The Chinese wifi IoT market will grow at a CAGR of 29% from 252 million connections in 2021 to 916.6 million in 2026, according to market research firm ABI Research.

The Covid-19 pandemic highlighted the prospects of remote working to the world, and the importance of having a reliable office and home network. IoT is relied heavily by enterprises, such as the manufacturing segment, for various applications such as remote monitoring and management of work processes, predictive maintenance, and asset tracking.

Wifi serves as an enabler in connecting these IoT devices and sensors, supporting broadband and narrowband IoT applications.

Remote working has also driven consumer demand for cohesive home environments, which stimulates the growth of smart home applications, enabled by IoT devices connected over wifi connectivity.

The increasing demand for wifi-enabled applications and the advent of standards such as Wifi 6, 6E and 7 has created the need for software and hardware components such as wifi chipsets and devices that can support the latest standards.

“To meet the surging wifi demand, the Chinese market has been ramping up manufacturing capabilities through support plans provided by the government and the emergence of new vendors to ease the strain felt from the global chip shortage,” said Andrew Zignani, research director at ABI Research.

China’s continued rapidly growing economy and aspiring demographics is making a key contribution to global demand and consumption of wifi-enabled services such as smart home applications.

To meet the growing demand for wifi components and devices, the Chinese government has launched several initiatives, including Made in China (MIC) 2025, which provides financial subsidies, loans and technical guidance to local manufacturing vendors.

“New and existing vendors are also venturing into the wifi supply chain,” said Zignani. “One example is TP-Link, a Chinese manufacturer of networking products like routers and modems. TP-Link recently revealed to have established a team for the research and development of Wifi 6 chipsets, specifically targeting the smart-home vertical.”

In support of the wifi IoT market, Chinese software company Tuya has also developed and released its first Wifi 6 module for IoT end devices, the AXBU module.

ABI forecasts that the global wifi IoT market will grow from approximately 2.3 billion connections in 2021 to 6.7 billion connections by 2026. This could be compared against the Chinese forecasts, where the Chinese wifi IoT market is expected to reach 916.6 million in 2026. With a population strength of around 1.4 billion, China alone makes up approximately 40% of the global wifi IoT market. This indicates the strong prospects for the Chinese wifi ecosystem, where wifi-enabled applications and services would be driven by the proliferation of IoT.

“The wifi connectivity ecosystem in China is seeing a number of applications being developed across multiple verticals, such as in the manufacturing, education, transport and healthcare sector,” said Zignani. “Wifi can complement 5G and 4G by supporting shorter-range connectivity for indoor settings. Growth and momentum in the Chinese wifi connectivity ecosystem is expected to accelerate over the next five to ten years.”