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Cellular IoT Module Market Hit Hard by Covid Leading to Chip Shortage

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Hit hard by the pandemic, the global market for cellular Internet of Things (IoT) modules declined 8 percent (on year) to $3.1 billion in 2020. A global chip shortage is now affecting 2021 shipment volumes and profit margins, a new report has said.

According to data provided by IoT Analytics, a leading provider of market insights and competitive intelligence for IoT and Industry 4.0, the global semiconductor shortage had already affected some cellular module companies in Q4 2020.

“Most cellular module companies have a large backlog of orders in hand, and chip shortages have led to higher chip price volatility. Hence, in H1 2021, we expect a global decline in shipment volume for the overall cellular IoT module market and a decrease in profit margins for module makers,” said the report that was released late on Thursday.

The findings showed that the chip shortage is hampering the Covid-19 cellular IoT recovery in Europe and North America, and markets there are not expected to grow as much as they could.

“The promise of pre-configured IoT modules has become increasingly attractive in recent years, as customers are looking to decrease time-to-market for IoT solutions and multi-connectivity setups have made it more complicated for companies to develop their own solutions,” said Knud Lasse Lueth, CEO at IoT Analytics.

China is the only big country that showed growth in 2020.

Cellular IoT module shipment in China grew 14 percent (YoY) in 2020, while cellular IoT module shipment in the rest of the world declined.

The findings showed that findings showed that the IoT initiatives in China were much less affected and continued as planned after a short Covid-19 lockdown.

Every connected device that makes use of a cellular connection (2G, 3G, 4G, or 5G) uses either a cellular IoT module or a cellular chipset embedded directly into the printed circuit board of a device or a piece of equipment.

The report noted that with 4.5 billion cellular IoT connections expected by 2025, the market for cellular IoT modules is in a long-term cyclical uptrend.

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