Inventor Babak Taheri compares the opportunities of the Internet of Things — or Internet of Tomorrow, as he likes to call it — to the Industrial Revolution.

As head of Freescale Semiconductor's (NYSE:FSL) sensor solutions unit, he leads researchers exploring ways to use sensors in automotive, medical, consumer and industrial applications. His team looks at how sensors work, or might fail.

"Think of a (self-driving) car with radar — high-frequency sensors — that sees motion 50 meters away," Taheri told IBD.

Short- and long-range sensors, combined with cameras, must determine, for example, whether the motion is a human or a deer, and how fast it's approaching the vehicle, while factoring in tire pressure, road and environmental conditions and other considerations so the brakes can be applied properly to avoid a collision, he explains.

Taheri sees the IoT as a priority market, and for good reason.

"IoT spending in 2015 will exceed $1.7 trillion, a 14% jump from 2014, driven by nearly 15 billion Internet-connected, autonomously communicating devices," Frank Gens, an analyst with market tracker IDC, told IBD. "By 2020, this will rise to $3 trillion and nearly 30 billion devices."

Semiconductor companies build microelectromechanical systems (MEMS) onto chips to create "intelligent" sensors that can measure everything from motion and voices to temperature and heart rhythms. The sensors and "sensor hubs" (which process data from sensors) are key to the IoT, wearables, auto technology and more.

A KPMG survey found that 61% of 155 chip company executives expect sensors to be the No. 1 growth opportunity in 2015. But competition to tap sensor opportunities has never been more intense, says Packy Kelly, who heads KPMG's global semiconductor practice.

"The bar is raised constantly for new product introductions," Kelly told IBD. "The time-to-market for each new design is consistently compressed."

Shipments of sensors used in wearables alone are expected to soar to 466 million units by 2019 from 85 million units in 2014, research firm IHS Technology says. The average wearable device will incorporate 4.1 sensor elements by then, up from 1.4 in 2013, says IHS.

"Microelectromechanical systems and sensors are the frontline devices that collect raw data from the environment and temperature, or health data such as heart rhythms and the number of steps taken," said Stephen Whalley, chief strategy officer for the MEMS Industry Group, a Pittsburgh-based trade association.

To better compete, chip companies are carving out niches and entering into partnerships.

http://news.investors.com/technology/020215-737452-semiconductor-firms-face-off-to-bring-sensors-to-emerging-markets.htm