sales growth in server computers will hit 3% in 2016 to US$15.1 billion, while sales to cellphone market is expected to rise 2% to US$74.2 billion, and set-top boxes being 2% to US$5.7 billion.

Meanwhile, standard PC integrated circuit sales are estimated to be down 5% in 2016 to US$54.6 billion while video game console IC revenues are expected to finish this year with a 4% drop to $8.9 billion and tablet IC sales are on track to decline 10% to US$12.1 billion in 2016, according to IC Insights

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