Smart meter semiconductor market: trends and forecasts

Smart meter semiconductor market research
A major trend in the smart meter semiconductor market is the move from  8-bit MCUs to higher margin 32-bit MCUs

As advanced meters demand greater application complexity, better security and improved communication, global demand in the smart meter semiconductor market will see a five-year compound annual growth rate of 8%, according to new research.

Global revenues for semiconductors used in water, gas and electric meters reached US$1.2 billion in 2014, with a year-over-year growth of 11% and a five-year compound annual growth rate of 8%, states research analyst company IHS.

The firm notes that with global shipments of communicating meters forecast to reach 132 million units in 2015 and 150 million units in 2019, the need for smart meter semiconductor technology will also grow.

The new report finds that the average semiconductor cost in two-way meters was approximately US$11 in 2014.

Average selling prices are expected to increase over time, as industry needs increase for 32-bit micro-controller units, memory chips, single system-on-chip solutions and other components used in secured communications and other applications.

Smart meter semiconductor trends

Robbie Galoso, associate director, semiconductor market shares and industrial electronics for IHS Technology, said: “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.

“Water and gas meters require fewer semiconductor components; however, they need extra semiconductors for sensing and battery management.”

Meters increasingly demand complex functionality that can be queried for on-demand data, upgraded remotely, shut off in case of emergency or non-payment and used for variable pricing, according to .

Noman Akhtar, analyst for IHS Technology, said the movement from 8-bit microcontrollers to higher margin 32-bit microcontrollers is a key industry trend.

Mr Akhtar said: “The integration of these higher function microcontroller units also requires additional capabilities, such as increased memory, which further increases manufacturing costs.”

The microcontroller segment is a significant part of the market with two thirds of meter semiconductor revenue comes from microcontroller and analog components, the reports maintains.