IoT Chips Market Size, Share, Growth, Trends, and Global Industry Analysis: By Chip Type (Connectivity IC, Sensors, Processors, Memory, Logic) By End User (Consumer, Healthcare, Industrial, Automotive, Smart Cities) and Region Forecast 2020-2031

IoT Chips Market size was valued at US$ 473.5 billion in 2024 and is projected to reach US$ 679.7 billion by 2031 at a CAGR of 5.3% from 2025-2031. IoT chips are semiconductor products—such as processors, connectivity ICs, sensors, memory, and logic devices—optimized to provide data capture, processing, communications, and control in connected systems for consumer, industrial, healthcare, and smart city applications.

The market for IoT chips is expanding significantly on account of the rising need for smart, connected systems across industries such as healthcare, manufacturing, consumer electronics, transportation, and agriculture. As billions of devices today need to process efficiently and in real time, and communicate wirelessly without hiccups, the need for smaller, more energy-efficient chips with edge intelligence and multitasking capabilities is growing. Chipsets that are integrated, particularly SoCs and MCUs, are increasingly finding use due to their capacity to connect, process, and sense within a single platform. A number of challenges, however, may dampen this trend. Security threats are becoming increasingly common, as IoT devices are highly susceptible to cyber attacks because of their limited computational power and inadequate encryption standards.

In addition to this, massive development and fabrication expenses, particularly for sophisticated nodes such as 2nm and 3nm chips, can serve as huge hurdles for smaller-scale manufacturers. The absence of homogenized protocols and diversified ecosystems within industries also makes interoperability and integration difficult, causing a bottleneck in scalability and mass adoption.

Facts & Figures

• Device Volume: Over 14 billion IoT devices were connected globally in 2023, with projections suggesting more than 25 billion devices by 2030—each requiring multiple chips, sensors, or microcontrollers.
• Chip Density: A single smart home device (e.g., a smart speaker) can integrate 5–10 different IoT chips, including processors, memory, communication modules, and power management units.
• AI Edge Trend: Around 35% of IoT chips in development now include AI or machine learning capabilities, especially for edge computing applications.
• Energy Efficiency Push: Recent IoT chipsets use up to 80% less power than predecessors due to innovations like ultra-low-power modes and AI-based energy management.

Key Developments

• In May 2025, during Computex 2025, MediaTek confirmed it will tape out its first 2?nm AI-enabled chip in September 2025, achieving around 15% performance gain and 25% power savings compared to prior nodes. The chip supports the upcoming wave of edge?AI, smart mobility, and IoT use cases.
• In March 2025, at MWC 2025, MediaTek unveiled the M90 5G?Advanced and IoT modem supporting carrier aggregation, satellite (NTN) connectivity, and Rel.?17 RedCap standards. The M90 delivers up to 12?Gbps throughput and includes the company’s second-gen Modem AI engine for adaptive connectivity, lowering energy use and increasing network efficiency.
• In January 2025, MediaTek partnered with Intelligo to launch AI voice solutions for automotive, smart home, and retail sectors, integrated into its Dimensity Auto smart cockpit platform. The collaboration brings edge-native voice recognition and human?machine interaction capabilities to future in-car and home systems showcased at CES?2025.
• In December 2024, STMicro launched its STM32N6 series microcontrollers built for edge AI and machine learning applications in both consumer and industrial markets. These MCUs enable audio and image processing directly on the device—without relying on remote computing—reducing latency and energy consumption while enabling smart, offline functionality.

IoT Chips Market Segmentation

Based on the chip type

• Connectivity IC (Wi?Fi, Bluetooth, NB?IoT, RedCap)
• Sensors (temperature, motion, environment)
• Processors/MCU/SoC
• Memory Devices
• Logic & Security ICs

Connectivity IC chips—including modules for Wi?Fi, Bluetooth, NB?IoT, and emerging 5G RedCap standards—provide essential network access for thousands of IoT nodes. Wi?Fi remains prevalent (~38–39% revenue share), while 5G RedCap connectivity is growing fastest (projected?~19% CAGR), offering low-power, low-cost cellular IoT for wearables and sensors. The shift to multi-protocol chips allows devices to adapt to diverse environments—home, industrial, and metropolitan. As smart cities and consumer electronics expand, these ICs are being integrated directly into SoC solutions to minimize BOM cost and simplify design.

Based on the end user

• Consumer Electronics & Wearables
• Healthcare & Medical Devices
• Industrial & Manufacturing (IIoT)
• Automotive & Transportation
• Smart Cities & Utilities

Healthcare applications—including remote patient monitoring, wearable health trackers, and connected medical devices—are rapidly increasing demand for IoT chips. Such devices require ultra-low power consumption, secure data encryption, and compatibility with health data standards. Combined with edge ML capabilities, IoT chips can detect anomalies, trigger alerts, and conduct predictive diagnostics locally. Hospitals and home-care use cases drive chip innovation toward highly reliable, miniature form factors and robust cybersecurity features, especially for sensitive data handling.