Smart Meter Semiconductor Market on the Up
August 19, 2015 | IHSEstimated reading time: 1 minute
The global market for semiconductors used in smart meters that provide two-way communications between meters and utilities will continue to expand in the coming years, providing significant growth opportunities semiconductor manufacturers. Shipments of communicating meters are forecast to reach 132 million units in 2015 and 150 million units in 2019, according to IHS Inc.
Global revenues for semiconductors used in water, gas and electric meters reached $1.2 billion in 2014, with a year-over-year growth of 11 percent and a five-year compound annual growth rate of 8 percent. The average semiconductor cost in two-way meters was approximately $11 in 2014. Average selling prices (ASPs) are expected to increase over time, as industry needs increase for 32-bit micro-controller units (MCUs), memory chips, single system-on-chip (SoC) solutions and other components used in secured communications and other applications.
Based on the latest information from the IHS Industrial Semiconductor Market Tracker, the demand for precise energy measurement and communication has increased the penetration of micro-component integrated circuits (ICs), along with analog ICs. In fact, two thirds of meter semiconductor revenue comes from microcontroller and analog components.
"The semiconductor industry for electric meters is moving toward a single-chip solution for measuring and communicating with the grid station, which is an important industry trend to watch," said Robbie Galoso, associate director, semiconductor market shares and industrial electronics for IHS Technology. "Water and gas meters require fewer semiconductor components; however, they need extra semiconductors for sensing and battery management."
Meters installed in the latter half of this decade will require greater application complexity, better security, improved communication ability, enhanced remote control ability and higher resolution. That means increased need for memory and system-on-chip (SoC) solutions with greater capabilities in a smaller package than in the past.
Meters are evolving from those that merely register end-user usage, into complicated machines that can be queried for on-demand data, upgraded remotely, shut off in case of emergency or non-payment and used for variable pricing. "The movement from 8-bit MCUs to higher margin 32-bit MCUs is a key industry trend," said Noman Akhtar, analyst for IHS Technology. "The integration of these higher function microcontroller units also requires additional capabilities, such as increased memory, which further increases manufacturing costs."
Suggested Items
Big Win for Defense Production Act Budget Allocation in FY24 Budget
04/23/2024 | I-Connect007 Editorial TeamOne year ago, President Biden issued a determination that chips and packaging are critical for national security. Since that time, much work has been done to continue the conversation in Washington, elevating the importance of the entire chips value chain, and including printed circuit boards and substrates, without which chips cannot operate.
Zentech’s Board of Directors Announces the Return of Matt Turpin as President and CEO
04/22/2024 | Zentech ManufacturingTurpin draws upon over 35 years of experience in the electronics industry and has an 18-year history with Zentech. He previously served as President and CEO from 2006 to 2019 after which time he has remained active in the EMS industry as an advisor to Zentech and other industry organizations.
Aaron Woolf, Dylan Peterson Join SIA Team
04/22/2024 | SIAThe Semiconductor Industry Association (SIA) announced Aaron Woolf and Dylan Peterson have joined the SIA team. Woolf will serve as director of global policy for economic security and Peterson will be a communications associate. SIA represents 99% of the U.S. semiconductor industry by revenue and nearly two-thirds of non-U.S. chip firms.
It’s Only Common Sense: OCCAM—the Time Is Now
04/22/2024 | Dan Beaulieu -- Column: It's Only Common SenseOne of my favorite books is a little tome called Who Moved My Cheese? Even those of you who don’t spend a lot of time reading books have at least heard of it and know that it refers to people, especially in business, who are so stuck in their ways that they get upset when something changes. In our business, we know this kind of thinking is especially true. In fact, it always makes me laugh when one of my innovative friends finds a new way to do something and is afraid that someone will steal his idea. I always tell him that no one in our business, especially a PCB engineer, has ever thought about someone else’s innovative idea enough to steal it.
Digitalisation and ESG
04/19/2024 | Marina Hornasek-Metzl, AT&SDigitalisation and ESG are prominent and high-priority topics in the global business community. The first focuses on applying technology throughout the value chain to produce faster, smarter, and more desirable business outcomes. The latter emphasises the broader value a business is expected to create for its stakeholders from an environmental, social, and governance perspective.