IoT Chips Market Size

Global IoT Chips Market size was valued at USD 455.7 billion in 2023 and is poised to grow from USD 503.55 billion in 2024 to USD 1119.28 billion by 2032, growing at a CAGR of 10.5% during the forecast period (2025-2032). 

The fast pace of connectivity among devices in consumer and industrial applications is a key growth driver for the global IoT chips market. With more smart homes, wearable tech, self-driving cars, and industrial IoT (IIoT) devices becoming mainstream, each device needs specialized chips to handle connectivity, data processing, and power efficiency. Such a growing network of connected devices needs increasingly reliable and scalable hardware solutions, and this is driving the chipmakers to innovate and produce on a large scale. Thus, the increasing quantity of intelligent endpoints provides an enormous demand for IoT chips, hence encouraging investments, R&D, and supply chain growth throughout the international semiconductor sector.

Developments like smaller process geometries (e.g., 5nm, 3nm), stacking of 3D chips, and integration of system-on-chip (SoC) designs allowed companies to design chips that are faster, energy-efficient, and smaller suited for IoT use cases. Semiconductor process technology advancements is the key trend driving the global IoT chips sector. These technological improvements reduce manufacturing costs while increasing chip performance and energy efficiency, which are vital for battery-operated and space-constrained IoT devices. As a result, improved chip capabilities foster greater adoption of IoT across industries by making intelligent devices more practical, affordable, and capable of real-time data processing.

How is the Rise of AI Adoption Accelerating the Growth of the IoT Chip Market?

Artificial Intelligence (AI) is impacting the global IoT chips market directly through a rise in demand for edge processing capabilities. Since AI-based IoT devices call for real-time decision-making with no dependence on cloud connectivity, chipmakers are creating AI-tuned processors incorporating machine learning features at the edge. This trend has prompted innovations like neural processing units (NPUs) to be installed into IoT chips. For example, Qualcomm's AI Engine in its IoT chipsets supports on-device learning for use cases such as predictive maintenance and intelligent surveillance. As AI adoption increases, it brings a cascading demand for more intelligent, higher-performance IoT chips, driving market growth.

In early 2024, Qualcomm announced the RB3 Gen 2 Platform and QCC730 SoC at Embedded World 2024, a major leap in AI-based IoT chip technology. The RB3 Gen 2 Platform provides a tenfold boost in on-device AI processing, enabling applications such as robotics and industrial automation. The QCC730 SoC introduces ultra-low-power Wi-Fi connectivity, using up to 88% less power than previous generations, ideal for battery-powered IoT devices.