Cheap memory has fueled the development of a wave of connected devices belonging to the "internet of things," a wave seen boosting demand for semiconductors and possibly shaking chipmakers and related businesses free from the market's vicious cycle of contraction after excessive investment.

Semiconductor prices have declined as Japanese and South Korean chipmakers face a glut amid falling demand for personal computers. These cheap chips have driven a development storm of web-connected technology for automobiles and home appliances, being unveiled left and right at events the world over.

One of those devices is a smart fridge shown by Sharp at last year's Ceatec Japan tech exposition in Chiba Prefecture, near Tokyo. The appliance responds to voice commands and advises users when it's time to buy new groceries. Yet this futuristic refrigerator had a market price of just around 300,000 yen ($2,674) at Tokyo electronics retailers, in line with new plain models with the same storage capacity.

A material analyzer displayed by the Japanese unit of U.S.company Analog Devices is another such offering. When held up to a piece of food, the analyzer displays on an accompanying smartphone app data such as the food's protein or fat content. The device costs only $250 to $300 per unit. The company says access to cheap components let it make the product a reality.

Crucial memory storage technology hit recent low prices last spring, when benchmark dynamic random access memory and NAND flash products sold in the $1.60 and $2.20 ranges, respectively. Growing demand such as from Chinese appliance makers has paused the price decline, but prices have fallen by more than half in three years. Prices also are sliding 10-20% per year among commodity-grade sensors for uses such as image sensing.

Nomura Research Institute estimates the Japanese market for such connected devices will grow to 1.94 trillion yen in 2020 and 3.2 trillion yen by 2022, up from only 520 billion yen in 2015. The growth trend also seems likely to continue worldwide. Toshiba, a major memory maker spending heavily on developing next-generation products, expects "explosive growth of storage capacity," said Yasuo Naruke, an executive vice president.

Some think that as demand expands, the semiconductor market will turn to full-scale growth. One Japanese maker of silicon wafers -- the building blocks for semiconductors -- instituted its first real price hike in 11 years amid a rise in demand. Producers "need to make reliable products" with high value added, said Masahiko Todoroki, a managing director of Shin-Etsu Chemical, which makes silicon wafers.

The surging internet of things market could affect a variety of fields, as demand rises for technologically capable personnel and secondhand manufacturing equipment.

By: DocMemory
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