Chips for smart meters will be a billion dollar market in 2016, says IHS iSuppli.
Smart meter units are expected to grow from 20.5m units to 62m units in the period while ICs used in them are expected to grow from $505M TO $1.1BN.
“The original motivation for replacing conventional meters with smart meters was energy savings,” says IHS’ Jacobo Carrasco Heres, “However, a more compelling incentive is the instrumentation of the grid. With the use of smart meters, utilities finally will have a well-mapped grid that will enable them to plan electrical generation and manage their resources more efficiently.”
The rollout of smart meters is being propelled by government support and regulations.
In the US, stimulus money from the Smart Grid Investment Grant (SGIG) program is driving the replacement of conventional meters with new smart models.
The EU is targeting an 80% conversion to smart meters by 2020, representing shipments of 180m units.
Despite these efforts and the rapid growth of smart meter shipments in the coming years, deployments actually are progressing more slowly than had been expected from a few years ago.
One factor slowing market growth is a lack of money. Amid current economic conditions, investments in smart grids and smart meters are falling short of expectations in many cases.
Another factor is consumer acceptance: The deployment of smart meters alone may not be sufficient to convince consumers that these devices are desirable. Instead, smart meters should be paired with services that deliver more value to consumers, such as a dashboard that shows the electricity consumption of appliances and other devices.
Combining smart meters with smart home features could represent a great opportunity for telecommunications companies. Sales of devices supporting these features will drive additional sales of semiconductors.
The burgeoning smart meter market will drive the rise of a large associated semiconductor business, with metrology ICs and communications ICs—contributing most to the cost of smart meters.
The next biggest contributors are microcontrollers, DSPs and microprocessors.
Smart meters also are making greater use of SOCs.
Both smart meter shipments and the market for smart meter semiconductors will continue to expand in the coming years. Revenue in both areas, however, will flatten starting in 2015.