Chip companies all charged up over smart meters
The soaring cost of energy, the aging of the electricity grid, national security concerns, and government regulation are creating a boom in smart utility meters and the semiconductors that go into them.
By Tam Harbert, Contributing Editor -- Electronic Business, 6/24/2008
The soaring cost of energy, the aging of the electricity grid, national security concerns, and government regulation are creating a boom in smart utility meters and the semiconductors that go into them.
Some 50 million old meters in the United States are likely to be replaced by advanced meters by 2010 at a cost of about $18 billion, according to a recent analysis by Deutsche Bank. Worldwide, only 6% of electricity, 8% of gas, and 4% of water meters are even automated, according to Texas Instruments Inc, which sells a variety of chips for meters. In fact, in the electric industry alone, 500 million meters worldwide could be replaced over the next 10 years, resulting in semiconductor sales of at least $7.5 billion, according to Mark Buccini, director of strategic marketing for Texas Instruments’ microcontroller products.
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Indeed, Itron’s Spaur said that, as big projects like SmartConnect ramp up, shipments of smart meters will soar. “Looking at the requests for proposals and what the regulators are signing off on in terms of rate adjustments to cover these investments, we’re looking at a market in five years of at least 60 million of these smart meters in the United States,” he said. “And a large number of those will be connected to a home area network, and that home network will have at least one device that can talk to the meter.”
That has chip companies salivating. Remember that $7.5-billion market number from Texas Instruments? That’s just for electricity meters. Buccini said that there will be additional sales in networking equipment and automated devices like thermostats within the home.
“The base function – the electricity meter part – is probably the smaller part of the market,” he said. “The communications piece is as much as three times as big.”
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