Cellular IoT modules and chipsets are also falling victim to the global supply shortage, which spells bad news for IoT projects.
Shipments of cellular IoT chipsets and modules are expected to drop 6% for the current third quarter compared to the second quarter of 2021, according to Counterpoint Research.
That drop will have the effect of bringing IoT project implementations to a halt, the firm said.
The IoT module and chipset market saw “minimal” impact of the semi shortage in the second quarter, but the impact will be “prominent” in third quarter, said Counterpoint analyst Soumen Mandal via email.
The impact of a 6% reduction will be severe. “Global IoT adoption is increasing; hence, a sudden decrease in supply will halt IoT project implementation around the world,” Mandal said.
Mandal’s analysis follows a strong second quarter report, with shipments of 100 million cellular IoT modules for the first time. There was an 800% surge in 5G IoT modules year-over-year, Counterpoint said, leading to a 53% increase in shipments and a 60% increase in revenues for the second quarter.
For modules, Quectel, Fibocom and Telit were the top three plays, together capturing 40% of total revenue during second quarter.
For chips related to those modules on a global basis, Qualcomm was the leader in the second quarter capturing 48% of the market, followed by HiSilicon with 14% and then UNISOC with 12%, Counterpoint said. In North America, the leaders were Qualcomm, Intel and Altair. There were also 100 million cellular IoT chipsets shipped in the second quarter, with those chipsets used in the 100 million cellular IoT modules.
For the first quarter, cellular IoT module shipments were also positive, up by 50% year over year, with Quectel and Qualcomm in the top spots for modules and chips.
Semiconductor shortages already were impacting prices of modules in the second quarter, along with rising 5G shipments, Counterpoint said. The average selling price for 5G modules increased to just under $150 for the first time in the second quarter.
Counterpoint tracks more than 80 IoT module vendor shipments, and revenue performance across more than a dozen chipset makers.
Qualcomm has 13,000 customers that have seen progress with IoT modules and chipsets and had hailed the record numbers in second quarter. Qualcomm’s connected smart systems business is using 5G in IoT to enable multiple projects such as smart meters, point-of-sale systems and industry warehousing.
Editor’s Note: The global chip shortage will be the subject of a panel discussion at Sensors Converge on Thursday September 23 at 11:15 a.m. PDT. Registration is free online.