IoT Chips Market Size, Share, and Trends 2026 to 2035

Revenue, 2025

USD 619.14 Bn

Forecast Year, 2035

USD 2,391.84 Bn

CAGR, 2026 - 2035

14.47%

Report Coverage

Global

What is the IoT Chips Market Size?

The global IoT chips market size is calculated at USD 619.14 billion in 2025 and is predicted to increase from USD 710.62 billion in 2026 to approximately USD 2,391.84 billion by 2035, expanding at a CAGR of 14.47% from 2026 to 2035. The North America IoT chips market size reached USD 173.90 billion in 2023. The IoT chips market is driven by the creation of safe, low-power semiconductors that guard against security lapses.

IoT Chips Market Key Takeaways

• In terms of revenue, the market is valued at USD 619.14 billion in 2025.
• It is projected to reach USD 2,391.84 billion by 2035.
• The market is expected to grow at a CAGR of 14.47% from 2026 to 2035.
• North America dominated in the IoT chips market in 2025 and accounted 37% revenue share.
• Asia Pacific is observed to be the fastest growing in the IoT chips market during the forecast period.
• By hardware, the processor segment has accounted revenue share of 36% in 2025.
• By hardware, the sensor segment is observed to be the fastest growing in the IoT chips market during the forecast period.
• By industrial vertical, the industrial segment dominated the IoT chips market in 2025.
• By industrial vertical, the consumer electronics segment is observed to be the fastest growing in the IoT chips market during the forecast period.

Market Overview

Due to the Internet of Things (IoT), billions of smart devices can communicate with one another through the almost universal Internet Protocol. Almost every system utilizes the Internet and cloud computing ecosystems to innovate and improve the intelligence and awareness of a wide range of devices. The broad availability of low-cost, low-power embedded components and high-quality, reliable wireless communication is propelling the development of various internet-connected devices.

The increased demand for IoT devices is the main factor propelling the growth of the IoT chips market. The growing acceptance of automation in various end-user verticals, such as healthcare, consumer electronics , automotive, BFSI, and retail, is driving up the use of IoT chips in different IoT devices.

IoT Chips Market Trends

• Vodafone and Microsoft have agreed to collaborate for ten years to provide generative AI, digital, enterprise, and cloud services to over 300 million customers and businesses in Vodafone's European and African countries.
• Microsoft will then assist in growing Vodafone's mobile banking platform in Africa and convert it into an equity stakeholder in the managed Internet of Things (IoT) platform when it is spun out as a separate company by April 2024.
• The British business will spend $1.5 billion on customer-focused AI created using Copilot and Azure OpenAI from Microsoft. Azure cloud services, which are more affordable and scalable, will replace actual data centers.
• In August 2023, Sequans, a French IoT chip firm, was purchased by the Japanese electronics behemoth Renesas for $249m. Chips and modules for 5G and 4G cellular IoT are Sequans Communications' areas of expertise. It has signed a memorandum of understanding (MoU) with Renesas to buy Sequans' outstanding common stock, valued at about $249 million, net debt included.

IoT Chips Market Outlook

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Market Scope

IoT Chips Market Growth Factors

• More individuals and places with access to dependable internet are driving up the number of linked devices needing IoT chips.
• IoT processors with sophisticated algorithms and data processing capabilities are in high demand as AI-powered gadgets proliferate. This drives the growth of the IoT chips market.
• 5G's quicker speeds and lower latency make a greater range of IoT device applications possible, which calls for strong and suitable chips.
• IoT chips connect devices, which are necessary for the growth of smart homes, cities, and industries.

Recent Investments in the IoT Chips Market

Market Dynamics

Drivers

Increasing adoption of IoT devices

Consumer electronics (smartphones, wearables), industrial applications (predictive maintenance, automation), healthcare (remote monitoring devices), and smart cities (traffic management, smart grids) are just a few of the industries that use IoT devices. Due to their widespread application, the demand for Internet of Things chips is high. IoT chips are becoming increasingly necessary as consumers and businesses look to use IoT technology for more convenience, efficiency, and innovation.

The cost of IoT chips is lowered by manufacturers' economies of scale, which are attained when the use of IoT devices rises. IoT technology can now be incorporated into more products to lower costs. This drives the growth of the IoT chips market.

Growth in smart cities

Smart cities use IoT sensors and gadgets to optimize traffic flow, lessen congestion, and increase safety. Many IoT chips are needed for the sensors found in cameras, smart car systems, and traffic lights. Smart street lighting systems that modify brightness in response to occupancy and environmental factors require Internet of Things (IoT) chips. These methods decrease both operating expenses and energy usage. Building management systems use Internet of Things (IoT) chips to regulate security, HVAC, lighting, and ventilation. These chips make automated and effective control of building operations possible.

Restraints

Concerns regarding the security and privacy of user data

IoT devices are especially susceptible to hacks because they frequently have limited processing capacity and resources built into them. These flaws can be used by hackers to obtain unauthorized access, change data, or interfere with the operation of devices. Prominent assaults, like the Mirai botnet, have illustrated how large-scale IoT networks can be breached, leading to severe disruptions in operations and data leaks. These kinds of occurrences increase consumer and business knowledge and anxiety, making them reluctant to adopt IoT solutions that use these chips. This limits the growth of the IoT chips market.

Technological limitations that affect the IoT's functionality

The computational power of IoT devices is frequently insufficient for local data processing. This results in a dependence on cloud computing, which adds latency and network connectivity requirements for data processing. The onboard memory of IoT chips restricts the amount of data that may be locally saved and processed. This limits the functioning of IoT devices in applications that need quick responses and impairs their ability to make real-time decisions.

Opportunities

Rise of autonomous and connected vehicles

Advanced driver assistance systems (ADAS) such as automated emergency braking, adaptive cruise control, and lane-keeping assistance are supported by IoT chips. Real-time data processing and communication are essential to these aspects, and IoT technology makes this possible. It is necessary to protect cars from cyberattacks as they grow more networked. Strong encryption and security features on IoT chips are crucial for preventing hacking and data leaks.

Integration of AI capabilities and edge computing in IoT devices

Reducing dependency on cloud infrastructure through local data processing results in lower costs for cloud services and data storage. The ability of edge devices to manage growing workloads independently also makes it possible for more scalable systems. AI integration and edge computing can result in more energy-efficient processes. This is important for battery-operated IoT devices because it allows devices to optimize their power usage based on data and local conditions. With the deployment of sophisticated AI models on edge devices, which demand high processing power, complex activities such as image recognition, natural language processing , and predictive maintenance can be accomplished without the need for cloud support. This opens an opportunity for the growth of the IoT chips market.

Segment Insights

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Regional Insights

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IoT Chips Market - Value Chain Analysis

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IoT Chips Market Companies

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Top Companies in IoT Chips Market and their Contributions

• EdgeQ: The Company has been involved with encouraging the development of high-performance and low-power chips in edge computing. Its EdgeQ AI chip, a flagship product of the company, manages localized data processing at the edge to limit risks of latency and dependency on cloud infrastructures.
• GreenWaves Technologies: GreenWaves Technologies wants to develop low-powered IoT chipsets for edge AI. It is the case of their main product line, the GAP8 IoT processor, which would provide extremely low power consumption, together with sufficient computing resources to perform AI functions at the edge.

Leaders Announcements

• In March 2025, GCT Semiconductor Holding Inc., a leading designer and supplier of advanced 4G and 5G semiconductor solutions, and Globalstar, Inc., the next-generation mobile satellite and communications services provider, partnered to develop IoT modules for two-way satellite, cellular, and band 53 connectivity. This partnership will, for the first time, enable seamless connectivity across cellular, private, and satellite networks worldwide. (Source: https://www.businesswire.com )
• In March 2025, Ceva, Inc., the leading licensor of silicon and software IP that enables Smart Edge devices to connect, sense and infer data more reliably and efficiently, announced that Sharp Semiconductor Innovation Corporation (SSIC), a subsidiary of Sharp Corporation, has developed "ASUKA", a System-on-Chip (SoC) for Beyond 5G (6G) IoT terminals, based on scalable 5G modem platform IP, the Ceva-PentaG2. (Source: https://www.prnewswire.com )
• In March 2025, Qualcomm and IDEMIA partnered to launch the iSIM Solution for IoT devices. With a focus on reducing logistics and manufacturing costs, footprint, and power consumption for battery-powered devices, Qualcomm Technologies has integrated a highly security-focused and EAL5+[1] pre-certified enclave in its new E41 4G Modem-RF. (Source: https://smestreet.in )

Segments Covered in the Report

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