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The wafer foundry market experienced a wavy development, jumping by 39.4 percent in 2010 following a 7.9 percent decline in 2009. And the growth rate first shrank to 8.7 percent in 2011, then expanded to 21.7 percent in 2012, and fell back to 6.8 percent in 2013. It is projected that the growth rate will stand at 15.6 percent in 2014 and 6.0 percent in 2015. The fluctuation in the wafer foundry market will begin to present an increasingly small growth rate, which is mainly because of the differentiation in wafer foundry industry.

Released this month, the Global and China Wafer Foundry Industry Report, 2013-2014 provides data and information on: Overview of Global Semiconductor Industry, Downstream Market of Wafer Foundry Industry, Wafer Foundry Industry, Semiconductor Industry in China as well as 13 Key Wafer Foundry Vendors.

According to the nature of the vendors, the foundry businesses can be divided into two segments, namely, IDMs offering their excess capacity to third parties and pure-play (or dedicated) foundries, with the former including Samsung, Intel, and IBM. Global Foundries can be barely included in IDMs, for it originated from AMD. These vendors have long product lines, which makes it possible to cause competition with their customers. And IDMs, in reality, are not involved in foundry businesses and could conduct foundry business only when they have excess capacity. These IDMs will not become the first choice of the customers unless special reasons.

Money and technology do not always help do well in wafer foundry industry, which has been best illustrated by IBM. Recently, IBM was willing to pay USD1 billion for the sale of its wafer foundry business to GlobalFoundries. And GlobalFoundries suggested that the payment was very small and should be expanded to USD2 billion due to the fact that the business, which generates revenue of less than USD500 million annually, caused IBM to suffer approximately USD1.5 billion loss a year. Except TSMC, most foundries have more or less bought IBM’s technology, especially Samsung, STMicroelectronics, and GlobalFoundries, which are all technologically brought up by IBM.

Over the years, the four giants-Samsung, STMicroelectronics, Global Foundries, and IBM have formed an alliance in a vain attempt to compete against TSMC. Instead, TSMC has grown stronger and stronger. After years of efforts, Samsung has won a client in wafer foundry business-Apple. Unfortunately, the order of Apple’s main products A8 was gained by TSMC in 2014, thus leading to the first loss of Samsung System LSI Division over the years.

Although Samsung’s 14nm technology seems to take the lead, this is not approved by Apple. This is mainly because the four companies-Samsung, STMicroelectronics, GlobalFoundries, and IBM all developed from IDM. And Samsung has a long product line and therefore could compete with any electronic company in the world. Previously, Apple did not choose TSMC because the company suffered capacity constraints, and as TSMC’s capacity was expanded and met Apple’s requirements, Apple lost no time in making a shift from Samsung to TSMC.

Unlike IDMs such as Samsung, TSMC is pure-play foundry and will not compete with clients, which makes it easier for the company to get orders. And Samsung, STMicroelectronics, GlobalFoundries, IBM and Intel are the second choices for the clients.

The investment of Chinese enterprises in the field of semiconductors is totally dependent on the government, resulting in a lower efficiency. In 2010, Shanghai Huali Microelectronics Corporation was established with an investment of RMB14.5 billion. Although it had been into operation for 3 years, the company’s revenue was less than RMB1.2 billion in 2013. SMIC’s major clients include Spreadtrum, RDA, Hisilicon, GalaxyCore Inc., Rockchip, Allwinner Technology, GigaDevice, HED, Fudan Microelectronics, TMC, and DMT. The last few enterprises, which are mainly relied on the government orders, are the major design houses of chips for a variety of smart cards, including social security cards, ID cards, SIM cards, Union Pay cards. Therefore, 40 percent of SMIC’s revenue came from the low-end 0.15/0.18μm technology while TSMC’s revenue from lower than 65 nm technology accounted for 71 percent of the total.

According to the report, the specifically Foundry has a small market size and stable sales volume, but with low costs and high returns. In contrast, Logic IC Foundry has a large market size, but with a considerable fluctuation. Most important, only the leading player in the Logic IC Foundry industry can make profit, otherwise it is easy to make a loss. Take TSMC for example, which has taken the lead in the global market since its establishment in 1987, with its market share never less than 50%. Besides, TSMC is also the wafer foundry vendor that earns the highest profit around the globe, with the gross margin never lower than 40 percent even close to 50 percent in 2014 (exceeding Apple and Qualcomm). The No.2, No.3 and No. 4 players have ever suffered losses for many years, with SMIC, for example, making profit only in 2010 during the 12 years from 2000 to 2011. And the third player, Global Foundries, has suffered losses for years, with the revenue in 2013 showing a slight growth but the operating loss expanding from AED2.217 billion to AED3.217 billion.

Foundry vendors / companies mentioned in Global and China Wafer Foundry Industry Report, 2013-2014 include TSMC, UMC, SMIC, VIS, POWERCHIP, HHGRACE, DONGBU HITEK, TOWER, X-FAB, ASMC, SAMSUNG, MAGNACHIP and GLOBALFOUNDRIES.

SEMI recently completed its annual silicon shipment forecast for the semiconductor industry. This forecast provides an outlook for the demand in silicon units for the period 2014-–2016. The results show polished and epitaxial silicon shipments totaling 9,410 million square inches in 2014; 9,840 million square inches in 2015; and 10,163 million square inches in 2016 (refer to table below). Total wafer shipments this year are expected to finally exceed the market high set in 2010 and are forecast to continue shipping at record levels in 2015 and 2016.

“Silicon shipment levels are robust this year,” said Denny McGuirk, president and CEO of SEMI.  “We expect silicon shipment volume to set a record high this year, followed by two consecutive years of growth.”

2014 Silicon Shipment Forecast

Total Electronic Grade Silicon Slices* – Does not Include Non-Polished

(Millions of Square Inches)

 

Actual

Forecast
 

2012

2013

2014F

2015F

2016F
MSI

8,814

8,834

9,410

9,840

10,163
Annual Growth

0%

0%

7%

5%

3%

*Shipments are for semiconductor applications only and do not include solar applications

Silicon wafers are the fundamental building material for semiconductors, which in turn, are vital components of virtually all electronics goods, including computers, telecommunications products, and consumer electronics. The highly-engineered thin round disks are produced in various diameters (from one inch to 12 inches) and serve as the substrate material on which most semiconductor devices or “chips” are fabricated.

All data cited in this release is inclusive of polished silicon wafers, including virgin test wafers and epitaxial silicon wafers shipped by the wafer manufacturers to the end-users. Data do not include non-polished or reclaimed wafers.

The Silicon Manufacturers Group acts as an independent special interest group within the SEMI structure and is open to SEMI members involved in manufacturing polycrystalline silicon, monocrystalline silicon or silicon wafers (e.g., as cut, polished, epi, etc.). The purpose of the group is to facilitate collective efforts on issues related to the silicon industry including the development of market information and statistics about the silicon industry and the semiconductor market.

NANIUM today announced it has successfully launched the industry’s largest Wafer-Level Chip Scale Package (WLCSP) in volume. The final units measure 25mm x 23mm and are produced on 300mm wafers, a packaging solution with proven manufacturability that was entirely developed in-house.

“Our customer, Custom Silicon Solutions, is a provider of complex mixed-signal ASIC solutions. We were requested to deliver a customized Fan-In Wafer-Level Packaging/ WLCSP solution beyond common practice, as it was nine times larger in area. Standard WLCSPs usually range up to 8mm x 8mm, in some extreme cases up to 10mm x 10mm,, said Steffen Kroehnert, Director of Technology at NANIUM.

Mike McDaid, Director of Sales at CSS, commented: “After completing a very successful high volume run of a 65nm product in eWLB at NANIUM, we approached them with our next 28nm WLCSP requirements. The first article worked as promised and enabled CSS to get to market quickly with an ASIC which is unprecedented by several times in thermal and computational performance. No other package solution in existence would have achieved the low lead resistance and high reliability we demanded. This ASIC in NANIUM’s WLCSP establishes a new world class of integration, beyond VLSI-SOC (Very Large Scale Integration System-on-Chip). The final product is just about the maximum reticle size allowed and consumes hundreds of Watts.”

The wafers with the high-performance digital chips are produced with 28nm CMOS technology and contain over 5.5 billion transistors, one of the largest transistor-count chip produced by Global Foundries. Once produced in Dresden, Germany, wafers are sent to NANIUM for packaging. Such large dies are usually packaged in Wirebond-BGA or FlipChip-BGA with a small bump pitch, applying underfill material between bumped die and FlipChip substrate to ensure the required board-level reliability. The WLCSP solution developed by NANIUM relies on a high count of 1,188 solder balls at a wide BGA pitch of 0.7mm. It has successfully passed more than 400 temperature cycles on board, as stipulated by the IPC-9701 (TC2) standard, the most critical reliability test for such device.

“It was something new that had never been accomplished in WLCSP before, and we were extremely fortunate that NANIUM decided to take on the challenge,” said Mike McDaid. “Additionally, we were very pleased with the collaborative working process with NANIUM’s engineers. Even when quite formidable design issues were encountered, they proved to be competent, detail-oriented, communicated well and respected the time constraints. We also did a thorough quality audit on-site and were very impressed with the entire manufacturing flow.”

Steffen Kroehnert also commented that “we have been very excited about taking this challenge. At NANIUM, we do our best to understand the needs of our customers and tailor solutions accordingly. CSS has been very satisfied with the performance and the reliability of the product and has approved it for release to volume manufacturing.”

WLCSP is a technology in the semiconductor packaging industry that offers the smallest package form-factor possible. It enables low-cost manufacturing, and a high performance suitable for low I/O density. WLCSP’s product applications include Mobile and consumer products, Wireless connectivity, MEMS and Sensors.

Front End fab equipment spending is projected to increase up to another 20 percent in 2015 to US$ 42 billion, according to most recent edition of the SEMI World Fab Forecast.  In 2015, equipment spending could mark a historical record high, surpassing the previous peak years of 2007 ($39 billion) and 2011 ($40 billion). In 2014, the report predicts growth of approximately 21 percent for Front End fab equipment spending, for total spending of $34.9 billion.

Seven companies are expected to spend $2 billion or more in 2014, representing almost 80 percent of all fab equipment spending for Front End facilities; a similar pattern is expected in 2015. About 90 percent of all equipment spending is for 300mm fabs.

According to the World Fab Forecast, in 2014, the five regions with the highest forecast spending on equipment are: Taiwan ($9.7 billion), Americas ($7.8 billion), Korea ($6.8 billion), China ($4.6 billion), and Japan ($1.9 billion). In 2015, the same regions will lead: Taiwan ($12.0 billion), Korea ($8.0 billion), Americas ($7.9 billion), China ($5.0 billion), and Japan ($4.2 billion). Spending in Europe is expected to nearly double (from 2014 to 2015) to $3.8 billion.

As Figure 1 illustrates, before the last economic downturn, most equipment spending was for new additional capacity. SEMI reports that in 2010 and 2011, fab equipment spending growth rates increased dramatically, but installed capacity grew by only 7 percent in both years. In 2012 and 2013, installed capacity grew 2 percent or less. Some industry segments, such as foundries, see continuous capacity expansion, while other segments show much lower growth — pulling down the total global growth rate for installed capacity to below the 3 percent mark.

World_fab_chart

Figure 1 illustrates fab equipment spending since 2003 and the change of installed capacity (excluding Discretes and LEDs).

 

In addition to foundries, the World Fab Forecast report captures capacities across all industry segments as well as System LSI, Analog, Power, MEMS, LED, Memory and Logic/MPUs.

DRAM is now slowly coming out of a declining trend with -3 percent in 2014 and reaching close to zero by end of 2015. Over the past three to four years, some major players have switched fabs from DRAM to System LSI or Flash while others have discontinued DRAM production completely, contributing to declining DRAM capacity.

The SEMI World Fab Forecast also provides detailed data about fab construction projects, with spending expected to total $6.7 billion in 2014 and over $5.0 billion in 2015. In 2014, the leading regions for construction spending are Taiwan, Americas, and Korea.  In 2015, the highest spending is expected in Europe/Mideast, followed by Taiwan and Japan.

Learn more about the SEMI World Fab Forecast which uses a bottom-up approach methodology, providing high-level summaries and graphs, and in-depth analyses of capital expenditures, capacities, technology and products by fab. Additionally, the database provides forecasts for the next 18 months by quarter. These tools are invaluable for understanding how the semiconductor manufacturing will look in 2014 and 2015, and learning more about capex for construction projects, fab equipping, technology levels, and products.

The SEMI Worldwide Semiconductor Equipment Market Subscription (WWSEMS) data tracks only new equipment for fabs and test and assembly and packaging houses.  The SEMI World Fab Forecast and its related Fab Database reports track any equipment needed to ramp fabs, upgrade technology nodes, and expand or change wafer size, including new equipment, used equipment, or in-house equipment. Learn more about the SEMI fab databases at: www.semi.org/MarketInfo/FabDatabase and www.youtube.com/user/SEMImktstats

Ongoing growth in cellular and Wi-Fi applications will continue to drive GaAs device revenues higher.  The recently released Strategy Analytics Advanced Semiconductor Applications (ASA) Forecast and Outlook report, “GaAs Industry Forecast: 2013- 2018” and the accompanying spreadsheet model forecasts further growth in the GaAs device market in 2014, before competitive technologies and trends act to reduce the growth rates.

The wireless communications segment continues to be the largest user of GaAs devices. Strong demand in this segment helped propel GaAs device revenues up by 11 percent in 2013. GaAs MMIC devices, supplied by device OEMs like Skyworks, RFMD/TriQuint, Avago, ADI/Hittite, M/A-COM Technology Solutions, ANADIGICS, etc. make up nearly 98 percent of all GaAs device revenues. Competitive technologies like silicon and GaN will continue to capture market share from GaAs. This will put the brakes on the growth rate of GaAs device revenue and contribute to an expected decline by 2018.

Strategy Analytics ASA GaAs Forecast

“The GaAs device market has proven incredibly resilient in the face of threats, and manufacturers have been rewarded with nearly 10 years of uninterrupted revenue growth,” Eric Higham, Service Director, Advanced Semiconductor Applications commented. “However, increasing market share for CMOS PAs, GaN and multi-mode and multi-band GaAs PAs will signal a new challenge to revenue growth in the future.”

“The call to action has gone out to all the participants in the GaAs supply chain to provide innovation that will enable GaAs devices to fend off these challenges and continue the trend of revenue growth,” Asif Anwar, Director in the Strategic Technologies Practice added.

Extensive market models detailing the more than 30 market segments that utilize GaAs devices back the forecast.  The ASA service specifically focuses on the different semiconductor technologies like GaAs, GaN, InP, SiC and silicon that compete for end applications in the RF, optical and power electronics segments, resulting in the most robust market data in the industry.

Intel Corporation today announced two new technologies for Intel Custom Foundry customers that need cost-effective advanced packaging and test technologies.

Embedded Multi-die Interconnect Bridge (EMIB), available to 14nm foundry customers, is a breakthrough that enables a lower cost and simpler 2.5D packaging approach for very high density interconnects between heterogeneous dies on a single package. Instead of an expensive silicon interposer with TSV (through silicon via), a small silicon bridge chip is embedded in the package, enabling very high density die-to-die connections only where needed. Standard flip-chip assembly is used for robust power delivery and to connect high-speed signals directly from chip to the package substrate. EMIB eliminates the need for TSVs and specialized interposer silicon that add complexity and cost.

“The EMIB technology enables new on-package functionality that may have been too costly to pursue with previous solutions,” said Babak Sabi, Intel vice president and director, Assembly and Test Technology Development.

Intel also announced the availability of its revolutionary High Density Modular Test (HDMT) platform. HDMT, a combination of hardware and software modules, is Intel’s test technology platform that targets a range of products in diverse markets including server, client, system on chip, and Internet of Things. Until now, this capability was only available internally for Intel products. Today’s announcement makes HDMT available to customers of Intel Custom Foundry.

“We developed the HDMT platform to enable rapid test development and unit-level process control. This proven capability significantly reduces costs compared to traditional test platforms. HDMT reduces time to market and improves productivity as it uses a common platform from low-volume product debug up to high-volume production,” said Sabi.

EMIB is available to foundry customers for product sampling in 2015 and HDMT is available immediately.

Fairchild Semiconductor, a supplier of high performance power and mobile products, today announced it will eliminate its internal five-inch and significantly reduce six-inch wafer fabrication lines, resulting in the closure of its manufacturing and assembly facilities in West Jordan, Utah and Penang, Malaysia, as well as the remaining five-inch wafer fabrication lines in Bucheon, South Korea.

Following the moves, Fairchild will operate production lines using eight-inch wafers in Maine and Pennsylvania, and retain one six-inch factory in Bucheon.

“Fairchild will also continue operating assembly and test facilities in Cebu, Philippines and Suzhou, China,” said Mark Thompson, Fairchild’s chairman and CEO.

In its official release, Fairchild said these cuts are a part of Fairchild’s ongoing initiative to enhance manufacturing capabilities, improve product quality, and lower costs resulting in greater supply chain flexibility and responsiveness for our customers.

Closures of both facilities and Fairchild’s remaining five-inch wafer fabrication lines in Bucheon, South Korea, are planned to occur from Q2 to Q4 2015.

“An adaptive supply chain must be the foundation of any global manufacturer’s operations in the increasingly dynamic semiconductor solutions market,” said Mr. Thompson. “The realignment we are announcing today will maximize the utilization of eight-inch factories and reduce the complexity of our manufacturing footprint, while creating the flexibility to support ongoing customer demand through a greater use of external manufacturing sources. Fairchild will continue operating eight-inch wafer fabrication lines in South Portland, Maine and Mountain Top, Pennsylvania, as well as the Bucheon six- and eight-inch fabrication lines.”

Through the combined actions, Fairchild expects to incur approximately $36 million in cash restructuring and other costs. The company also plans to record during the closure process non-cash charges of approximately $25 million for accelerated depreciation. Once completed, the company expects to realize annual savings of approximately $45 to $55 million from a second quarter of 2014 financial baseline. Of these estimated savings, approximately 75 percent are expected to be cash savings, with the balance attributable to lower depreciation costs.

The semiconductor industry in India is estimated to grow from $10.02 billion in 2013 to $52.58 billion in 2020 at CAGR of 26.72%, according to Research and Markets new report the “Semiconductor Market in India 2014 – 2020.”

India has a very large industry base of electronics items, but there is little manufacturing base for semiconductors. As of now India doesn’t have any operational wafer fabrication plants and depends extensively on the imports. Currently, the semiconductor industry is 100% import based with India importing semiconductors worth $10 billion in 2013. Since In 2013, India spent $169 billion on oil imports, $54 billion on gold imports and $31.5 billion on electronic imports.

Semiconductors are used extensively in various applications, which offer immense potential for the growth of this industry in India. Semiconductors are used majorly in Mobile Devices, Telecommunications, Information Technology & Office Automation (IT & OA), Industrial, Automotive and other industries (Aerospace, Defense and Medical industries).

Mobile devices are expected to grow at CAGR of 33.4% from 2013 to 2020, according to this research report,. The contribution to semiconductor revenue is expected to grow from 35.4% in 2013 to 50.7% in 2020.

Telecommunication segment is expected to grow at CAGR of 26.8% from 2013 to 2020 and its contribution to total revenue will remain the same at 19.7% in 2020.

IT&OA contribution to the total semiconductor revenue will come down from 28.3% in 2013 to 17.4% in 2020 due to consolidation in this sector. This segment will grow at CAGR of 18.2% over the next seven years.

The consumer electronics segment is expected to grow at CAGR of 18.8% and the contribution to the total semiconductor revenue will come down from the current level of 5.6% in 2013 to 3.5% in 2020. Industrial electronics segment is expected to grow at CAGR of 19.6% and the contribution to the total semiconductor revenue will come down from current level of 4% to 2.7%.

Automotive electronics segment is expected to grow faster at CAGR of 30.5% from 2013 to 2020; its revenue contribution will increase from 3.2% in 2013 to 3.9% in 2020.

This study looks at the current state of the semiconductor industry in terms of products and service offerings and their growth over the last few years. The growth drivers and inhibitors of the industry are also examined in detail. The value chain of the industry in India has also been identified and mapped out. Based on all these factors, the report makes projections for the market size in 2020 in terms of products, services, application domains and overall market potential.

In addition to this, the report contains profiles of and inputs from several key companies operational in this sector. 24 companies have been extensively profiled in this report, to cover the entirety of the value chain.

Read more: Global semiconductor industry on pace for record sales through first half of 2014

Liquid-crystal-display television (LCD TV) panels enjoyed unexpected growth in the first half of this year, tied to enthusiastic TV viewing because of the World Cup and other factors that benefited the market, according to a new report from IHS Technology.

Global LCD TV panel shipments during the first six months of 2014 rose 3 percent from the same period a year ago, as shown in the attached figure. Although growth this year was much less than the 9 percent expansion logged during the first six months of 2013, achieving any increase at all was unforeseen.

2014-08-06_LCD-TV_Panels

“What a surprising result this was, as the television industry doubted that shipments could increase during this time,” said Ricky Park, director for large displays at IHS. “It was unclear whether any growth would occur because of signs earlier in the year that appeared to be discouraging. However, the market has righted itself, to everyone’s delight.”

Among the variables fueling the market, perhaps none were more dazzling than the month-long, glittery affair known as the World Cup. Starting in June, the world’s premiere soccer event drove up demand for televisions, especially in Europe and South America.

Sports extravaganzas long have been reliable drivers of television sales—and by extension, the LCD TV panels that make up the sets. And for events of global interest like the World Cup or the Olympics, staged once every four years, keen anticipation usually helps propel the market upward.

Still, the athletics spectacle alone was no guarantee of growth. But other factors also kicked in, helping create an overall favorable environment for the global LCD TV trade in the first half. These included signs of a continuing economic recovery in North America, one of the world’s two largest markets for LCD TVs alongside China; a subsidy program initiated by the Mexican government for its citizens to buy new LCD TVs; and the continued phasing out of bulky, tube-type analog televisions, now obsolete in many areas of the world.

These findings are available in the report entitled, “LCD Supply and Demand Market Tracker – Q2 2014,” from the Displays service of IHS Technology.

But strong demand is blunted by production problems

Despite the stronger-than-expected demand for the January to June period, a drop in yields and a loss in capacity due to production line modifications caused a shortage of supply of LCD TVs. The effects were felt especially in the ultra-high-definition television (UHD TV) segment of the industry.

Issues related to quality have cropped up, for instance, in the production of so-called PenTile RGBW UHD panels, which are aimed at the 40-inch segment of the UHD space. A Samsung-patented technology, PenTile panels add a subpixel with no color filtering material that allows the backlight through, resulting in white (W) being added to the traditional red, green and blue (RGB) subpixels. The technology makes brighter images possible with the same amount of power used for RGB.

The production headache is becoming a problem, Park added, because the price of PenTile RGBW UHD TVs was supposed to be coming down in order to better compete with non-UHD sets. With four times the resolution of 1080p sets, UHD TVs are also priced far higher than conventional high-definition television models.

Also facing trouble was the production method known as multi-model on a glass (MMG). Low production efficiencies resulted in reduced capacity for MMG, especially in the advanced production lines for eighth-generation fabs.

On top of those problems, a growing share of the manufacturing base that once had enjoyed maximized glass efficiency—lines producing TV panels in sizes of 39.5, 42.5, 48 and 48.5 inches—experienced deteriorating yields.

Production issues of a different nature are likely to occur in the second half, IHS believes, extending current manufacturing woes. A substantial loss in production capacity is expected during the remainder of the year because panel makers in China and Taiwan are slated to use different electrode materials from those currently deployed, ostensibly to improve their UHD products. The makers affected include AU Optronics, Innolux and BOE Optoelectronics.

Change is also afoot at Korean suppliers Samsung Display and LG Display.

Samsung Display will reduce the thickness of its front-pane glass to 0.5 millimeters as the company increases the production of curved TVs. LG Display, meanwhile, reportedly is converting part of an eighth-generation line to oxide thin-film transistor technology in order to produce organic light-emitting-diode (OLED) panels, a rival technology to UHD LCDs that the maker hopes will start picking up among consumers.

All the same, TV prices are not expected to dip in the months to come in spite of the ongoing production problems, which will serve to constrict the supply of LCD TVs.

Semiconductors providing wireless connectivity in health and fitness devices are set for solid double-digit growth in 2014 and beyond, especially as a clutch of wireless technologies make their way into a growing number of wearable devices, according to a new report from IHS Technology.

Shipments this year for wireless semiconductors in health and fitness will reach a projected 61.2 million units, up 11 percent from 55.0 million in 2013. The expected strong expansion for this year continues the robust growth of 2012 and 2013. And the market shows little signs of slowing, with shipments in 2018 climbing to 95.78 million units, as shown in the attached figure.

Wireless_Semiconductor_Shipments_JPEG

The overall health and fitness market covered by the forecast includes the sports and fitness segment on the one hand, as well as the adjacent market for health and wellness on the other. While overlaps exist between the two segments, there are also subtle differences.

For instance, data and activity sharing by wireless means is more common in sports and fitness as consumers happily disclose the results of their improving fitness levels. In contrast, sharing is not as widespread in health and wellness, where disease management is largely private and carefully guarded by the affected individuals.

Bluetooth Smart is leader of the pack

Yet the fitness market as a whole is particularly receptive to wireless connectivity.

“Because most health and fitness devices are mobile, wireless connectivity is important,” said Lee Ratliff, principal analyst for connectivity at IHS. “And because these wireless mobile devices are in most cases also wearable and thus require a small form-factor, they cannot be power hogs and must support low-energy consumption to have the best chance of succeeding in the consumer market.”

Wireless connectivity mainly serves two purposes, Ratliff noted. Especially in sports and fitness applications, wireless connectivity is often used to provide a link to remote sensors when wired connectivity is too cumbersome. Examples here include linking heart-rate chest straps to wrist-worn heart-rate monitors, or linking wheel-speed sensors to cycling computers.

A second use is for data uploading, with wireless connectivity employed to upload fitness and performance data to PCs, smartphones, tablets or online communities for analysis and sharing.

Among the various wireless technologies now available on the market for health and fitness, Bluetooth Smart is the most successful. As a low-power technology, Bluetooth Smart enables even the smallest wearable products—such as foot pods, the size of one’s thumbnail—to operate for years on a battery the size of a coin cell. Bluetooth Smart also leverages its enviable position in mobile phones and tablets: It is the only major low-power wireless technology able to communicate with all the chief mobile platforms, including Apple iOs, Google Android, Microsoft Windows 8 and the BlackBerry operating system.

Moreover, the dongle-free connectivity of Bluetooth Smart gives it an edge over other rivals. No other technology features both low-power consumption as well as seamless connectivity, Ratliff said.

One wireless technology specifically designed for the health and fitness market and popular with heart-rate monitors, ANT/ANT+, is a low-power technology that, however, does not enjoy the same broad support in mobile platforms. A PC or dongle is also required for ANT/ANT+, unlike Bluetooth Smart. Still, ANT/ANT+ enjoys a significant market share and seems to have a defensible position, especially in products designed for serious fitness enthusiasts and in cycling electronics.

Keen consumers help spur market

A big driver of growth in health and fitness devices is the desire among consumers to track and analyze personal data, in pursuit of what is known in industry circles as “the quantified self.” Consumers can then share such data via social media and online communities, often via apps like RunKeeper of Runtastic.

Other drivers for the market include the increased use of wearable devices; decreasing component costs; an aging demographic concerned about preserving health; and the rising use of telehealth, or remote healthcare systems.

Shipments of consumer health and fitness devices with integrated wireless connectivity will grow to an estimated 75.7 million units in 2018, up from 23.0 million units in 2011.

These findings are available in the report, “Low-Power Wireless Market Tracker – Q2 2014,” from the Information Technology service of IHS.