Can the Rapid Growth of IoT Overwhelm Chipset Production?

Projected counts of IoT devices point to robust expansion, yet the figures vary widely and the “experts” use different horizons. For instance, estimates range from 18 billion by 2022, 26 billion by 2020, 75 billion by 2025, to 125 billion by 2030. Historically, Ericsson and Cisco had projected 50 billion connected devices by 2020, a figure that fueled inflated expectations for IoT’s potential, according to Bob Emmerson.

While the latest forecasts broadly agree on a positive trajectory, they are fluid and depend on how each analyst defines “IoT.” For businesses making investment decisions now, the variance can swing financial plans by tens of billions, creating a real dilemma for chipset makers.

Time is of the essence, says Ville Ylläsjärvi, chief marketing officer and board member of Haltian Oy, a Finnish firm headquartered in Oulu, 150 km south of the Arctic Circle. Haltian develops mesh‑network solutions for diverse industries and is advancing cellular IoT devices.

Ylläsjärvi highlights that IHS Markit’s projection of more than 75 billion smart devices by 2025 represents a 400 % jump over the roughly 15 billion devices in use today. This means manufacturers must scale microchip production sixfold compared to the pace achieved since Texas Instruments first introduced them in 1958.

Current semiconductor supply chains lack the capacity to meet tomorrow’s IoT demand. Without significant investment today, the full promise of the IoT market will remain unrealised by 2025 or any near‑term horizon. Beyond capacity, a critical decision remains: which connectivity technology should the chipset support? Will the market gravitate toward LTE‑M or NB‑IoT?

Altair Semiconductor argues that most Western and large markets will eventually adopt both standards, with the choice dictated by application requirements. Dual‑mode modules supporting both NB‑IoT and LTE‑M are already on the market. For example, Murata has announced plans to integrate Altair’s dual‑mode CAT‑M1/NB1 chipset.

LTE‑M vs. NB‑IoT: Key Differences

LTE (4G) stands apart from earlier generations by combining efficiency and flexibility. Its flat, all‑IP architecture delivers power savings, while advanced modulation allows dynamic bandwidth allocation, enabling operators to offer a spectrum of services—including low‑bit‑rate IoT solutions like NB‑IoT and LTE‑M.

In practice, the cellular industry can be jargon‑heavy, so let’s clarify the main distinctions.

LTE‑M is the standardised solution for Low Power Wide Area Networks (LPWANs) that leverages spread‑spectrum technology and operates on existing cellular infrastructure. It offers a broad set of use cases and is attractive for manufacturers seeking to deploy on current networks.

NB‑IoT shares similar objectives but employs a different modulation scheme (DSSS) and operates across 2G, 3G, and 4G bands. Though initial deployment costs can be higher, NB‑IoT eliminates the need for a gateway, making it a cost‑effective option. Future modules will also support both NB‑IoT and LTE‑M.

Other factors favoring NB‑IoT include its low‑power, cost‑effective design and wide‑area coverage, delivering data rates in the low hundreds of kilobits per second—adequate for most IoT applications that do not require heavy data transfer. Recent offers, such as 1NCE’s flat‑rate 500 MB per device over ten years for just €10, further underscore its appeal.

Regional Preferences

In North America, Verizon and AT&T are expected to adopt LTE‑M, having invested heavily in their LTE networks. While Verizon initially expressed limited interest in non‑LTE technologies, it has announced support for NB‑IoT, and AT&T is accelerating its NB‑IoT rollout, targeting the U.S. in early 2019 and Mexico by year‑end.

Outside the U.S. and in markets with substantial GSM footprints and limited LTE, NB‑IoT is poised to become the dominant technology. China, for example, has embraced NB‑IoT since its announcement, backed by a strong government initiative aiming for over 600 million connections by 2020. Yet early adopters like China Telecom may also deploy Cat‑M.

Key NB‑IoT Chipset Players

Major players in the NB‑IoT chipset arena include Altair Semiconductor, Huawei, Intel, Qualcomm, Samsung, Sierra Wireless, and U‑Blox. According to Nick Hunn, CTO at WiFore Consulting, thirteen companies are now bringing chips to market, requiring an upfront investment of roughly $200 million (€171.72 million). Factoring in standardisation, infrastructure, and initial trials pushes total costs to between $500 million (€429.30 million) and $1 billion (€860 million).

This capital has enabled NB‑IoT to reach its current maturity. Such substantial investment should concern competing LPWAN standards like LoRa and Sigfox, as NB‑IoT firms will strive to recoup their spend. However, real‑world NB‑IoT deployments remain in the early stages.

The author of this article is Bob Emmerson, freelance writer and telecoms industry observer.