Edge AI, security & RISC-V to redefine IoT chips by 2026
The IoT semiconductor market is entering a pivotal phase, with edge AI, open chip architectures, and enhanced security set to shape the industry in 2026. Analysts point to a transformation away from data centre innovation, with next-generation chips designed for IoT devices expected to dominate growth.
Edge AI mainstream
Edge AI, once a specialised feature, is expected to become a standard part of sensors, modules, and gateways. Neural Processing Units (NPUs) are being incorporated into mainstream designs, enabling local data processing rather than relying on cloud-based inference. This shift offers benefits for latency, privacy, and network bandwidth, enhancing a broad range of IoT deployments.
"By 2026, IoT semiconductors will hit a clear turning point as edge AI shifts from a niche feature to the default in many sensors, modules, and gateways. Chiplet based and RISC-V based designs, supported by AI-enabled design tools, will give OEMs more flexibility to refresh device portfolios and reduce lock-in. At the same time, carbon-aware design choices, more local production, and security-by-design with hardware roots of trust and formal certification will increasingly determine which suppliers make it onto shortlists. The result is an IoT chip landscape where AI capability, sustainability, supply resilience, and built-in security matter as much as raw performance and price," said Satyajit Sinha, Principal Analyst, IoT Analytics.
Architectural shifts
RISC-V, an open-standard instruction set, is gaining ground in IoT chips, challenging the dominance of incumbent architectures. Chiplet-based approaches are allowing hardware manufacturers to create modular solutions, improving supply chain flexibility and allowing bespoke device configurations. AI-powered design tools are supporting this trend by accelerating development cycles and reducing time-to-market for new products.
Supply chain dynamics
Concerns over geopolitical risks and supply disruptions are prompting manufacturers to localise IoT chip production. Countries and companies are investing in domestic foundries to decrease reliance on foreign semiconductors. This approach is expected to help mitigate future risks in a sector where resilience has become a high priority following several years of global supply chain volatility.
Sustainability focus
Sustainability is becoming integral to chip design. Manufacturers are considering carbon emissions at every stage, from material selection to distribution. This carbon-aware approach is moving from compliance-driven requirements to core business strategy, driven by customer demand and an evolving regulatory landscape.
Security requirements
Security-by-design is increasingly non-negotiable, with hardware roots of trust and external certification soon to be baseline expectations for market entry. Regulatory bodies in several jurisdictions are mandating built-in protections at the silicon level. These requirements are intended to protect data and infrastructure as the number of connected devices grows rapidly. Security concerns are prompting a move towards devices that incorporate hardware-based defences from the outset, rather than relying solely on post-deployment software updates.
"By 2026, IoT semiconductors will hit a clear turning point as edge AI shifts from a niche feature to the default in many sensors, modules, and gateways. Chiplet based and RISC-V based designs, supported by AI-enabled design tools, will give OEMs more flexibility to refresh device portfolios and reduce lock-in. At the same time, carbon-aware design choices, more local production, and security-by-design with hardware roots of trust and formal certification will increasingly determine which suppliers make it onto shortlists. The result is an IoT chip landscape where AI capability, sustainability, supply resilience, and built-in security matter as much as raw performance and price," said Sinha.
